GUJARAT STATE JUDICIAL ACADEMY

e-Digest
Important Judgments on
Motor Accident Claim Petition
delivered by
Hon'ble Supreme Court of India &
Hon'ble High Court of Gujarat
in recent past
(Updated till April 2022)

Patron-in-Chief President
Hon'ble Mr. Justice Aravind Kumar Hon'ble Mr. Justice J. B. Pardiwala
The Chief Justice, High Court of Gujarat Judge, High Court of Gujarat

Director
Mr. J. C. Doshi

Assistant Directors

Mrs. N. A. Choksi Mr. S. P. Mehta Mr. A. P. Randhir

website : https://gsja.nic.in
 DISCLAIMER

The contents of this publication are solely meant for

educational purpose. It does not constitute professional

advice or formal documentation. Though utmost care has

been taken by team academy while preparing “e-digest”

on “Important Judgments on Motor Accident Claim

Petition delivered by Hon'ble Supreme Court of India

& Hon'ble High Court of Gujarat in recent past”,

chances of error omission or mistake in it are not ruled out.

It is requested to bring to the notice of academy any such

mistake or error for appropriate corrigendum. As stated

above the material is provided only for academic purpose

and same has to be used by the Judicial officer with

wisdom as guide and GSJA owes no liability or

responsibility for inappropriate interpretation of digest

being made by judges. No part of this publication should

be distributed or copied for commercial use without

express written permission from GSJA.

Team Academy
 Important Judgments on Motor Accident Claim Petition delivered by
Hon’ble Supreme Court of India & Hon’ble High Court of Gujarat
in recent past

Sr.
Case Detail Citation
No.
1 National Insurance Company Limited Versus 2017 (0) AIJEL-SC
Pranay Sethi 61069

Guideline issued regarding principle of

standardization determination of future prospects,
selection of multiplier, Just compensation in case of
Motor accident cases.
2 Sarla Verma Versus Delhi Transport Corporation 2009 (0) AIJEL-SC
43621
Direction issued regarding selection of multiplier,
mode of calculation of dependency loss, addition to
income for future prospects, proper multiplier method
& deduction towards personal and living expenses
while determining Computation of compensation.
3 M. R. Krishna Murthi Versus New India Assurance 2019 (0) AIJEL-SC
Co. Ltd. 63757

Guideline in regards how to calculate income of non

earning victim of the road accident (student) when he
sustained permanent disability.
4 Pappu Deo Yadav Versus Naresh Kumar. 2020 (0) AIJEL-SC
66525
In case of injury arise out of road accident, the
Supreme court decides how to grant just
compensation and also discuss the issue of grant of
future prospects.
5 New India Assurance Company Limited Versus 2020 (0) AIJEL-SC
Somwati : Sangita : Azmati Khatoon : Umarani : 66509
Pinki : Nanak Chand : Rinku Devi

In this judgment Supreme court explained expression

“Consortium” and reiterate earlier judgment but
denied to grant compensation separately under the
head Loss of love and affection.
6 Lalan D. @ Lal Versus Oriental Insurance Company 2020 (0) AIJEL-SC
Ltd. 66528
 Hon’ble Supreme Court explained how to assess
compensation in a case where victim is almost in
vegetative state post road accident.
7 National Insurance Company Limited Versus 2020 (0) AIJEL-SC
Birender And Ors. 65611

Hon’ble Supreme Court explained term “Legal

representative” and that major married son or
daughter are entitled to have compensation
irrespective of facts that whether they were fully
dependent on the decease or not. Further it is held
that to get pension is own right of widow and it would
not dis-entitle her from getting the compensation.
8 Kajal Versus Jagdish Chand 2020 (0) AIJEL-SC
65725
Hon’ble Supreme Court explained how to calculate
compensation in a case of minor when he or she
suffered great extent of injury and how to calculate
loss of future prospects.
9 Kirti Versus Oriental Insurance Company Ltd. 2021 (2) SCC 166

Hon’ble Supreme Court crystallised that the situation

prevailing at the time of filing the claim petition has
to be considered. It should not be affected by
subsequent events. Hon’ble Supreme Court lay upon
to count minimum wage in absence of any income
proof and also shows how to determine notional
income of the home maker.
10 Erudhaya Priya Versus State Express Transport 2020 (0) AIJEL-SC
Corporation Ltd. 66419

Hon’ble Supreme Court assess the loss of earning

capacity and relying upon earlier judgment held that
the multiplier method is sound and logical. Hon’ble
Supreme Court also grant loss for future prospects in
the case of permanent disablement arise out of
accidental injury.
11 Ramkhiladi Versus United India Insurance 2020 (0) AIJEL-SC
Company 65585

Issue regarding principle of no fault liability & In a

claim u/s. 163A, there is no need for claimants to
plead or establish negligence and/or that death in
respect of which claim petition is sought to be
 established was due to wrongful act, neglect or
default of the owner of vehicle concerned.
12 Jabbar Versus Maharshtra State Road Transport 2019 (0) AIJEL-SC
Corporation 65433

Issue regarding quantum decided in case of

amputation of victim’s right hand.
13 Magma General Insurance Company Limited 2018 (0) AIJEL-SC
Versus Nanu Ram Alias Chuhru Ram 62739

Issue regarding different kind of Loss of Consortium:

filial consortium, parental consortium and spousal
consortium.
14 Chandra @ Chanda @ Chandraram Versus Mukesh 2021 (0) AIJEL-SC
Kumar Yadav 67798

Issue regarding fixing of income while granting

compensation : In absence of salary certificate the
minimum wage notification can be a yardstick but at
the same time cannot be an absolute one to fix the
income of the deceased.
15 National Insurance Company Ltd. Vs. 2021 JX (SC) 592
Chamundeswari & Ors.

Issue regarding whether the FIR and/or Panchnama

will prove vital role in proving contributory negligence
while deciding MACP? Explained by court.
16 Karthik Subramanian Vs. B Sarath Babu & Anr. 2021 (0) AIJEL-SC
67111
Issued regarding quantum of compensation victim
suffered serious injuries in an accident resulting in
40% permanent disability:- held multiplier method
has to be applied for future prospects and
advancement in life and career.
17 A. V. Padma Versus R. Venugopal 2012(3)SCC 378:
2012 (2) Scale 1
Issue regarding disbursement of awarded amount has
been explained by Hon’ble Supreme Court.
18 IFFCO Tokio General Insurance Company Limited AIR 2021 (SC) 2277
Versus pearl Beverages Limited.

Issue regarding Drunken driving - Breath analyzer

test or blood test is not mandatory for an insurer to
 deny an accident policy claim on the ground of
drunken driving.
19 Chandra & Ors. Versus the Branch Manager, The CA No. 5635/2021
Oriental Insurance Company Limited & Anr. arising out of SLP
(C) 31444/2017
Hon’ble Supreme Court explained how to calculate
income of the victim of the road accident where
evidence produced and proved that he was working in
foreign nation and was earning in foreign currency.
20 HDFC Ergo General Insurance Company Limited 2021 (0) AIJEL-SC
versus Mukesh Kumar & Ors. 67851

Issue regarding grant of perpetual or continuance

compensation under the Motor Vehicles Act is not
permissible.
21 Oriental Insurance Company Limited versus 2021 LawSuit(SC)
Kahlon @ Jasmail Singh Kahlon 426

Question involved: Whether right to sue and to

implead is available to LR in case where injured
victim died during the pendency of claim petition filed
under Section 166 of the M.V. Act? Held Motor
accident claim petition does not abate even after the
death of the injured claimant. The right to sue survive
to his heirs and legal representatives in so far as loss
to the estate is concerned
22 Kusumben Vipinchandra Shah and Anr. Versus 2007 (1) GLH 601 :
Arvindbhai Narmadashankar Raval and Ors. AIR 2007 Guj 121

Whether in a case of third party who is a victim of a

road accident, is it necessary to implead both the
vehicle and all the vehicles in a claim petition?
Division bench of Gujarat High Court decided the
issue.
23 Valiben laxmanbhai Thakore (Koli) WD/O late 2021 (0) AIJEL-HC
laxmanbhai Ramsingbhai Thakore (Koli) and 3 243219
other(s) Versus kandla Doch labour Board and 1
others)

Full bench of Gujarat High Court determined that if

the additional premium of the driver is taken by the
insurance company, irrespective of driver’s negligence
insurance company is liable to pay the compensation.
24 Sunita Tokas Versus New India Insurance Co.Ltd. 2019 (0) AIJEL-SC
64619
Hon’ble Supreme Court decides that multiplier
should be taken considering the age of the deceased
and not of the claimant.
25 Sandeep Khanuja Versus Atul Dande 2017 (0) AIJEL-SC
59667
In case of injuries and permanent disablement,
description of nature of injury and permanent
disablement are relevant factors and it has to be seen
as to what would be impact of such injury /
disablement on earning capacity of injured. The free
movement being restricted by the injury /
disablement is relevant to decide application of
multiplier in calculating compensation.
26 United India Insurance Co.Ltd. Versus Satinder 2020 (0) AIJEL-SC
Kaur @ Satwinder Kaur with Satinder Kaur @ 66336
Satwinder Kaur Versus United India Insurance
Co.Ltd.

Hon’ble Supreme Court explained that what criteria

should be taken for assessing compensation in case
of death from road accident. Also explained term
Consortium and further how to calculate
compensation in a case where deceased was working
outside India and was earning in foreign currency.
27 Rahul Sharma Versus National Insurance 2021 (0) AIJEL-SC
Company Ltd. 67338

Even in case of injury and victim being self employed,

Hon’ble Supreme Court stressed upon granting the
loss of future prospects.
28 Kunjan Sadana Versus Mahesh Kumar 2019 (0) AIJEL-SC
65498
Hon’ble Supreme Court held that, age of deceased
which has to be taken into account and not age of
dependents.
29 Joginder Singh Versus Icici Lombard General 2019 (0) AIJEL-SC
Insurance Company 64609

Hon’ble Supreme Court held that, multiplier in case

of bachelor who has died in accident should be
computed on the basis of age of deceased and not the
age of parents.
30 Shivaji Versus Divisional Manager, United India 2018 (0) AIJEL-SC
Insurance Co. Ltd. 62596

Hon’ble Supreme Court held that, in a proceeding

under Section 163A of the Act, the insurer cannot
raise any defence of negligence on the part of the
victim to counter a claim for compensation.
31 United India Insurance Company Limited Versus 2017 (0) AIJEL-SC
Sunil Kumar 61480

Hon’ble Supreme Court held that, it is clear that

grant of compensation under Section 163-A of the Act
on the basis of the structured formula is in the
nature of a final award and the adjudication there
under is required to be made without any
requirement of any proof of negligence of the
driver/owner of the vehicle(s) involved in the accident.
32 Khenyei Versus New India Assurance Company 2015 (0) AIJEL-SC
Limited 56606

Hon’ble Supreme Court states the principle in regards

to liability of joint tort-feasors in case of composite
negligence and right of third party to recover
compensation from any of the joint tort-feasors.
33 Beli Ram Versus Rajinder Kumar & Anr. 2020 (0) AIJEL-SC
66547
Hon’ble Supreme Court held that, it’s the duty of the
owner of the vehicle to check validity of license. If he
fails and it is proved then in such circumstances
insurance company cannot be held liable to absolve
the liability of the owner.
34 Singh Ram Versus Nirmala And Ors. 2018(0) AIJEL-SC
61863
Hon’ble Supreme Court decided grants of pay and
recover in case of fake license.
35 Bajaj Allianz General Insurance Company Private 2021 (2) TAC 353
Ltd. vs. Union of India [WPC 534/2020] 16-3-2021

The Hon’ble Supreme Court issued slew of the

directions to be followed by MACT, Police Department
and Insurance Company – Pan India, with respect to
the claim petition filed under Motor Vehicle Act.
36 Bajaj Allianz General Insurance Company Private Writ Petition (Civil)
Ltd. vs. Union of India [WPC 534/2020] 16-11- No. 534 of 2020
2021

The Hon’ble Supreme Court has issued further slew

of the directions in continuation of the above
directions, with inclusion how to receive and disburse
award amount. The NEFT and RTGS method for
receive and disbursement of the award amount stated
in Kannur’s judgment of Hon’ble Madras High Court
has been approved by the Hon’ble Supreme Court.
37 Oriental Insurance Company Limited, Kannur 2017 ACJ 253
Versus Rajesh

In this case, the Hon’ble Madras High Court set out

various guidelines for receive and disbursement of
award amount through e-payment mode. The Hon’ble
Supreme Court in case of Bajaj Allianz has approved
this guideline.
38 New India Assurance Co. Ltd. v. Urmila Shukla Laws(SC)-2021-8-
72
The Hon’ble Supreme Court held that, the judgment
in Pranay Sethi does not limit the operation of a
statutory provision granting greater benefits in the
matter of Motor Accident Compensation. If a statutory
instrument has devised a formula which affords
better or greater benefit, such statutory instrument
must be allowed to operate unless the statutory
instrument is otherwise found to be invalid.
39 National Insurance Company Ltd. Versus Laws(SC)-2021-10-
Chamundeswari & Ors. 1

The Hon’ble Supreme Court held that while deciding

the issue of negligence in a claim for motor accident,
if any evidence before the Tribunal runs contrary to
the contents in the First Information Report, the
evidence which is recorded before the Tribunal has to
be given weightage over the contents of the First
Information Report.
40 K. Anusha Vs Regional Manager, Shriram General Special Leave to
Insurance Co. Ltd. Appeal (C) No(s).
14360/2016
The Hon’ble Supreme Court in regard to issue of
contributory negligence held that mere failure to
 avoid the collision by taking some extraordinary
precaution, does not in itself constitute contributory
negligence.
41 N. Jayasree Versus Cholamandalam Ms General AIR 2021 SC 5218
Insurance Company Ltd.

The Hon’ble Supreme Court held that mother-in-law

is living with son-in-law or daughter she is dependant
and would be entitled to claim compensation under
Section 166 of the Motor Vehicle Act, 1988. The
Hon’ble Supreme Court has given wider interpretation
of the term of legal representative and said that it
should not be confined only to mean the spouse,
parents and the children.
42 Jithendran Vs. The New India Assurance Co. Ltd. AIR 2021 SC 5382
and Ors.

The Hon’ble Supreme Court has held that if due to

accidental injury, the claimant is incapacitated for
life, the loss of earning capacity must be fixed at
100% regardless of physical disability. The Hon’ble
Supreme Court has also insisted upon grant of loss of
future prospects in such cases.
43 Kurvan Ansari alias Kurvan Ali & Anr. v. Shyam JT 2021 (11) SC
Kishore Murmu & Anr 323

The Hon’ble Supreme Court observed that in spite of

repeated directions issued by the Hon’ble Supreme
Court scheduled – II of the M.V. Act, 1988 not has
been amended by the Government, therefore, fixing
notional income of Rs.15000/- per annum for non-
earning member is not just and reasonable.
44 Meena Pawaia and Ors. Vs. Ashraf Ali and Ors. 2021 SCC OnLine
SC 1083
The Hon’ble Supreme Court held that in case of death
arise out of road accident even if the deceased has no
income at the time of death, his/their legal heirs shall
also be entitled to future prospects by adding future
rise in the income. The Hon’ble Supreme Court
further held that it cannot be accepted that the
person not earning shall remain static and stagnant
through out of the life.
45 Basant Devi v. Divisional Manager, The New India AIR Online 2021
Assurance Company Ltd. SC1222
 The Hon’ble Supreme Court held that, even if there is
no evidence on record of actual income, the deceased
person's potential to earn can be considered while
considering insurance claims in motor accidents
matter.
46 Rasmita Biswal Versus Divisional Manager, JT 2021 SCC
National Insurance Company Ltd. online SC 1193

The Hon’ble Supreme Court held that since the

Constitution Bench has pronounced judgment in case
of Pranay Shethi in year 2017, therefore, now the
claimant are entitled to 10% enhancement on
conventional head of granting compensation.
47 The Oriental Insurance Co. Ltd. Versus Chief R/Special Civil
Commissioner Of Income Tax (TDS) 05/04/2022 Application No.
4800 of 2021
The interest awarded by the Motor Accident Claim
Tribunal u/s 171 of the Motor Vehicles Act 1988 is
not taxable under the Income Tax Act, 1961.
 1

2017 (0) AIJEL-SC 61069

SUPREME COURT OF INDIA

Hon'ble Judges:Dipak Misra, A.K.Sikri, A.M.Khanwilkar, D.Y.Chandrachud and Ashok Bhushan JJ.

National Insurance Company Limited Versus Pranay Sethi

SPECIAL LEAVE PETITION (CIVIL) No. 25590 of 2014 ; *J.Date :- OCTOBER 31, 2017

MOTOR VEHICLES ACT, 1988 Section - 163A , 166 , 168

Motor Vehicles Act, 1988 - S. 163A, 166, 168 - precedent - per incuriam rule - judicial discipline
demanded by a precedent or the disquali cation or diminution of a decision on the application of the
per incuriam rule is of great importance, since without it, certainty of law, consistency of rulings and
comity of courts would become a costly casualty - a decision or judgment can be per incuriam any
provision in a statute, rule or regulation, which was not brought to the notice of the court - a decision
or judgment can also be per incuriam if it is not possible to reconcile its ratio with that of a
previously pronounced judgment of a coequal or larger Bench - there can be no scintilla of doubt
that an earlier decision of co-equal Bench binds the Bench of same strength - as Rajesh's case has
not taken note of the decision in Reshma Kumari, which was delivered at earlier point of time, the
decision in Rajesh is not a binding precedent.

Motor Vehicles Act, 1988 - S. 163A, 166 - compensation - determination of future prospects -
selection of multiplier - insofar as multiplicand/multiplier is concerned, it has to be accepted on the
basis of income established by legal representatives of deceased - future prospects are to be added
to sum on the percentage basis and "income" means actual income less than tax paid - multiplier has
already been xed in Sarla Verma which has been approved in Reshma Kumari - for determination of
the multiplicand, deduction for personal and living expenses, tribunals and courts shall be guided by
paragraphs 30 to 32 of Sarla Verma (vi) selection of multiplier shall be as indicated in the Table in
Sarla Verma read with paragraph 42 of that judgment - (vii) age of the deceased should be the basis
for applying the multiplier.

Motor Vehicles Act, 1988 - S. 163A, 166, 168 - compensation for the loss of estate, loss of
consortium and funeral expenses - reasonable gures on conventional heads, namely, loss of estate,
loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/-
respectively - principle of revisiting the said heads is an acceptable principle - but the revisit should
not be fact-centric or quantum-centric - said amount should be enhanced on percentage basis in
every three years and the enhancement should be at the rate of 10% in a span of three years.

Motor Vehicles Act, 1988 - S. 168 - "just compensation" - future prospects - S. 168 of the Act deals
with the concept of "just compensation" and the same has to be determined on the foundation of
fairness, reasonableness and equitability on acceptable legal standard because such determination
can never be in arithmetical exactitude - it can never be perfect - aim is to achieve acceptable
degree of proximity to arithmetical precision on the basis of materials brought on record in an
individual case - conception of "just compensation" has to be viewed through the prism of fairness,
reasonableness and non-violation of the principle of equitability - as far as future prospects are
concerned, there has been standardization keeping in view the principle of certainty, stability and
consistency - principle of "standardization" is approved so that a specific and certain multiplicand is
determined for applying the multiplier on the basis of age.

Motor Vehicles Act, 1988 - S. 166, 168 - compensation - future prospects - principle of
standardization - to follow the doctrine of actual income at the time of death and not to add any
amount with regard to future prospects to the income for the purpose of determination of
multiplicand would be unjust - determination of income while computing compensation has to
include future prospects so that the method will come within the ambit and sweep of just
compensation as postulated u/s. 168 of the Act - no distinction whether deceased self-employed or
on a fixed salary - there can be some degree of difference as regards percentage that is meant for or
applied to in respect of legal representatives who claim on behalf of deceased who had a permanent
job than person who is self-employed or on a fixed salary - but not to apply principle of
standardization on foundation of perceived lack of certainty would tantamount to remaining
oblivious to marrows of ground reality - therefore, degree-test is imperative - unless the degree-test
is applied and left to parties to adduce evidence to establish, it would be unfair and inequitable -
degree-test has to have inbuilt concept of percentage - taking into consideration cumulative factors,
passage of time, changing society, escalation of price, change in price index, human attitude to
follow particular pattern of life, etc., addition of 40% of established income of deceased towards
future prospects and where deceased was below 40 years addition of 25% where deceased was
between age of 40 to 50 years would be reasonable.

Motor Vehicles Act, 1988 - S. 166, 168 - compensation - future prospects - whether there should be
no addition where the age of the deceased is more than 50 years - held, there should be addition of
15% if deceased is between age of 50 to 60 years and there should be no addition thereafter -
further, in case of self-employed or person on fixed salary, addition should be 10% between age of
50 to 60 years - said yardstick has been fixed so that there can be consistency in the approach by
the tribunals and the courts - while determining the income, an addition of 50% of actual salary to
the income of the deceased towards future prospects, where the deceased had a permanent job and
was below the age of 40 years, should be made - addition should be 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, addition
should be 15% - actual salary should be read as actual salary less tax - in case deceased was self-
employed or on a fixed salary, an addition of 40% of the established income should be the warrant
where the deceased was below the age of 40 years - an addition of 25% where the deceased was
between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60
years should be regarded as the necessary method of computation - established income means the
income minus the tax component - matters be placed before the appropriate Bench.

Imp.Para: [ 29 ] [ 30 ] [ 46 ] [ 54 ] [ 57 ] [ 59 ] [ 60 ] [ 61 ]

Cases Referred To :

1. Seshamma v. Venkata Narasimharao AIR 1962 SC 83

2. Abati Bezbaruah V. Dy. Director General, Geological Survey Of India, 2003 3 SCC 148 : 2003 AIR
SC 1817 : 2003 (2) Scale 120 : JT 2003 (5) 205 : 2003 (1) SCR 1229
3. Chandra Prakash And Others V. State Of U.P. And Another, 2002 4 SCC 234 : 2002 AIR SC 1652 :
2002 (3) Scale 311 : JT 2002 (3) 492 : 2002 (2) SCR 913
4. Davies V. Powell Duffryn Associated Collieries Ltd., 1942 0 AC 601
5. Deepal Girishbhai Soni V. United India Insurance Co. Ltd., 2004 5 SCC 385 : 2004 AIR SC 2107 :
2004 (3) Scale 546 : JT 2004 (4) 83 : 2004 (3) SCR 213
 6. G.L. Batra V. State Of Haryana And Others, 2014 13 SCC 759 : 2013 (11) Scale 451 : 2013 (10)
SCR 431 : 2013 AIR SCW 6242 : 2013 (7) Supreme 226
7. Indian Oil Corporation Ltd. V. Municipal Corporation, 1995 4 SCC 96 : 1995 AIR SC 1480 : 1995
(2) Scale 744 : JT 1995 (3) 626 : 1995 (3) SCR 246
8. Jaisri Sahu V. Rajdewan Dubey, AIR 1962 SC 83 : 1962 (2) SCR 558 : 1962 (1) SCJ 578 : 1961
KerLT 9 : 1962 BLJR 153
9. Lord Diplock In Mallett V. Mcmonagle, 1970 0 AC 166
10. Madras Bar Association V. Union Of India And Another, 2015 8 SCC 583 : 2015 AIR SC(Supp)
1382 : 2015 (6) Scale 331 : JT 2015 (5) 33 : 2015 AIR SCW 3376
11. Munna Lal Jain And Another V. Vipin Kumar Sharma And Others, 2015 6 SCC 347 : 2015 AIR
SC(Supp) 1130 : 2015 (6) Scale 522 : JT 2015 (5) 1 : 2015 AIR SCW 3105
12. Nance V. British Columbia Electric Railway Co. Ltd., 1951 0 SC 601
13. National Insurance Company Limited V. Pushpa And Others, 2015 9 SCC 166
14. New India Assurance Co. Ltd V. Charlie And Another, 2005 10 SCC 720 : 2005 AIR SC 2157 :
2005 (3) Scale 541 : JT 2005 (11) 264 : 2005 (2) SCR 1173
15. Nirumalan V Kanapathi Pillay V. Teo Eng Chuan, 2003 3 SLR 601 : 2003 (5) SCC 12 : 2003 (5)
Scale 4 : JT 2003 (4) 564 : 2003 (Supp1) SCR 168
16. Oriental Insurance Co. Ltd. V. Jashuben, 2008 4 SCC 162 : 2008 AIR SC 1734 : 2008 (2) Scale
474 : JT 2008 (2) 415 : 2008 (2) SCR 930
17. Pradip Chandra Parija And Others V. Pramod Chandra Patnaik And Others, 2002 1 SCC 1 : 2002
AIR SC 296 : 2001 (8) Scale 384 : JT 2001 (10) 347 : 2001 SCR 460
18. Puttamma And Others V. K.L. Narayana Reddy And Another, 2013 15 SCC 45 : 2014 AIR SC 706 :
2013 (15) Scale 437 : JT 2014 (2) 201 : 2014 AIR SCW 165
19. Rajesh V. Rajbir Singh, 2015 6 SCC 347 : 2015 AIR SC(Supp) 1130 : 2015 (6) Scale 522 : JT 2015
(5) 1 : 2015 AIR SCW 3105
20. Rajesh V/s. Rajbir Singh, 2013 9 SCC 54 : 2013 (6) Scale 563 : JT 2013 (8) 288 : 2013 (5) SCR
961 : 2013 (3) SCC(Cri) 817
21. Rattiram And Others V. State Of Madhya Pradesh, 2012 4 SCC 516 : 2012 AIR SC 1485 : 2012 (2)
Scale 593 : JT 2012 (2) 408 : 2012 (3) SCR 496
22. Reshma Kumari And Others V. Madan Mohan And Another, 2009 13 SCC 422 : 2009 (10) Scale
90 : JT 2009 (10) 90 : 2009 AIR SCW 6999 : 2010 (1) SCC(Cri) 1044
23. Reshma Kumari And Others V. Madan Mohan And Another, 2013 9 SCC 65 : 2013 AIR SC(Supp)
474 : 2013 (5) Scale 160 : JT 2013 (4) 362 : 2013 (2) SCR 706
24. Sandhya Educational Society And Another V. Union Of India And Others, 2014 7 SCC 701 : 2015
(5) AllMR(SC) 467 : 2013 GLHEL_SC 56032
25. Santosh Devi V. National Insurance Company Limited And Others, 2012 6 SCC 421 : 2012 AIR SC
2185 : 2012 (4) Scale 559 : JT 2012 (4) 353 : 2012 (3) SCR 1178
26. Sarla Dixit V. Balwant Yadav, 1996 3 SCC 179 : 1996 AIR SC 1274 : 1996 (2) Scale 802 : JT 1996
(3) 252 : 1996 (3) SCR 30
27. Sarla Verma And Others V. Delhi Transport Corporation And Another, 2009 6 SCC 121 : 2009 AIR
SC 3104 : 2009 (6) Scale 129 : JT 2009 (6) 495 : 2009 (5) SCR 1098
28. State Of Bihar V. Kalika Kuer Alias Kalika Singh And Others, 2003 5 SCC 448 : 2003 AIR SC 2443 :
2003 (4) Scale 302 : JT 2003 (4) 489 : 2003 (3) SCR 919
29. Sundarjas Kanyalal Bhatija V. Collector, Thane, Maharashtra, 1989 3 SCC 396 : 1991 AIR SC 1893
: 1990 AIR SC 261 : 1989 (2) Scale 7 : JT 1989 (3) 57
30. Sundeep Kumar Bafna V. State Of Maharashtra And Another, 2014 16 SCC 623 : 2014 AIR SC
1745 : 2014 (4) Scale 215 : JT 2014 (4) 486 : 2014 (4) SCR 486
31. Supe Dei V. National Insurance Company Limited, 2009 4 SCC 513 : JT 2002 (Supp1) 451 : 2009
(2) SCC(Cri) 528 : 2002 (4) AWC 2734 : 2002 (48) ALR 237
32. Taff Vale Railway Co. V. Jenkins, 1913 0 AC 1
 33. Tribhovandas Purshottamdas Thakkar V. Ratilal Motilal Patel, AIR 1968 SC 372 : 1968 (1) SCR
455 : 1968 (2) SCJ 92 : 1968 MhLJ 287 : 1968 (1) SCA 330
34. U.P. State Road Transport Corporation And Others V. Trilok Chandra And Others, 1996 4 SCC 362
: 1996 (4) Scale 522 : JT 1996 (5) 356 : 1996 (Supp2) SCR 443 : 1996 (4) Supreme 479
35. Union Of India V. Godfrey Philips India Ltd., 1985 4 SCC 369 : 1986 AIR SC 806 : 1985 (2) Scale
619 : 1985 (Supp3) SCR 123 : 1985 (22) ELT 306
36. Union Of India V. Madras Bar Association, 2010 11 SCC 1 : 2010 (5) Scale 514 : 2010 (5) Scale
445 : JT 2010 (5) 553 : 2010 (6) SCR 957
37. United India Insurance Co. Ltd V. Patricia Jean Mahajan, 2002 6 SCC 281 : 2002 AIR SC 2607 :
2002 (5) Scale 56 : JT 2002 (5) 74 : 2002 (3) SCR 1176
38. Wells V. Wells, 1999 1 AC 345

Cited in :

1. (Referred To) :- M.H.Uma Maheshwari Vs. United India Insurance Co.Ltd., 2020 JX(SC) 429 :
2020 AIJEL_SC 66309
2. (Referred To) :- Shri Nagar Mal Vs. Oriental Insurance Company Limited, JT 2018 (1) SC 421 :
2018 JX(SC) 20 : 2018 AIJEL_SC 61547
3. (Referred To) :- Laxmidhar Nayak Vs. Jugal Kishore Behera, 2017 (13) Scale 718 : JT 2017 (11)
SC 450 : 2017 DNJ(SC) 1077 : 2017 (4) ACC 707 : 2017 JX(SC) 764 : 2017 AIJEL_SC 61296
4. (Referred To) :- Ramrao Lala Borse Vs. New India Assurance Company Limited, JT 2018 (1) SC
423 : 2018 JX(SC) 19 : 2018 AIJEL_SC 61546

Equivalent Citation(s):
2017 (16) SCC 680 : AIR 2017 SC 5157

JUDGMENT :-

Dipak Misra, J.

1 Perceiving cleavage of opinion between Reshma Kumari

and others v. Madan Mohan and another,
(2013 ) 9 SCC 65 and Rajesh and
others v. Rajbir Singh and others, (2013) 9 SCC 54 both three-Judge
Bench
decisions, a two-Judge Bench of this Court in National
Insurance Company Limited v. Pushpa
and others, (2015) 9 SCC 166 thought it
appropriate to refer the matter to a larger Bench for an
authoritative pronouncement, and that is how the matters have
been placed before us.

2 In the course of deliberation we will be required to travel

backwards covering a span of two decades
and three years and
may be slightly more and thereafter focus on the axis of the
controversy, that is,
the decision in Sarla Verma and others v.
Delhi Transport Corporation and another, (2009) 6 SCC 121
wherein the two-
Judge Bench made a sanguine endeavour to simplify the
determination of claims by
specifying certain parameters.

3 Before we penetrate into the past, it is necessary to note

what has been stated in Reshma Kumari
(supra) and Rajesh's
case. In Reshma Kumari the three-Judge Bench was answering
the reference
made in Reshma Kumari and others v. Madan
Mohan and another, (2009) 13 SCC 422. The reference
judgment noted divergence
of opinion with regard to the computation under Sections 163-A
and 166
of the Motor Vehicles Act, 1988 (for brevity, "the Act")
and the methodology for computation of future
prospects.
Dealing with determination of future prospects, the Court
referred to the decisions in Sarla
Dixit v. Balwant Yadav, (1996) 3 SCC 179
Abati Bezbaruah v. Dy. Director General, Geological Survey
of
India, (2003) 3 SCC 148 and the principle stated by Lord Diplock in Mallett v.
McMonagle, 1970 AC
166: (1969) 2 WLR 767 and further referring to the statement of law in
Wells v. Wells, (1999) 1 AC 345
observed:-

"46. In the Indian context several other factors

should be taken into consideration including
education of the dependants and the nature of job.
In the wake of changed societal conditions
and
global scenario, future prospects may have to be
taken into consideration not only having
regard to
the status of the employee, his educational
qualification; his past performance but also
other
relevant factors, namely, the higher salaries and
perks which are being offered by the
private
companies these days. In fact while determining the
multiplicand this Court in Oriental
Insurance Co.
Ltd. v. Jashuben, (2008) 4 SCC 162 held that even dearness
allowance and perks
with regard thereto from which
the family would have derived monthly benefit,
must be taken
into consideration.

47. One of the incidental issues which has also to

be taken into consideration is inflation. Is the
practice of taking inflation into consideration wholly
incorrect? Unfortunately, unlike other
developed
countries in India there has been no scientific
study. It is expected that with the rising
inflation
the rate of interest would go up. In India it does not
happen. It, therefore, may be a
relevant factor which
may be taken into consideration for determining the
actual ground reality.
No hard-and-fast rule,
however, can be laid down therefor.

48. A large number of English decisions have been

placed before us by Mr Nanda to contend
that
inflation may not be taken into consideration at all.
While the reasonings adopted by the
English courts
and its decisions may not be of much dispute, we
cannot blindly follow the same
ignoring ground
realities.

49. We have noticed the precedents operating in the

field as also the rival contentions raised
before us
by the learned counsel for the parties with a view to
show that law is required to be
laid down in clearer
terms."

4 In the said case, the Court considered the common

questions that arose for consideration. They
are:-

"(1) Whether the multiplier specified in the Second

Schedule appended to the Act should be
scrupulously applied in all the cases?

(2) Whether for determination of the multiplicand,

the Act provides for any criterion, particularly
as
regards determination of future prospects?"

5 Analyzing further the rationale in determining the laws

under Sections 163-A and 166, the Court had
stated thus:-

"58. We are not unmindful of the Statement of

Objects and Reasons to Act 54 of 1994 for
introducing Section 163-A so as to provide for a new
predetermined formula for payment of
compensation to road accident victims on the basis
of age/income, which is more liberal and
rational.
That may be so, but it defies logic as to why in a
similar situation, the injured claimant or
his
heirs/legal representatives, in the case of death, on
proof of negligence on the part of the
driver of a
motor vehicle would get a lesser amount than the
one specified in the Second
Schedule. The courts, in
our opinion, should also bear that factor in mind."

6 Noticing the divergence of opinion and absence of any

clarification from Parliament despite the
recommendations by
this Court, it was thought appropriate that the controversy
should be decided by
the larger Bench and accordingly it directed
to place the matter before Hon'ble the Chief Justice of
India for
appropriate orders for constituting a larger Bench.
7 The three-Judge Bench answering the reference referred to
the Scheme under Sections 163-A and
166 of the Act and took
note of the view expressed by this Court in U.P. State Road
Transport
Corporation and others v. Trilok Chandra and
others, (1996) 4 SCC 362 wherein the Court had stated:-

"17. The situation has now undergone a change

with the enactment of the Motor Vehicles Act,
1988 ,
as amended by Amendment Act 54 of 1994. The
most important change introduced by
the
amendment insofar as it relates to determination of
compensation is the insertion of
Sections 163-A and
163-B in Chapter XI entitled 'Insurance of motor
vehicles against third-party
risks'. Section 163-A
begins with a non obstante clause and provides for
payment of
compensation, as indicated in the
Second Schedule, to the legal representatives of the
deceased
or injured, as the case may be. Now if we
turn to the Second Schedule, we find a Table fixing
the
mode of calculation of compensation for third party
accident injury claims arising out of fatal
accidents. The first column gives the age group of
the victims of accident, the second column
indicates
the multiplier and the subsequent horizontal figures
indicate the quantum of
compensation in thousand
payable to the heirs of the deceased victim.
According to this Table
the multiplier varies from 5
to 18 depending on the age group to which the
victim belonged.
Thus, under this Schedule the
maximum multiplier can be up to 18 and not 16 as
was held in
Susamma Thomas, (1994) 2 SCC 176 case.

18. We must at once point out that the calculation

of compensation and the amount worked out
in the
Schedule suffer from several defects. For example,
in Item 1 for a victim aged 15 years,
the multiplier
is shown to be 15 years and the multiplicand is
shown to be Rs 3000. The total
should be 3000 � 15
= 45,000 but the same is worked out at Rs 60,000.
Similarly, in the second
item the multiplier is 16
and the annual income is Rs 9000; the total should
have been Rs
1,44,000 but is shown to be Rs
1,71,000. To put it briefly, the Table abounds in
such mistakes.
Neither the tribunals nor the courts
can go by the ready reckoner. It can only be used as
a guide.
Besides, the selection of multiplier cannot
in all cases be solely dependent on the age of the
deceased. For example, if the deceased, a bachelor,
dies at the age of 45 and his dependants are
his
parents, age of the parents would also be relevant in
the choice of the multiplier. But these
mistakes are
limited to actual calculations only and not in
respect of other items. What we
propose to
emphasise is that the multiplier cannot exceed 18
years' purchase factor. This is the
improvement over
the earlier position that ordinarily it should not
exceed 16. We thought it
necessary to state the
correct legal position as courts and tribunals are
using higher multiplier
as in the present case where
the Tribunal used the multiplier of 24 which the
High Court raised
to 34, thereby showing lack of
awareness of the background of the multiplier
system in Davies
case."

[Underlining is ours]

8 The Court also referred to Supe Dei v. National Insurance

Company Limited, (2009) 4 SCC 513
wherein it has been opined that the position
is well settled that the Second Schedule under Section
163-A to
the Act which gives the amount of compensation to be
determined for the purpose of claim
under the section can be
taken as a guideline while determining the compensation under
Section 166
of the Act.

9 After so observing, the Court also noted the authorities in

United India Insurance Co. Ltd v. Patricia
Jean Mahajan, (2002) 6 SCC 281
Deepal Girishbhai Soni v. United India Insurance Co. Ltd., (2004) 5
SCC 385
and Jashuben (supra). It is perceivable from the pronouncement
by the three-Judge Bench
that it has referred to Sarla Verma and
observed that the said decision reiterated what had been
stated
in earlier decisions that the principles relating to determination of
liability and quantum of
compensation were different for claims
made under Section 163-A and claims made under Section
166.
It was further observed that Section 163-A and the Second
Schedule in terms did not apply to
determination of
compensation in applications under Section 166. In Sarla
Verma (supra), as has been
noticed further in Reshma Kumari
(supra), the Court found discrepancies/errors in the multiplier
scale
given in the Second Schedule Table and also observed that
application of Table may result in
incongruities.

10 The three-Judge Bench further apprised itself that in Sarla

Verma (supra) the Court had undertaken
the exercise of
comparing the multiplier indicated in Susamma Thomas
(supra), Trilok Chandra
(supra), and New India Assurance Co.
Ltd v. Charlie and another, (2005) 10 SCC 720 for claims under
Section 166 of
the Act with the multiplier mentioned in the Second Schedule for
claims under Section
163-A and compared the formula and held
that the multiplier shall be used in a given case in the
following
manner:-

"42. We therefore hold that the multiplier to be used

should be as mentioned in Column (4) of the
Table
above (prepared by applying Susamma Thomas,
Trilok Chandra and Charlie), which starts
with an
operative multiplier of 18 (for the age groups of 15
to 20 and 21 to 25 years); reduced by
one unit for
every five years, that is, M-17 for 26 to 30 years, M-
16 for 31 to 35 years, M-15 for 36
to 40 years, M-14
for 41 to 45 years, and M-13 for 46 to 50 years,
then reduced by two units for
every five years, that
is, M-11 for 51 to 55 years, M-9 for 56 to 60 years,
M-7 for 61 to 65 years
and M-5 for 66 to 70 years."

11 After elaborately analyzing what has been stated in Sarla

Verma (supra), the three-Judge Bench
referred to the language
employed in Section 168 of the Act which uses the expression
"just".
Elucidating the said term, the Court held that it conveys
that the amount so determined is fair,
reasonable and equitable
by accepted legal standard and not on forensic lottery. The Court
observed
"just compensation" does not mean "perfect" or
"absolute compensation" and the concept of just
compensation
principle requires examination of the particular situation
obtaining uniquely in an
individual case. In that context, it
referred to Taff Vale Railway Co. v. Jenkins, 1913 AC 1 : (1911-13) All
ER Rep 160 (HL)
and held:-

"36. In Sarla Verma, this Court has endeavoured to

simplify the otherwise complex exercise of
assessment of loss of dependency and
determination of compensation in a claim made
under
Section 166. It has been rightly stated in
Sarla Verma that the claimants in case of death
claim
for the purposes of compensation must
establish (a) age of the deceased; (b) income of the
deceased; and (c) the number of dependants. To
arrive at the loss of dependency, the Tribunal
must
consider (i) additions/deductions to be made for
arriving at the income; (ii) the deductions
to be
made towards the personal living expenses of the
deceased; and (iii) the multiplier to be
applied with
reference to the age of the deceased. We do not
think it is necessary for us to
revisit the law on the
point as we are in full agreement with the view in
Sarla Verma."

[Emphasis is added]

12 And further:-

"It is high time that we move to a standard method

of selection of multiplier, income for future
prospects and deduction for personal and living
expenses. The courts in some of the overseas
jurisdictions have made this advance. It is for these
reasons, we think we must approve the
Table in
Sarla Verma for the selection of multiplier in claim
applications made under Section 166
in the cases of
death. We do accordingly. If for the selection of
multiplier, Column (4) of the
Table in Sarla Verma is
followed, there is no likelihood of the claimants who
have chosen to
apply under Section 166 being
awarded lesser amount on proof of negligence on
the part of the
driver of the motor vehicle than those
who prefer to apply under Section 163-A. As regards
the
cases where the age of the victim happens to be
up to 15 years, we are of the considered
 opinion
that in such cases irrespective of Section 163-A or
Section 166 under which the claim
for
compensation has been made, multiplier of 15 and
the assessment as indicated in the
Second Schedule
subject to correction as pointed out in Column (6) of
the Table in Sarla Verma
should be followed. This is
to ensure that the claimants in such cases are not
awarded lesser
amount when the application is
made under Section 166 of the 1988 Act. In all
other cases of
death where the application has been
made under Section 166, the multiplier as indicated
in
Column (4) of the Table in Sarla Verma should be
followed."

This is how the first question the Court had posed stood
answered.

13 With regard to the addition of income for future prospects,

this Court in Reshma Kumari (supra)
adverted to Para 24 of the
Sarla Verma's case and held:-

"39. The standardisation of addition to income for

future prospects shall help in achieving
certainty in
arriving at appropriate compensation. We approve
the method that an addition of
50% of actual salary
be made to the actual salary income of the deceased
towards future
prospects where the deceased had a
permanent job and was below 40 years and the
addition
should be only 30% if the age of the
deceased was 40 to 50 years and no addition should
be
made where the age of the deceased is more than
50 years. Where the annual income is in the
taxable
range, the actual salary shall mean actual salary
less tax. In the cases where the
deceased was self employed
or was on a fixed salary without provision
for annual increments,
the actual income at the
time of death without any addition to income for
future prospects will
be appropriate. A departure
from the above principle can only be justified in
extraordinary
circumstances and very exceptional
cases."

The aforesaid analysis vividly exposits that standardization

of addition to income for future prospects
is helpful in achieving
certainty in arriving at appropriate compensation. Thus, the
larger Bench has
concurred with the view expressed by Sarla
Verma (supra) as per the determination of future income.

14 It is interesting to note here that while the reference was

pending, the judgment in Santosh Devi v.
National Insurance
Company Limited and others, (2012) 6 SCC 421 was delivered by a two-Judge
Bench which commented on the principle stated in Sarla Verma.
It said:-

"14. We find it extremely difficult to fathom any

rationale for the observation made in para 24 of
the
judgment in Sarla Verma case that where the
deceased was self-employed or was on a fixed
salary
without provision for annual increment, etc. the
courts will usually take only the actual
income at
the time of death and a departure from this rule
should be made only in rare and
exceptional cases
involving special circumstances. In our view, it will
be na�ve to say that the
wages or total
emoluments/income of a person who is self-employed
or who is employed on a
fixed salary
without provision for annual increment, etc. would
remain the same throughout his
life.

15. The rise in the cost of living affects everyone

across the board. It does not make any
distinction
between rich and poor. As a matter of fact, the effect
of rise in prices which directly
impacts the cost of
living is minimal on the rich and maximum on those
who are self-employed
or who get fixed
income/emoluments. They are the worst affected
people. Therefore, they put in
extra efforts to
generate additional income necessary for sustaining
their families.

16. The salaries of those employed under the

Central and State Governments and their
agencies/instrumentalities have been revised from
time to time to provide a cushion against the
rising
prices and provisions have been made for providing
security to the families of the
deceased employees.
The salaries of those employed in private sectors
have also increased
 manifold. Till about two
decades ago, nobody could have imagined that
salary of Class IV
employee of the Government
would be in five figures and total emoluments of
those in higher
echelons of service will cross the
figure of rupees one lakh.

17. Although the wages/income of those employed

in unorganised sectors has not registered a
corresponding increase and has not kept pace with
the increase in the salaries of the
government
employees and those employed in private sectors,
but it cannot be denied that there
has been
incremental enhancement in the income of those
who are self-employed and even
those engaged on
daily basis, monthly basis or even seasonal basis.
We can take judicial notice
of the fact that with a
view to meet the challenges posed by high cost of
living, the persons
falling in the latter category
periodically increase the cost of their labour. In this
context, it may
be useful to give an example of a
tailor who earns his livelihood by stitching clothes.
If the cost
of living increases and the prices of
essentials go up, it is but natural for him to
increase the cost
of his labour. So will be the cases
of ordinary skilled and unskilled labour like barber,
blacksmith,
cobbler, mason, etc.

18. Therefore, we do not think that while making

the observations in the last three lines of para
24 of
Sarla Verma judgment, the Court had intended to
lay down an absolute rule that there will
be no
addition in the income of a person who is self-employed
or who is paid fixed wages.
Rather, it
would be reasonable to say that a person who is
self-employed or is engaged on fixed
wages will also
get 30% increase in his total income over a period of
time and if he/she
becomes victim of an accident
then the same formula deserves to be applied for
calculating the
amount of compensation."

15 The aforesaid analysis in Santosh Devi (supra) may prima

facie show that the two-Judge Bench
has distinguished the
observation made in Sarla Verma's case but on a studied
scrutiny, it becomes
clear that it has really expressed a different
view than what has been laid down in Sarla Verma (supra).
If
we permit ourselves to say so, the different view has been
expressed in a distinctive tone, for the
two-Judge Bench had
stated that it was extremely difficult to fathom any rationale for
the
observations made in para 24 of the judgment in Sarla
Verma's case in respect of self-employed or a
person on fixed
salary without provision for annual increment, etc. This is a
clear disagreement with
the earlier view, and we have no
hesitation in saying that it is absolutely impermissible keeping in
view
the concept of binding precedents.

16 Presently, we may refer to certain decisions which deal with

the concept of binding precedent.

17 In State of Bihar v. Kalika Kuer alias Kalika Singh and

others, (2003) 5 SCC 448 it has been held:-

"10. ... an earlier decision may seem to be incorrect

to a Bench of a coordinate jurisdiction
considering
the question later, on the ground that a possible
aspect of the matter was not
considered or not
raised before the court or more aspects should have
been gone into by the
court deciding the matter
earlier but it would not be a reason to say that the
decision was
rendered per incuriam and liable to be
ignored. The earlier judgment may seem to be not
correct
yet it will have the binding effect on the later
Bench of coordinate jurisdiction. ..."

The Court has further ruled:-

"10. ... Easy course of saying that earlier decision

was rendered per incuriam is not permissible
and
the matter will have to be resolved only in two ways
- either to follow the earlier decision or
refer the
matter to a larger Bench to examine the issue, in
case it is felt that earlier decision is
not correct on
merits."
18 In G.L. Batra v. State of Haryana and others, (2014) 13 SCC 759 the Court
has accepted the said
principle on the basis of judgments of this
Court rendered in Union of India v. Godfrey Philips India
Ltd., (1985) 4 SCC 369 Sundarjas Kanyalal Bhatija v. Collector, Thane,
Maharashtra, 1989) 3 SCC 396
and Tribhovandas Purshottamdas Thakkar v.
Ratilal Motilal Patel, AIR 1968 SC 372. It may be noted
here that the
Constitution Bench in Madras Bar Association v. Union of
India and another, (2015) 8
SCC 583 has clearly stated that the prior
Constitution Bench judgment in Union of India v. Madras Bar
Association, (2010) 11 SCC 1 is a binding precedent. Be it clarified, the issues
that were put to rest in
the earlier Constitution Bench judgment
were treated as precedents by latter Constitution Bench.

19 In this regard, we may refer to a passage from Jaisri Sahu

v. Rajdewan Dubey, AIR 1962 SC 83:-

"11. Law will be bereft of all its utility if it should be

thrown into a state of uncertainty by reason
of
conflicting decisions, and it is therefore desirable
that in case of difference of opinion, the
question
should be authoritatively settled. It sometimes
happens that an earlier decision given
by a Bench is
not brought to the notice of a Bench hearing the
same question, and a contrary
decision is given
without reference to the earlier decision. The
question has also been discussed
as to the correct
procedure to be followed when two such conflicting
decisions are placed
before a later Bench. The
practice in the Patna High Court appears to be that
in those cases, the
earlier decision is followed and
not the later. In England the practice is, as noticed
in the
judgment in Seshamma v. Venkata
Narasimharao AIR 1962 SC 83 that the decision of a court of
appeal
is considered as a general rule to be binding on it.
There are exceptions to it, and one of
them is thus
stated in Halsbury's Laws of England, 3rd Edn., Vol.
22, para 1687, pp. 799-800:

"The court is not bound to follow a decision of

its own if given per incuriam. A decision is given
per incuriam when the court has acted in
ignorance of a previous decision of its own or of
a
Court of a co-ordinate jurisdiction which
covered the case before it, or when it has acted
in
ignorance of a decision of the House of Lords.
In the former case it must decide which decision
to follow, and in the latter it is bound by the
decision of the House of Lords."

In Virayya v. Venkata Subbayya it has been held by

the Andhra High Court that under the
circumstances aforesaid the Bench is free to adopt
that view which is in accordance with justice and
legal principles after taking into consideration the
views expressed in the two conflicting Benches,
vide
also the decision of the Nagpur High Court in
Bilimoria v. Central Bank of India. The better course
would be for the Bench hearing the case to refer the
matter to a Full Bench in view of the conflicting
authorities without taking upon itself to decide
whether it should follow the one Bench decision or
the
other. We have no doubt that when such
situations arise, the Bench hearing cases would
refer the
matter for the decision of a Full Court."

20 Though the aforesaid was articulated in the context of the

High Court, yet this Court has been
following the same as is
revealed from the aforestated pronouncements including that of
the
Constitution Bench and, therefore, we entirely agree with the
said view because it is the precise
warrant of respecting a
precedent which is the fundamental norm of judicial discipline.

21 In the context, we may fruitfully note what has been stated

in Pradip Chandra Parija and others v.
Pramod Chandra
Patnaik and others, (2002) 1 SCC 1. In the said case, the Constitution Bench
was
dealing with a situation where the two-Judge Bench
disagreeing with the three-Judge Bench decision
directed the
matter to be placed before a larger Bench of five Judges of this
Court. In that scenario,
the Constitution Bench stated:-

"6. ... In our view, judicial discipline and propriety

demands that a Bench of two learned Judges
should
follow a decision of a Bench of three learned Judges.
But if a Bench of two learned
Judges concludes that
an earlier judgment of three learned Judges is so very
incorrect that in no
 circumstances can it be followed,
the proper course for it to adopt is to refer the matter
before it
to a Bench of three learned Judges setting
out, as has been done here, the reasons why it could
not agree with the earlier judgment. ..."

22 In Chandra Prakash and others v. State of U.P. and

another, (2002) 4 SCC 234 another Constitution
Bench dealing with the concept
of precedents stated thus:-

"22. ... The doctrine of binding precedent is of utmost

importance in the administration of our
judicial
system. It promotes certainty and consistency in
judicial decisions. Judicial consistency
promotes
confidence in the system, therefore, there is this need
for consistency in the
enunciation of legal principles in
the decisions of this Court. It is in the above context,
this Court
in the case of Raghubir Singh, (1989) 2 SCC 754 held that a
pronouncement of law by a Division
Bench of this
Court is binding on a Division Bench of the same or
smaller number of Judges. ..."

23 Be it noted, Chandra Prakash concurred with the view

expressed in Raghubir Singh and Pradip
Chandra Parija.

24 In Sandhya Educational Society and another v. Union

of India and others, (2014) 7 SCC 701 it has
been observed that judicial
decorum and discipline is paramount and, therefore, a coordinate
Bench
has to respect the judgments and orders passed by
another coordinate Bench. In Rattiram and others
v. State of
Madhya Pradesh, (2012) 4 SCC 516 the Court dwelt upon the issue what would
be the
consequent effect of the latter decision which had been
rendered without noticing the earlier
decisions. The Court noted
the observations in Raghubir Singh (supra) and reproduced a
passage
from Indian Oil Corporation Ltd. v. Municipal
Corporation, (1995) 4 SCC 96 which is to the following
effect:-

"8. ... The Division Bench of the High Court in

Municipal Corpn., Indore v. Ratnaprabha Dhanda
was clearly in error in taking the view that the
decision of this Court in Ratnaprabha was not
binding on it. In doing so, the Division Bench of the
High Court did something which even a later
coequal
Bench of this Court did not and could not
do. ..."

25 It also stated what has been expressed in Raghubir Singh

(supra) by R.S. Pathak, C.J. It is as
follows:-

"28. We are of opinion that a pronouncement of law

by a Division Bench of this Court is binding
on a
Division Bench of the same or a smaller number of
Judges, and in order that such decision
be binding,
it is not necessary that it should be a decision
rendered by the Full Court or a
Constitution Bench
of the Court. ..."

26 In Rajesh (supra) the three-Judge Bench had delivered the

judgment on 12.04.2013. The purpose
of stating the date is that
it has been delivered after the pronouncement made in Reshma
Kumari's
case. On a perusal of the decision in Rajesh (supra),
we find that an attempt has been made to explain
what the two-
Judge Bench had stated in Santosh Devi (supra). The relevant
passages read as
follows:-

"8. Since, the Court in Santosh Devi case actually

intended to follow the principle in the case of
salaried persons as laid down in Sarla Verma case
and to make it applicable also to the self-
employed
and persons on fixed wages, it is clarified that the
increase in the case of those
groups is not 30%
always; it will also have a reference to the age. In
other words, in the case of
self-employed or persons
with fixed wages, in case, the deceased victim was
below 40 years,
there must be an addition of 50% to
the actual income of the deceased while computing
future
prospects. Needless to say that the actual
income should be income after paying the tax, if
any.
Addition should be 30% in case the deceased
was in the age group of 40 to 50 years.
 9. In Sarla Verma case, it has been stated that in
the case of those above 50 years, there shall be
no
addition. Having regard to the fact that in the case
of those self-employed or on fixed wages,
where
there is normally no age of superannuation, we are
of the view that it will only be just and
equitable to
provide an addition of 15% in the case where the
victim is between the age group of
50 to 60 years so
as to make the compensation just, equitable, fair
and reasonable. There shall
normally be no addition
thereafter."

27 At this juncture, it is necessitous to advert to another three-

Judge Bench decision in Munna Lal
Jain and another v. Vipin
Kumar Sharma and others, (2015) 6 SCC 347. In the said case, the three-
Judge
Bench commenting on the judgments stated thus:-

"2. In the absence of any statutory and a

straitjacket formula, there are bound to be grey
areas
despite several attempts made by this Court
to lay down the guidelines. Compensation would
basically depend on the evidence available in a case
and the formulas shown by the courts are
only
guidelines for the computation of the compensation.
That precisely is the reason the courts
lodge a
caveat stating "ordinarily", "normally", "exceptional
circumstances", etc., while suggesting
the formula."

28 After so stating, the Court followed the principle stated in

Rajesh. We think it appropriate to
reproduce what has been
stated by the three-Judge Bench:-

"10. As far as future prospects are concerned, in

Rajesh v. Rajbir Singh, (2015) 6 SCC 347 a
three-Judge Bench of this
Court held that in case of self-employed persons
also, if the deceased
victim is below 40 years, there
must be addition of 50% to the actual income of the
deceased
while computing future prospects."

29 We are compelled to state here that in Munna Lal Jain

(supra), the three-Judge Bench should have
been guided by the
principle stated in Reshma Kumari which has concurred with the
view expressed in
Sarla Devi or in case of disagreement, it should
have been well advised to refer the case to a larger
Bench. We
say so, as we have already expressed the opinion that the dicta
laid down in Reshma
Kumari being earlier in point of time would
be a binding precedent and not the decision in Rajesh.

30 In this context, we may also refer to Sundeep Kumar

Bafna v. State of Maharashtra and another,
(2014) 16 SCC 623 which correctly
lays down the principle that discipline demanded by a precedent
or
the disqualification or diminution of a decision on the
application of the per incuriam rule is of great
importance, since
without it, certainty of law, consistency of rulings and comity of
courts would
become a costly casualty. A decision or judgment
can be per incuriam any provision in a statute, rule
or regulation,
which was not brought to the notice of the court. A decision or
judgment can also be per
incuriam if it is not possible to reconcile
its ratio with that of a previously pronounced judgment of a
coequal
or larger Bench. There can be no scintilla of doubt that an
earlier decision of co-equal Bench
binds the Bench of same
strength. Though the judgment in Rajesh's case was delivered on
a later
date, it had not apprised itself of the law stated in
Reshma Kumari (supra) but had been guided by
Santosh Devi
(supra). We have no hesitation that it is not a binding precedent
on the co-equal Bench.

31 At this stage, a detailed analysis of Sarla Verma (supra) is

necessary. In the said case, the Court
recapitulated the relevant
principles relating to assessment of compensation in case of
death and
also took note of the fact that there had been
considerable variation and inconsistency in the decision
for
Courts and Tribunals on account of adopting the method stated
in Nance v. British Columbia
Electric Railway Co. Ltd., 1951 SC 601 : (1951) 2 All ER 448 (PC) and
the method in Davies v. Powell
Duffryn Associated Collieries
Ltd., 1942 AC 601 : (1942) 1 All ER 657 (HL) It also analysed the
difference between the considerations
of the two different methods by this Court in Susamma
Thomas
(supra) wherein preference was given to Davies method to the
Nance method. Various
paragraphs from Susamma Thomas
(supra) and Trilok Chandra (supra) have been reproduced and
thereafter it has been observed that lack of uniformity and
consistency in awarding the compensation
has been a matter of
grave concern. It has stated that when different tribunals
calculate
compensation differently on the same facts, the
claimant, the litigant and the common man are bound
to be
confused, perplexed and bewildered. It adverted to the
observations made in Trilok Chandra
(supra) which are to the
following effect:-

"15. We thought it necessary to reiterate the method

of working out 'just' compensation because,
of late,
we have noticed from the awards made by tribunals
and courts that the principle on
which the
multiplier method was developed has been lost sight
of and once again a hybrid
method based on the
subjectivity of the Tribunal/court has surfaced,
introducing uncertainty and
lack of reasonable
uniformity in the matter of determination of
compensation. It must be
realised that the
Tribunal/court has to determine a fair amount of
compensation awardable to
the victim of an
accident which must be proportionate to the injury
caused. ..."

32 While adverting to the addition of income for future

prospects, it stated thus:-

"24. In Susamma Thomas this Court increased the

income by nearly 100%, in Sarla Dixit the
income
was increased only by 50% and in Abati Bezbaruah
the income was increased by a mere
7%. In view of
the imponderables and uncertainties, we are in
favour of adopting as a rule of
thumb, an addition of
50% of actual salary to the actual salary income of
the deceased towards
future prospects, where the
deceased had a permanent job and was below 40
years. (Where the
annual income is in the taxable
range, the words "actual salary" should be read as
"actual salary
less tax"). The addition should be
only 30% if the age of the deceased was 40 to 50
years. There
should be no addition, where the age of
the deceased is more than 50 years. Though the
evidence may indicate a different percentage of
increase, it is necessary to standardise the
addition
to avoid different yardsticks being applied or
different methods of calculation being
adopted.
Where the deceased was self-employed or was on a
fixed salary (without provision for
annual
increments, etc.), the courts will usually take only
the actual income at the time of death.
A departure
therefrom should be made only in rare and
exceptional cases involving special
circumstances."

33 Though we have devoted some space in analyzing the

precedential value of the judgments, that is
not the thrust of the
controversy. We are required to keenly dwell upon the heart of
the issue that
emerges for consideration. The seminal
controversy before us relates to the issue where the
deceased was
self-employed or was a person on fixed salary without provision
for annual increment,
etc., what should be the addition as
regards the future prospects. In Sarla Verma, the Court has
made
it as a rule that 50% of actual salary could be added if the
deceased had a permanent job and if the
age of the deceased is
between 40 - 50 years and no addition to be made if the deceased
was more
than 50 years. It is further ruled that where deceased
was self-employed or had a fixed salary (without
provision for
annual increment, etc.) the Courts will usually take only the
actual income at the time of
death and the departure is
permissible only in rare and exceptional cases involving special
circumstances.

34 First, we shall deal with the reasoning of straitjacket

demarcation between the permanent
employed persons within
the taxable range and the other category where deceased was
self-
employed or employed on fixed salary sans annual
increments, etc.

35 The submission, as has been advanced on behalf of the

insurers, is that the distinction between
the stable jobs at one
end of the spectrum and self-employed at the other end of the
spectrum with
the benefit of future prospects being extended to
the legal representatives of the deceased having a
permanent job
is not difficult to visualize, for a comparison between the two
categories is a necessary
ground reality. It is contended that
guaranteed/definite income every month has to be treated with a
different parameter than the person who is self-employed
inasmuch as the income does not remain
constant and is likely
to oscillate from time to time. Emphasis has been laid on the date
of expected
superannuation and certainty in permanent job in
contradistinction to the uncertainty on the part of a
self-employed
person. Additionally, it is contended that the
permanent jobs are generally stable and
for an assessment the
entity or the establishment where the deceased worked is
identifiable since
they do not suffer from the inconsistencies and
vagaries of self-employed persons. It is canvassed
that it may not
be possible to introduce an element of standardization as
submitted by the claimants
because there are many a category in
which a person can be self-employed and it is extremely difficult
to assimilate entire range of self-employed categories or
professionals in one compartment. It is also
asserted that in
certain professions addition of future prospects to the income as
a part of
multiplicand would be totally an unacceptable concept.
Examples are cited in respect of categories of
professionals who
are surgeons, sports persons, masons and carpenters, etc. It is
also highlighted
that the range of self-employed persons can
include unskilled labourer to a skilled person and hence,
they
cannot be put in a holistic whole. That apart, it is propounded
that experience of certain
professionals brings in disparity in
income and, therefore, the view expressed in Sarla Verma
(supra)
that has been concurred with Reshma Kumari (supra)
should not be disturbed.

36 Quite apart from the above, it is contended that the

principle of standardization that has been
evolved in Sarla
Verma (supra) has been criticized on the ground that it grants
compensation without
any nexus to the actual loss. It is also
urged that even if it is conceded that the said view is correct,
extension of the said principle to some of the self-employed
persons will be absolutely unjustified and
untenable. Learned
counsel for the insurers further contended that the view
expressed in Rajesh
(supra) being not a precedent has to be
overruled and the methodology stood in Sarla Verma (supra)
should be accepted.

37 On behalf of the claimants, emphasis is laid on the concept

of "just compensation" and what
should be included within the
ambit of "just compensation". Learned counsel have emphasized
on
Davies method and urged that the grant of pecuniary
advantage is bound to be included in the future
pecuniary
benefit. It has also been put forth that in right to receive just
compensation under the
statute, when the method of
standardization has been conceived and applied, there cannot be
any
discrimination between the person salaried or self-employed.
It is highlighted that if evidence is not
required to be adduced in
one category of cases, there is no necessity to compel the other
category to
adduce evidence to establish the foundation for
addition of future prospects.

38 Stress is laid on reasonable expectation of pecuniary

benefits relying on the decisions in Tafe Vale
Railway Co.
(supra) and the judgment of Singapore High Court in Nirumalan
V Kanapathi Pillay v. Teo
Eng Chuan, (2003) 3 SLR (R) 601. Lastly, it is urged that
the standardization formula for awarding
future income should
be applied to self-employed persons and that would be a
justifiable measure for
computation of loss of dependency.

39 Before we proceed to analyse the principle for addition of

future prospects, we think it seemly to
clear the maze which is
vividly reflectible from Sarla Verma, Reshma Kumari, Rajesh
and Munna Lal
Jain. Three aspects need to be clarified. The
first one pertains to deduction towards personal and
living
expenses. In paragraphs 30, 31 and 32, Sarla Verma lays
down:-

"30. Though in some cases the deduction to be made

towards personal and living expenses is
calculated on
the basis of units indicated in Trilok Chandra4, the
general practice is to apply
standardised deductions.
Having considered several subsequent decisions of this
Court, we are
of the view that where the deceased was
married, the deduction towards personal and living
expenses of the deceased, should be one-third (1/3rd)
where the number of dependent family
 members is 2
to 3, one-fourth (1/4th) where the number of
dependent family members is 4 to 6,
and one-fifth
(1/5th) where the number of dependent family
members exceeds six.

31. Where the deceased was a bachelor and the

claimants are the parents, the deduction follows
a
different principle. In regard to bachelors, normally,
50% is deducted as personal and living
expenses,
because it is assumed that a bachelor would tend to
spend more on himself. Even
otherwise, there is also
the possibility of his getting married in a short time, in
which event the
contribution to the parent(s) and
siblings is likely to be cut drastically. Further, subject
to
evidence to the contrary, the father is likely to have
his own income and will not be considered as
a
dependant and the mother alone will be considered as
a dependant. In the absence of
evidence to the
contrary, brothers and sisters will not be considered as
dependants, because
they will either be independent
and earning, or married, or be dependent on the
father.

32. Thus even if the deceased is survived by parents

and siblings, only the mother would be
considered to
be a dependant, and 50% would be treated as the
personal and living expenses of
the bachelor and 50%
as the contribution to the family. However, where the
family of the
bachelor is large and dependent on the
income of the deceased, as in a case where he has a
widowed mother and large number of younger non-earning
sisters or brothers, his personal and
living
expenses may be restricted to one-third and
contribution to the family will be taken as two-
third."

40 In Reshma Kumari, the three-Judge Bench agreed with the

multiplier determined in Sarla Verma
and eventually held that
the advantage of the Table prepared in Sarla Verma is that
uniformity and
consistency in selection of multiplier can be
achieved. It has observed:-

"35. ... The assessment of extent of dependency

depends on examination of the unique situation
of the
individual case. Valuing the dependency or the
multiplicand is to some extent an
arithmetical
exercise. The multiplicand is normally based on the
net annual value of the
dependency on the date of the
deceased's death. Once the net annual loss
(multiplicand) is
assessed, taking into account the age
of the deceased, such amount is to be multiplied by a
"multiplier" to arrive at the loss of dependency."

41 In Reshma Kumari, the three-Judge Bench, reproduced

paragraphs 30, 31 and 32 of Sarla Verma
and approved the
same by stating thus:-

"41. The above does provide guidance for the

appropriate deduction for personal and living
expenses. One must bear in mind that the proportion
of a man's net earnings that he saves or
spends
exclusively for the maintenance of others does not
form part of his living expenses but
what he spends
exclusively on himself does. The percentage of
deduction on account of
personal and living expenses
may vary with reference to the number of dependent
members in
the family and the personal living
expenses of the deceased need not exactly correspond
to the
number of dependants.

42. In our view, the standards fixed by this Court in

Sarla Verma on the aspect of deduction for
personal
living expenses in paras 30, 31 and 32 must ordinarily
be followed unless a case for
departure in the
circumstances noted in the preceding paragraph is
made out."

42 The conclusions that have been summed up in Reshma

Kumari are as follows:-

"43.1. In the applications for compensation made

under Section 166 of the 1988 Act in death
cases
where the age of the deceased is 15 years and above,
the Claims Tribunals shall select
the multiplier as
indicated in Column (4) of the Table prepared in Sarla
Verma read with para 42
of that judgment.
 43.2. In cases where the age of the deceased is up to
15 years, irrespective of Section 166 or
Section 163-A
under which the claim for compensation has been
made, multiplier of 15 and the
assessment as
indicated in the Second Schedule subject to correction
as pointed out in Column
(6) of the Table in Sarla
Verma should be followed.

43.3. As a result of the above, while considering the

claim applications made under Section 166
in death
cases where the age of the deceased is above 15 years,
there is no necessity for the
Claims Tribunals to seek
guidance or for placing reliance on the Second
Schedule in the 1988
Act.

43.4. The Claims Tribunals shall follow the steps and

guidelines stated in para 19 of Sarla Verma
for
determination of compensation in cases of death.

43.5. While making addition to income for future

prospects, the Tribunals shall follow para 24 of
the
judgment in Sarla Verma.

43.6. Insofar as deduction for personal and living

expenses is concerned, it is directed that the
Tribunals
shall ordinarily follow the standards prescribed in
paras 30, 31 and 32 of the judgment
in Sarla Verma
subject to the observations made by us in para 41
above."

43 On a perusal of the analysis made in Sarla Verma which has

been reconsidered in Reshma Kumari,
we think it appropriate to
state that as far as the guidance provided for appropriate
deduction for
personal and living expenses is concerned, the
tribunals and courts should be guided by conclusion
43.6 of
Reshma Kumari. We concur with the same as we have no
hesitation in approving the method
provided therein.

44 As far as the multiplier is concerned, the claims tribunal

and the Courts shall be guided by Step 2
that finds place in
paragraph 19 of Sarla Verma read with paragraph 42 of the said
judgment. For the
sake of completeness, paragraph 42 is
extracted below :-

"42. We therefore hold that the multiplier to be used

should be as mentioned in Column (4) of the
table
above (prepared by applying Susamma Thomas,
Trilok Chandra and Charlie), which starts
with an
operative multiplier of 18 (for the age groups of 15
to 20 and 21 to 25 years), reduced by
one unit for
every five years, that is M-17 for 26 to 30 years, M-
16 for 31 to 35 years, M-15 for 36
to 40 years, M-14
for 41 to 45 years, and M-13 for 46 to 50 years,
then reduced by two units for
every five years, that
is, M-11 for 51 to 55 years, M-9 for 56 to 60 years,
M-7 for 61 to 65 years
and M-5 for 66 to 70 years."

45 In Reshma Kumari, the aforesaid has been approved by

stating, thus:-

"It is high time that we move to a standard method

of selection of multiplier, income for future
prospects and deduction for personal and living
expenses. The courts in some of the overseas
jurisdictions have made this advance. It is for these
reasons, we think we must approve the
Table in
Sarla Verma for the selection of multiplier in claim
applications made under Section 166
in the cases of
death. We do accordingly. If for the selection of
multiplier, Column (4) of the
Table in Sarla Verma is
followed, there is no likelihood of the claimants who
have chosen to
apply under Section 166 being
awarded lesser amount on proof of negligence on
the part of the
driver of the motor vehicle than those
who prefer to apply under Section 163-A. As regards
the
cases where the age of the victim happens to be
up to 15 years, we are of the considered
opinion
that in such cases irrespective of Section 163-A or
Section 166 under which the claim
for
compensation has been made, multiplier of 15 and
the assessment as indicated in the
Second Schedule
subject to correction as pointed out in Column (6) of
the Table in Sarla Verma
should be followed. This is
to ensure that the claimants in such cases are not
awarded lesser
 amount when the application is
made under Section 166 of the 1988 Act. In all
other cases of
death where the application has been
made under Section 166, the multiplier as indicated
in
Column (4) of the Table in Sarla Verma should be
followed."

46 At this stage, we must immediately say that insofar as the

aforesaid multiplicand/multiplier is
concerned, it has to be
accepted on the basis of income established by the legal
representatives of
the deceased. Future prospects are to be
added to the sum on the percentage basis and "income"
means
actual income less than the tax paid. The multiplier has already
been fixed in Sarla Verma
which has been approved in Reshma
Kumari with which we concur.

47 In our considered opinion, if the same is followed, it shall

subserve the cause of justice and the
unnecessary contest before
the tribunals and the courts would be avoided.

48 Another aspect which has created confusion pertains to

grant of loss of estate, loss of consortium
and funeral expenses.
In Santosh Devi (supra), the two-Judge Bench followed the
traditional method
and granted Rs. 5,000/- for transportation of
the body, Rs. 10,000/- as funeral expenses and Rs.
10,000/- as
regards the loss of consortium. In Sarla Verma, the Court granted
Rs. 5,000/- under the
head of loss of estate, Rs. 5,000/- towards
funeral expenses and Rs. 10,000/- towards loss of
Consortium.
In Rajesh, the Court granted Rs. 1,00,000/- towards loss of
consortium and Rs. 25,000/-
towards funeral expenses. It also
granted Rs. 1,00,000/- towards loss of care and guidance for
minor
children. The Court enhanced the same on the principle
that a formula framed to achieve uniformity
and consistency on a
socio-economic issue has to be contrasted from a legal principle
and ought to
be periodically revisited as has been held in Santosh
Devi (supra). On the principle of revisit, it fixed
different amount
on conventional heads. What weighed with the Court is factum
of inflation and the
price index. It has also been moved by the
concept of loss of consortium. We are inclined to think so,
for
what it states in that regard. We quote:-

"17. ... In legal parlance, "consortium" is the right of

the spouse to the company, care, help,
comfort,
guidance, society, solace, affection and sexual
relations with his or her mate. That non-
pecuniary
head of damages has not been properly understood by
our courts. The loss of
companionship, love, care and
protection, etc., the spouse is entitled to get, has to be
compensated appropriately. The concept of non pecuniary
damage for loss of consortium is one
of the
major heads of award of compensation in other parts
of the world more particularly in the
United States of
America, Australia, etc. English courts have also
recognised the right of a
spouse to get compensation
even during the period of temporary disablement. By
loss of
consortium, the courts have made an attempt
to compensate the loss of spouse's affection,
comfort,
solace, companionship, society, assistance, protection,
care and sexual relations during
the future years.
Unlike the compensation awarded in other countries
and other jurisdictions,
since the legal heirs are
otherwise adequately compensated for the pecuniary
loss, it would not
be proper to award a major amount
under this head. Hence, we are of the view that it
would only
be just and reasonable that the courts
award at least rupees one lakh for loss of consortium."

49 Be it noted, Munna Lal Jain (supra) did not deal with the
same as the notice was confined to the
issue of application of
correct multiplier and deduction of the amount.

50 This aspect needs to be clarified and appositely stated. The

conventional sum has been provided
in the Second Schedule of
the Act. The said Schedule has been found to be defective as
stated by the
Court in Trilok Chandra (supra). Recently in
Puttamma and others v. K.L. Narayana Reddy and another,
(2013) 15 SCC 45
it has been reiterated by stating:-

"... we hold that the Second Schedule as was

enacted in 1994 has now become redundant,
irrational and unworkable due to changed scenario
including the present cost of living and
 current rate
of inflation and increased life expectancy."

51 As far as multiplier or multiplicand is concerned, the same

has been put to rest by the judgments
of this Court. Para 3 of
the Second Schedule also provides for General Damages in case
of death. It is
as follows:-

"3. General Damages (in case of death):

The following General Damages shall be payable in
addition to compensation outlined above:-

(i) Funeral expenses - Rs. 2,000/-

(ii) Loss of Consortium, if beneficiary is the

spouse - Rs. 5,000/-

(iii) Loss of Estate - Rs. 2,500/-

(iv) Medical Expenses - actual expenses incurred

before death supported by bills/vouchers but
not
exceeding - Rs. 15,000/-"

52 On a perusal of various decisions of this Court, it is

manifest that the Second Schedule has not
been followed starting
from the decision in Trilok Chandra (supra) and there has been
no amendment
to the same. The conventional damage amount
needs to be appositely determined. As we notice, in
different
cases different amounts have been granted. A sum of Rs.
1,00,000/- was granted towards
consortium in Rajesh. The
justification for grant of consortium, as we find from Rajesh, is
founded on
the observation as we have reproduced hereinbefore.

53 On the aforesaid basis, the Court has revisited the practice

of awarding compensation under
conventional heads.

54 As far as the conventional heads are concerned, we find it

difficult to agree with the view expressed
in Rajesh. It has granted
Rs. 25,000/- towards funeral expenses, Rs. 1,00,000/- loss of
consortium and
Rs. 1,00,000/- towards loss of care and guidance
for minor children. The head relating to loss of care
and minor
children does not exist. Though Rajesh refers to Santosh Devi,
it does not seem to follow
the same. The conventional and
traditional heads, needless to say, cannot be determined on
percentage basis because that would not be an acceptable
criterion. Unlike determination of income,
the said heads have to
be quantified. Any quantification must have a reasonable
foundation. There
can be no dispute over the fact that price
index, fall in bank interest, escalation of rates in many a field
have to be noticed. The court cannot remain oblivious to the
same. There has been a thumb rule in
this aspect. Otherwise,
there will be extreme difficulty in determination of the same and
unless the
thumb rule is applied, there will be immense variation
lacking any kind of consistency as a
consequence of which, the
orders passed by the tribunals and courts are likely to be
unguided.
Therefore, we think it seemly to fix reasonable sums.
It seems to us that reasonable figures on
conventional heads,
namely, loss of estate, loss of consortium and funeral expenses
should be Rs.
15,000/-, Rs. 40,000/- and Rs. 15,000/-
respectively. The principle of revisiting the said heads is an
acceptable principle. But the revisit should not be fact-centric or
quantum-centric. We think that it
would be condign that the
amount that we have quantified should be enhanced on
percentage basis in
every three years and the enhancement
should be at the rate of 10% in a span of three years. We are
disposed to hold so because that will bring in consistency in
respect of those heads.

55 Presently, we come to the issue of addition of future

prospects to determine the multiplicand.

56 In Santosh Devi the Court has not accepted as a principle

that a self-employed person remains on
a fixed salary throughout
his life. It has taken note of the rise in the cost of living which
affects
everyone without making any distinction between the rich
and the poor. Emphasis has been laid on
the extra efforts made
by this category of persons to generate additional income. That
apart, judicial
notice has been taken of the fact that the salaries
of those who are employed in private sectors also
with the
passage of time increase manifold. In Rajesh's case, the Court
had added 15% in the case
where the victim is between the age
group of 15 to 60 years so as to make the compensation just,
equitable, fair and reasonable. This addition has been made in
respect of self-employed or engaged
on fixed wages.

57 Section 168 of the Act deals with the concept of "just

compensation" and the same has to be
determined on the
foundation of fairness, reasonableness and equitability on
acceptable legal
standard because such determination can never
be in arithmetical exactitude. It can never be perfect.
The aim is
to achieve an acceptable degree of proximity to arithmetical
precision on the basis of
materials brought on record in an
individual case. The conception of "just compensation" has to be
viewed through the prism of fairness, reasonableness and non-violation
of the principle of equitability.
In a case of death, the
legal heirs of the claimants cannot expect a windfall.
Simultaneously, the
compensation granted cannot be an apology
for compensation. It cannot be a pittance. Though the
discretion
vested in the tribunal is quite wide, yet it is obligatory on the part
of the tribunal to be guided
by the expression, that is, "just
compensation". The determination has to be on the foundation of
evidence brought on record as regards the age and income of the
deceased and thereafter the
apposite multiplier to be applied. The
formula relating to multiplier has been clearly stated in Sarla
Verma (supra) and it has been approved in Reshma Kumari
(supra). The age and income, as stated
earlier, have to be
established by adducing evidence. The tribunal and the Courts
have to bear in mind
that the basic principle lies in pragmatic
computation which is in proximity to reality. It is a well
accepted
norm that money cannot substitute a life lost but an effort has to
be made for grant of just
compensation having uniformity of
approach. There has to be a balance between the two extremes,
that is, a windfall and the pittance, a bonanza and the modicum.
In such an adjudication, the duty of
the tribunal and the Courts
is difficult and hence, an endeavour has been made by this Court
for
standardization which in its ambit includes addition of future
prospects on the proven income at
present. As far as future
prospects are concerned, there has been standardization keeping
in view the
principle of certainty, stability and consistency. We
approve the principle of "standardization" so that a
specific and
certain multiplicand is determined for applying the multiplier on
the basis of age.

58 The seminal issue is the fixation of future prospects

in cases of deceased who is self-employed or
on a fixed salary.
Sarla Verma (supra) has carved out an exception permitting the
claimants to bring
materials on record to get the benefit of
addition of future prospects. It has not, per se, allowed any
future
prospects in respect of the said category.

59 Having bestowed our anxious consideration, we are

disposed to think when we accept the principle
of
standardization, there is really no rationale not to apply the said
principle to the self-employed or a
person who is on a fixed
salary. To follow the doctrine of actual income at the time of
death and not to
add any amount with regard to future prospects
to the income for the purpose of determination of
multiplicand
would be unjust. The determination of income while computing
compensation has to
include future prospects so that the method
will come within the ambit and sweep of just
compensation as
postulated under Section 168 of the Act. In case of a deceased
who had held a
permanent job with inbuilt grant of annual
increment, there is an acceptable certainty. But to state that
the
legal representatives of a deceased who was on a fixed salary
would not be entitled to the benefit
of future prospects for the
purpose of computation of compensation would be inapposite. It
is
because the criterion of distinction between the two in that
event would be certainty on the one hand
and staticness on the
other. One may perceive that the comparative measure is
certainty on the one
hand and uncertainty on the other but such
a perception is fallacious. It is because the price rise does
affect
a self-employed person; and that apart there is always an
incessant effort to enhance one's
income for sustenance. The
purchasing capacity of a salaried person on permanent job when
increases because of grant of increments and pay revision or for
some other change in service
conditions, there is always a
competing attitude in the private sector to enhance the salary to
get
better efficiency from the employees. Similarly, a person who
is self-employed is bound to garner his
resources and raise his
charges/fees so that he can live with same facilities. To have the
perception
that he is likely to remain static and his income to
remain stagnant is contrary to the fundamental
concept of
human attitude which always intends to live with dynamism and
move and change with the
time. Though it may seem appropriate
that there cannot be certainty in addition of future prospects to
the existing income unlike in the case of a person having a
permanent job, yet the said perception
does not really deserve
acceptance. We are inclined to think that there can be some
degree of
difference as regards the percentage that is meant for or
applied to in respect of the legal
representatives who claim on
behalf of the deceased who had a permanent job than a person
who is
self-employed or on a fixed salary. But not to apply the
principle of standardization on the foundation
of perceived lack of
certainty would tantamount to remaining oblivious to the
marrows of ground
reality. And, therefore, degree-test is
imperative. Unless the degree-test is applied and left to the
parties to adduce evidence to establish, it would be unfair and
inequitable. The degree-test has to
have the inbuilt concept of
percentage. Taking into consideration the cumulative factors,
namely,
passage of time, the changing society, escalation of price,
the change in price index, the human
attitude to follow a
particular pattern of life, etc., an addition of 40% of the
established income of the
deceased towards future prospects and
where the deceased was below 40 years an addition of 25%
where
the deceased was between the age of 40 to 50 years would be
reasonable.

60 The controversy does not end here. The question still

remains whether there should be no addition
where the age of the
deceased is more than 50 years. Sarla Verma thinks it
appropriate not to add any
amount and the same has been
approved in Reshma Kumari. Judicial notice can be taken of the
fact
that salary does not remain the same. When a person is in a
permanent job, there is always an
enhancement due to one
reason or the other. To lay down as a thumb rule that there will
be no
addition after 50 years will be an unacceptable concept.
We are disposed to think, there should be an
addition of 15% if
the deceased is between the age of 50 to 60 years and there
should be no addition
thereafter. Similarly, in case of self-employed
or person on fixed salary, the addition should be 10%
between the age of 50 to 60 years. The aforesaid yardstick has
been fixed so that there can be
consistency in the approach by
the tribunals and the courts.

61 In view of the aforesaid analysis, we proceed to record our

conclusions:-

(i) The two-Judge Bench in Santosh Devi should have been well
advised to refer the matter to a
larger Bench as it was
taking a different view than what has been stated in Sarla
Verma, a
judgment by a coordinate Bench. It is because a
coordinate Bench of the same strength cannot
take a
contrary view than what has been held by another
coordinate Bench.

(ii) As Rajesh has not taken note of the decision in Reshma

Kumari, which was delivered at
earlier point of time, the
decision in Rajesh is not a binding precedent.

(iii) While determining the income, an addition of 50% of actual

salary to the income of the
deceased towards future
prospects, where the deceased had a permanent job and
was below
the age of 40 years, should be made. The
addition should be 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, the
addition should be 15%.
Actual salary should be read as actual salary less tax.

(iv) In case the deceased was self-employed or on a fixed salary,

an addition of 40% of the
established income should be the
warrant where the deceased was below the age of 40 years.
An addition of 25% where the deceased was between the age
of 40 to 50 years and 10% where
the deceased was between
the age of 50 to 60 years should be regarded as the
necessary
method of computation. The established income
means the income minus the tax component.
 (v) For determination of the multiplicand, the deduction for
personal and living expenses, the
tribunals and the courts
shall be guided by paragraphs 30 to 32 of Sarla Verma
which we have
reproduced hereinbefore.

(vi) The selection of multiplier shall be as indicated in the Table

in Sarla Verma read with
paragraph 42 of that judgment.

(vii) The age of the deceased should be the basis for applying the
multiplier.

(viii) Reasonable figures on conventional heads, namely, loss of

estate, loss of consortium and
funeral expenses should be
Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively.
The
aforesaid amounts should be enhanced at the rate of
10% in every three years.

62 The reference is answered accordingly. Matters be placed

before the appropriate Bench.
 2

2009 (0) AIJEL-SC 43621

SUPREME COURT OF INDIA

(DELHI HIGH COURT)

Hon'ble Judges:R.V.Raveendran and L.S.Panta JJ.

Sarla Verma Versus Delhi Transport Corporation

Civil Appeal No. 3483 of 2008 ; *J.Date :- APRIL 15, 2009

MOTOR VEHICLES ACT, 1988 Section - 163A , 166 , 168

Motor Vehicles Act, 1988 - S. 168 - motor accident - compensation - mode of calculation of
dependency loss - proper multiplier method - requirement as to considering future prospects -
whether the future prospects can be taken into account for determining the income of the deceased?
if so, whether pay revisions that occurred during the pendency of the claim proceedings or appeals
therefrom should be taken into account? - held, where deceased was self-employed or was on a
fixed salary (without provision for annual increments etc.), courts will usually take only the actual
income at the time of death - an addition of 50% of actual salary to the actual salary income of the
deceased towards future prospects, where the deceased had a permanent job and was below 40
years - considering the need for consistency multiplier method should be adopted by every Tribunal
while calculating compensation - future prospects of advancement of life required to be considered
though future pay revisions may not be considered.

Motor Vehicles Act, 1988 - S. 163A, 166, Schedule II - motor accident - compensation awarded by
Tribunal - deduction towards personal living expenses - whether deduction towards personal and
living expenses of deceased should be less than one-fourth? - held, where the deceased was
married, deduction towards personal and living expenses of the deceased, should be one-third
(1/3rd) where the number of dependent family members is 2 to 3, one-fourth (1/4th) where the
number of dependant family members exceed six - while considering deduction towards personal
living expenses 1/3 deduction permissible under Schedule II to the Act, 1988, number of
dependents, marital status of deceased are relevant factors - in case of large number of dependents,
unit method has to be adopted.

Motor Vehicles Act, 1988 - S. 166 - if claimants delay the proceedings they can rely upon revised
higher pay scales that may come into effect during such pendency - however, promptness cannot be
punished in this manner - therefore, revision in pay scale subsequent to death and before final
hearing cannot be taken into account for determining the income for calculating compensation -
personal and living expenses determined - enhancement of compensation and interest thereon
allowed - enhanced compensation awarded to be taken by the widow exclusively - appeal partly
allowed.

Imp.Para: [ 8 ] [ 9 ] [ 10 ] [ 12 ] [ 13 ] [ 14 ] [ 15 ] [ 18 ] [ 21 ] [ 24 ] [ 25 ]
Cases Referred To :

1. Davies V/s. Powell Duffryn Associated Collieries Ltd., 1942 0 AC 601

2. Nance V/s. British Columbia Electric Rly. Co. Ltd., 1951 0 AC 601

Cases Relied on :

1. Abati Bezbaruah V/s. Dy. Director General, Geological Survey Of India, 2003 3 SCC 148 : 2003
AIR SC 1817 : 2003 (2) Scale 120 : 2003 (1) SCR 1229 : JT 2003 (5) 205
2. Fakeerappa V/s. Karnataka Cement Pipe Factory, 2004 2 SCC 473 : 2004 (2) Scale 428 : 2004 (2)
SCR 369 : JT 2004 (2) 432 : 2004 AIR SCW 7475
3. General Manager, Kerala State Road Transport Corporation V/s. Susamma Thomas, 1994 2 SCC
176 : 1994 AIR SC 1631 : 1993 (4) Scale 643 : JT 1993 (Supp) 573 : 1994 AIR SCW 1356
4. New India Assurance Co. Ltd. V/s. Charlie, 2005 10 SCC 720 : 2005 AIR SC 2157 : 2005 (3) Scale
541 : 2005 (2) SCR 1173 : JT 2005 (11) 264
5. Oriental Insurance Co. Ltd. V/s. Meena Variyal, 2007 5 SCC 428 : 2007 AIR SC 1609 : 2007 (5)
Scale 269 : 2007 (4) SCR 641 : JT 2007 (5) 65
6. Sarla Dixit V/s. Balwant Yadav, 1996 3 SCC 179 : 1996 AIR SC 1274 : 1996 (2) Scale 802 : 1996
(3) SCR 30 : JT 1996 (3) 252
7. Tn State Road Transport Corporation Ltd. V/s. Rajapriya, 2005 6 SCC 236 : 2005 AIR SC 2985 :
2005 (4) Scale 336 : 2005 (3) SCR 737 : JT 2005 (4) 531
8. Up State Road Transport Corporation V/s. Krishna Bala, 2006 6 SCC 249 : 2006 AIR SC 2688 :
2006 (7) Scale 92 : 2006 (Supp4) SCR 506 : JT 2006 (6) 327
9. Up State Road Transport Corporation V/s. Trilok Chandra, 1996 4 SCC 362 : 1996 (4) Scale 522 :
1996 (Supp2) SCR 443 : JT 1996 (5) 356 : 1996 (4) Supreme 479

Cited in :

1. (Referred To) :- Rajan Vs. Soly Sebastian, 2015 (10) SCC 506 : 2015 (8) Scale 290 : JT 2015 (9)
SC 78 : 2015 AIR SCW 5352 : 2016 (1) SCC(Cri) 46 : 2015 (1) SCC(L&S) 114 : 2015 (3)
ApexCJ(SC) 259 : 2015 (3) RCR(Civ) 962 : 2015 (5) AWC 4894 : 2015 (4) RecApexJ 311 : 2015
(4) LawHerald(SC) 2929 : 2015 (6) AllMR(SC) 467 : 2016 (1) CivLJ 572 : 2016 (2) WBLR 32 :
2016 (1) RLR 236 : 2016 (1) ACC 438 : 2015 ACJ 2418 : 2016 (2) TAC 58 : 2015 (3) LAR 493 :
2015 (2) TNMAC 211 : 2015 (2) AICJ 198 : 2015 AAC 2790 : 2015 AIJEL_SC 57193
2. (Relied on) :- Govind Yadav Vs. New India Insurance Company Limited, 2011 (10) SCC 683 : 2011
(2) Scale 336 : JT 2011 (13) SC 40 : 2012 (1) SCC(Cri) 82 : 2012 (1) UJ 33 : 2012 (1) SCC(L&S)
422 : 2011 (4) RCR(Civ) 817 : 2012 (Supp1) AWC 204 : 2011 (5) RecApexJ 594 : 2012 (3) MLJ
719 : 2012 (2) PLJR(SC) 142 : 2012 (1) BBCJ(SC) 330 : 2011 DNJ(SC) 1114 : 2012 (1) JLJR(SC)
617 : 2012 (3) CivLJ 437 : 2012 (1) RajLW 9 : 2012 (1) PLR 705 : 2012 (1) CTC 437 : 2012 (1)
WBLR 185 : 2012 (30) LCD 1663 : 2012 (2) ACC 519 : 2011 (4) ACC 668 : 2012 ACJ 28 : 2012 (1)
TAC 1 : 2012 (2) CLT(SC) 626 : 2012 (1) KerLJ 303 : 2012 (1) UAD 138 : 2011 (2) TNMAC 661 :
2011 (4) CPJ(SC) 111 : 2012 (1) CPC(SC) 155 : 2012 (1) AICJ 375 : 2012 (1) KLJ 303 : 2011 (2)
UD 602 : 2011 JX(SC) 768 : 2011 AIJEL_SC 50670
3. (Referred To) :- Puttamma Vs. K.L.Narayana Reddy, 2013 (15) SCC 45 : AIR 2014 SC 706 : 2013
(15) Scale 437 : JT 2014 (2) SC 201 : 2014 AIR SCW 165 : 2013 (8) Supreme 795 : 2014 (3)
SCC(Cri) 574 : 2014 (2) ApexCJ(SC) 614 : 2014 (1) RCR(Civ) 443 : 2014 (3) AWC 2245 : 2014 (1)
RecApexJ 1 : 2014 (1) MLJ 739 : 2014 (1) KerLT 738 : 2014 (2) CIVLJ 532 : 2014 (1) RajLW 244 :
2014 (3) WBLR 405 : AIR 2014 SC 580 : 2014 AllSCR 1775 : AIRKarR 2014 658 : 2014 (2) KCCR
104 : 2014 (1) ACC 3 : 2014 ACJ 526 : 2014 (1) TAC 926 : 2014 (1) KerLJ 777 : 2014 (1) TNMAC
481 : 2014 (1) AICJ 321 : 2014 AAC 449 : 2013 JX(SC) 842 : 2013 AIJEL_SC 54764
 4. (Referred To) :- Bhogireddi Varalakshmi Vs. Mani Muthupandi, 2017 JX(SC) 791 : 2017 AIJEL_SC
61432
5. (Referred To) :- Laxmidhar Nayak Vs. Jugal Kishore Behera, 2017 (13) Scale 718 : JT 2017 (11)
SC 450 : 2017 DNJ(SC) 1077 : 2017 (4) ACC 707 : 2017 JX(SC) 764 : 2017 AIJEL_SC 61296
6. (Relied on) :- Sanjay Batham Vs. Munnalal Parihar, 2011 (10) SCC 665 : AIR 2012 SC 459 : 2011
(2) Scale 328 : JT 2011 (13) SC 32 : 2012 AIR SCW 93 : 2011 (7) Supreme 459 : 2012 (1)
SCC(Cri) 64 : 2011 (4) RCR(Civ) 937 : 2012 (Supp1) AWC 196 : 2011 (6) RecApexJ 146 : 2012 (1)
BBCJ(SC) 313 : 2012 (1) LawHerald(SC) 356 : 2011 DNJ(SC) 1122 : 2012 (3) CivLJ 120 : 2012
(1) WBLR 218 : 2012 (2) MhLJ 489 : 2012 (2) ALD(SC) 153 : 2012 (2) MPLJ 4 : AIR 2012 SC 236 :
2011 (4) ACC 725 : 2011 ACJ 2869 : 2012 (1) TAC 12 : 2012 (1) UAD 19 : 2011 (2) TNMAC 651 :
2012 (1) CPR(SC) 416 : 2012 (1) AICJ 394 : 2012 AAC 398 : 2011 JX(SC) 767 : 2011 AIJEL_SC
50669
7. (Referred To) :- Municipal Corporation Of Delhi Vs. Association Of Victims Of Uphaar Tragedy,
2011 (14) SCC 481 : AIR 2012 SC 100 : 2011 (12) Scale 194 : 2011 (16) SCR 1 : JT 2011 (12) SC
192 : 2011 AIR SCW 6418 : 2011 (7) Supreme 179 : 2013 (2) SCC(Cri) 555 : 2013 (1) SCC(L&S)
305 : 2011 (7) SLT 757 : 2012 (3) RCR(Civ) 203 : 2012 (2) AWC 1731 : 2012 (3) RecApexJ 92 :
2011 (8) MLJ 513 : 2012 DNJ(SC) 95 : 2012 (1) PLR 672 : 2012 (1) WBLR 321 : AIR 2012 SC 17 :
2011 (4) ACC 382 : 2012 ACJ 48 : 2012 (1) TAC 31 : 2012 (2) CLT(SC) 137 : 2012 (1) LW 593 :
2011 (4) CPJ(SC) 74 : 2012 AAC 298 : 2011 JX(SC) 759 : 2011 AIJEL_SC 50499
8. (Referred To) :- Raman Vs. Uttar Haryana Bijli Vitran Nigam Limited, 2014 (15) SCC 1 : 2014 (14)
Scale 354 : JT 2014 (14) SC 286 : 2015 AIR SCW 360 : 2015 (1) Supreme 687 : 2016 (1) SCC(Cri)
827 : 2015 (147) AIC 196 : 2015 (1) ApexCJ(SC) 690 : 2015 (1) RCR(Civ) 353 : 2015 (1) AWC 656
: 2015 (1) RecApexJ 43 : 2015 (109) ALR 230 : 2015 (1) PLJR(SC) 399 : 2015 (1) BBCJ(SC) 17 :
2015 (1) LawHerald(SC) 705 : 2014 (5) LawHerald(SC) 4274 : 2015 (2) CivCC 481 : 2015 (1)
JCR(SC) 401 : 2015 DNJ(SC) 328 : 2015 (1) JLJR(SC) 295 : 2015 (1) AllMR(SC) 896 : 2015 (2)
ALD(SC) 135 : 2015 (4) SCC(Civ) 129 : AIR 2015 SC 739 : 2015 (1) JBCJ(SC) 288 : 2015 (Supp2)
CutLT(Cri) 506 : 2015 (1) PLJ 91 : 2015 (1) WLN 100 : 2015 (1) ACC 88 : 2015 ACJ 484 : ILR
2015 Kar 315 : 2015 (1) LAR 13 : 2015 (1) CPR(SC) 4 : 2015 (1) CPR(SC) 664 : 2015 AAC 507 :
2014 JX(SC) 781 : 2014 AIJEL_SC 56046
9. (Referred To) :- Sheela Hirba Naik Gaunekar Vs. Apollo Hospitals Limited, 2016 (10) Scale 18 :
2016 (3) ApexCJ(SC) 696 : 2016 (4) RCR(Civ) 879 : 2016 (6) RecApexJ 62 : 2016 (4)
LawHerald(SC) 3072 : 2017 (1) CivCC 115 : 2017 (1) ICC 765 : 2017 (1) CPJ(SC) 1 : 2017 (1)
CPR(SC) 297 : 2016 AIJEL_SC 59737
10. (Referred To) :- Kanhsingh Vs. Tukaram, 2015 (11) SCC 343 : 2015 (1) Scale 366 : JT 2015 (1) SC
319 : 2015 AIR SCW 804 : 2015 (7) Supreme 637 : 2015 (148) AIC 154 : 2015 (1) ApexCJ(SC)
305 : 2015 (1) RCR(Civ) 613 : 2015 (1) AWC 973 : 2015 (1) RecApexJ 300 : 2015 (109) ALR 710 :
2015 (1) BBCJ(SC) 385 : 2015 (1) LawHerald(SC) 220 : 2015 (1) LawHerald(SC) 102 : 2015 (2)
JCR(SC) 27 : 2015 DNJ(SC) 154 : 2015 (2) RajLW 1572 : 2016 (1) WBLR 426 : 2015 (119)
CutLT(SC) 622 : 2015 (4) SCC(Civ) 763 : AIR 2015 SC 1670 : 2015 AllSCR 773 : 2015 (1) AndhWR
454 : 2015 (2) JBCJ(SC) 122 : 2015 (1) WLN 28 : 2017 (2) ACC 615 : 2015 ACJ 594 : 2015 (1)
TAC 337 : 2015 (2) TAC 689 : 2015 (1) LAR 415 : 2015 (1) TNMAC 1 : 2015 (2) AICJ 12 : 2015
JX(SC) 96 : 2015 AIJEL_SC 56184
11. (Relied on) :- Kishan Gopal Vs. Lala, 2014 (1) SCC 244 : AIR 2014 SC 173 : 2013 (10) Scale 580 :
2013 (10) SCR 793 : JT 2013 (11) SC 563 : 2013 AIR SCW 5037 : 2014 (1) SCC(Cri) 241 : 2013
(131) AIC 219 : 2013 (3) ApexCJ(SC) 244 : 2013 (4) RCR(Civ) 276 : 2013 (5) RecApexJ 222 :
2013 (101) ALR 281 : 2013 (9) AD(SC) 193 : 2013 (5) LawHerald(SC) 4346 : 2013 (4) CivCC 334 :
2013 (3) DNJ(SC) 718 : 2013 (5) AllMR(SC) 899 : 2013 (5) BCR 499 : 2014 (1) PLR 276 : 2013 (5)
CTC 212 : 2014 (2) WBLR 77 : 2014 (3) MhLJ 560 : 2013 (6) ALD(SC) 59 : 2014 (2) MPLJ 569 :
AIR 2013 SC 2465 : 2014 (1) AndhWR 58 : 2013 (3) ACC 878 : 2013 ACJ 2594 : 2013 (4) TAC 5 :
2013 (5) LW 205 : 2013 (2) UAD 370 : 2013 (2) TNMAC 358 : 2015 (2) MPHT 61 : 2013 (4)
CPR(SC) 607 : 2013 AAC 3005 : 2013 JX(SC) 524 : 2013 AIJEL_SC 54344
12. (Referred To) :- Saraladevi Vs. Divisional Manager, M/s Royal Sundaram Alliance Insurance
Company Limited, 2014 (15) SCC 450 : 2014 (9) Scale 431 : 2014 AIR SCW 4993 : 2014 (142)
AIC 91 : 2014 (3) ApexCJ(SC) 327 : 2014 (4) RCR(Civ) 194 : 2014 (5) RecApexJ 61 : 2014 (106)
ALR 906 : 2014 (3) LawHerald(SC) 2504 : 2014 (4) LawHerald(SC) 3260 : 2014 (4) JCR(SC) 187 :
2014 DNJ(SC) 948 : AIRJharHCR 2014 628 : 2014 (6) ALD(SC) 152 : 2014 (3) ACC 898 : 2014
ACJ 2391 : 2014 (4) TAC 343 : 2014 (2) TNMAC 546 : 2014 (4) AICJ 111 : 2014 AAC 2641 : 2014
AIJEL_SC 55819
13. (Referred To) :- R.Venkata Ramana Vs. United India Insurance Company Limited, 2013 (10) SCC
673 : AIR 2014 SC 232 : 2013 (11) Scale 555 : 2013 (9) SCR 451 : JT 2013 (12) SC 473 : 2013 AIR
SCW 6267 : 2013 (7) Supreme 30 : 2014 (1) SCC(Cri) 374 : 2013 (132) AIC 90 : 2014 (2)
SCC(L&S) 717 : 2013 (3) ApexCJ(SC) 287 : 2013 (4) RCR(Civ) 426 : 2013 (5) AWC 4930 : 2013
(5) RecApexJ 332 : 2013 (101) ALR 727 : 2013 (10) AD(SC) 241 : 2013 (6) LawHerald(SC) 4595 :
2014 (1) LawHerald(SC) 184 : 2013 (4) JCR(SC) 295 : 2013 (4) JLJR(SC) 498 : 2013 (6)
AllMR(SC) 394 : 2014 (2) CivLJ 842 : AIRJharHCR 2014 170 : 2013 (4) PLR 718 : 2014 (4) WBLR
600 : 2014 (2) WBLR 1 : 2014 (2) MhLJ 454 : 2014 (1) ALD(SC) 10 : 2014 (1) MPLJ 507 : AIR
2014 SC 563 : 2014 (1) RLR 230 : 2014 (Supp) CutLT(Cri) 272 : 2013 (3) ACC 893 : 2013 ACJ
2641 : 2013 (4) TAC 376 : 2013 (3) MPWN 218 : 2013 (2) TNMAC 505 : 2014 AAC 94 : 2013
JX(SC) 601 : 2013 AIJEL_SC 54451
14. (Referred To) :- Sanjay Kumar Vs. Ashok Kumar, 2014 (5) SCC 330 : 2014 (1) Scale 584 : JT 2014
(3) SC 237 : 2014 AIR SCW 1236 : 2014 (2) SCC(Cri) 550 : 2014 (137) AIC 134 : 2014 (1)
ApexCJ(SC) 434 : 2014 (1) RCR(Civ) 875 : 2014 (1) RecApexJ 537 : 2014 (104) ALR 236 : 2014
(1) BBCJ(SC) 273 : 2014 (2) LawHerald(SC) 1120 : 2014 (1) LawHerald(SC) 264 : 2014 (1) CivCC
747 : 2014 (2) JCR(SC) 35 : 2014 DNJ(SC) 106 : 2014 (2) CivLJ 242 : 2014 (2) BLJud 19 : 2014
(2) PLR 335 : 2014 (2) WBLR 133 : AIR 2014 SC 913 : 2014 AllSCR 1508 : 2014 (2) RLR 368 :
2014 (1) JBCJ(SC) 527 : 2014 (Supp2) CutLT(Cri) 12 : 2014 (32) LCD 1761 : 2014 (1) ACC 372 :
2014 ACJ 653 : 2014 (1) TAC 727 : 2014 (1) TNMAC 473 : 2014 (1) AICJ 531 : 2014 AAC 938 :
2014 (3) ADR 347 : 2014 (1) CGLRW 81 : 2014 JX(SC) 47 : 2014 AIJEL_SC 54845
15. (Referred To) :- Ranjana Prakash Vs. Divisional Manager, 2011 (14) SCC 639 : 2011 (8) Scale 240
: 2011 (9) SCR 616 : 2012 AIR SCW 848 : 2011 (5) Supreme 382 : 2013 (3) SCC(Cri) 717 : 2011
(4) RCR(Civ) 218 : 2011 (Supp5) AWC 5136 : 2011 (4) RecApexJ 605 : 2011 (4) JCR(SC) 163 :
2011 DNJ(SC) 1163 : 2013 (2) WBLR 517 : 2012 (3) ALD(SC) 112 : 2012 (Supp) CutLT(SC) 506 :
2011 (2) AndhWR 785 : 2011 (2) OrissaLR 629 : 2011 (3) ACC 592 : 2011 ACJ 2418 : 2011 (4)
TAC 11 : 2012 (Supp) CLT(SC) 506 : 2011 (2) TNMAC 313 : 2011 (4) AICJ 590 : 2011 JX(SC) 534
: 2011 AIJEL_SC 50204
16. (Referred To) :- National Insurance Company Limited Vs. Pranay Sethi, AIR 2017 SC 5157 : 2017
(13) Scale 12 : JT 2017 (10) SC 450 : 2017 (8) Supreme 107 : 2017 (180) AIC 45 : 2017 (4)
RCR(Civ) 1009 : 2017 (6) RecApexJ 143 : 2017 (125) ALR 856 : 2017 (4) PLJR(SC) 261 : 2017 (4)
LawHerald(SC) 2970 : 2017 DNJ(SC) 983 : 2017 (4) KerLT 662 : 2017 (4) JLJR(SC) 275 : 2017 (4)
BLJud 202 : 2017 (6) BCR 791 : 2017 (4) PLR 693 : 2017 (6) CTC 493 : 2017 (6) ALD(SC) 170 :
2017 (6) ALT(SC) 60 : 2017 (3) GLH 536 : 2017 (4) JBCJ(SC) 388 : 2017 (4) ACC 460 : 2017 ACJ
2700 : 2017 (4) TAC 673 : 2017 (4) KerLJ 627 : 2017 (2) TNMAC 609 : ILR 2017 Ker 513 : 2017
AAC 2436 : 2017 JX(SC) 708 : 2017 AIJEL_SC 61069
17. (Referred To) :- Urmila Vs. Rashpal Kaur, 2011 (15) SCC 291 : 2011 (8) Scale 406 : JT 2011 (8)
SC 603 : 2011 AIR SCW 6393 : 2011 (5) Supreme 616 : 2011 (105) AIC 62 : 2011 (4) RCR(Civ)
216 : 2011 (Supp5) AWC 5121 : 2011 (5) RecApexJ 1 : 2011 (88) ALR 475 : 2012 (1) WLC 92 :
2011 (4) CivCC 644 : 2011 (4) JCR(SC) 145 : 2011 DNJ(SC) 881 : AIR 2012 SC 106 : 2011 (29)
LCD 1824 : 2011 (3) ACC 692 : 2011 ACJ 2444 : 2011 (4) TAC 8 : 2011 (2) TNMAC 187 : 2011 (4)
AICJ 588 : 2012 AAC 352 : 2011 AIJEL_SC 50354
18. (Referred To) :- Josphine James Vs. United India Insurance Company Limited, 2013 (16) SCC
711 : AIR 2014 SC 1511 : 2013 (10) Scale 340 : 2013 AIR SCW 6633 : 2013 (130) AIC 144 : 2013
(3) ApexCJ(SC) 268 : 2013 (5) AWC 5048 : 2013 (5) RecApexJ 215 : 2013 (100) ALR 730 : 2013
 (5) LawHerald(SC) 4015 : 2013 (3) DNJ(SC) 747 : 2013 (4) RajLW 3052 : 2013 (5) CTC 681 : 2014
(2) WBLR 373 : 2014 (1) ALD(SC) 111 : 2013 (3) ACC 654 : 2013 ACJ 2418 : 2013 (4) TAC 22 :
2013 (2) UAD 511 : 2013 (139) DRJ 24 : 2013 (2) TNMAC 350 : 2014 (1) AICJ 317 : 2014 AAC
229 : 2014 (1) ADR 700 : 2013 JX(SC) 591 : 2013 AIJEL_SC 54441
19. (Referred To) :- Minu Rout Vs. Satya Pradyumna Mohapatra, 2013 (10) SCC 695 : 2013 (11) Scale
112 : 2013 (10) SCR 847 : JT 2013 (12) SC 254 : 2013 AIR SCW 5375 : 2013 (6) Supreme 315 :
2014 (1) SCC(Cri) 384 : 2013 (130) AIC 17 : 2013 (3) ApexCJ(SC) 347 : 2013 (4) RCR(Civ) 871 :
2013 (6) RecApexJ 75 : 2013 (101) ALR 229 : 2014 (1) LawHerald(SC) 293 : 2013 (4) JCR(SC)
351 : 2014 (2) WBLR 19 : 2014 (2) MhLJ 534 : 2013 (6) ALD(SC) 115 : 2014 (2) MPLJ 129 : 2014
(117) CutLT(SC) 256 : AIR 2014 SC 116 : 2014 (1) RLR 166 : 2013 (2) OrissaLR 811 : 2013 (31)
LCD 2022 : 2013 ACJ 2544 : 2013 (4) TAC 840 : 2013 (2) UAD 722 : 2013 (2) TNMAC 385 : 2013
AAC 3091 : 2014 (1) GoaLR 156 : 2013 JX(SC) 569 : 2013 AIJEL_SC 54396
20. (Referred To) :- Kumari Kiran Thr.Her Father Harinarayan Vs. Sajjan Singh, 2015 (1) SCC 539 :
2014 (10) Scale 462 : JT 2014 (11) SC 279 : 2014 AIR SCW 6328 : 2015 (1) SCC(Cri) 737 : 2014
(144) AIC 169 : 2014 (4) RCR(Civ) 362 : 2014 (5) RecApexJ 296 : 2014 (107) ALR 669 : 2014 (4)
LawHerald(SC) 3037 : 2015 (1) JCR(SC) 154 : 2014 DNJ(SC) 1038 : 2015 (3) CivLJ 1 :
AIRJharHCR 2015 678 : 2015 (3) MhLJ 626 : 2015 (1) ALD(SC) 105 : 2015 (2) MPLJ 662 : 2015
(1) SCC(Civ) 570 : AIR 2015 SC 99 : 2014 (4) ACC 197 : 2014 ACJ 2550 : 2014 (4) TAC 684 : 2015
(1) LAR 620 : 2014 (2) TNMAC 553 : 2014 (4) AICJ 121 : 2015 AAC 34 : 2014 JX(SC) 585 : 2014
AIJEL_SC 55731
21. (Referred To) :- Ashvinbhai Jayantilal Modi Vs. Ramkaran Ramchandra Sharma, 2015 (2) SCC
180 : 2014 (11) Scale 427 : 2014 AIR SCW 6507 : 2014 (8) Supreme 60 : 2015 (1) SCC(Cri) 855 :
2015 (1) ApexCJ(SC) 101 : 2014 (4) RCR(Civ) 543 : 2014 (5) RecApexJ 542 : 2014 (5)
LawHerald(SC) 4549 : 2014 (5) LawHerald(SC) 3552 : 2015 (2) DNJ(SC) 561 : 2014 DNJ(SC) 882
: 2015 (3) CivLJ 114 : AIRJharHCR 2015 145 : 2015 (2) WBLR 16 : 2015 (4) MhLJ 36 : 2015 (1)
ALD(SC) 131 : 2015 (1) SCC(Civ) 792 : AIR 2015 SC 265 : 2015 (3) RLR 131 : 2015 (2) GLR 1175 :
2014 (4) WLN 176 : 2014 ACJ 2648 : 2014 (4) TAC 679 : 2015 (1) LAR 98 : 2015 (1) TNMAC 52 :
2014 (4) AICJ 78 : 2015 AAC 78 : 2014 (3) GLH(NOC) 2 : 2014 JX(SC) 598 : 2014 AIJEL_SC
55751
22. (Referred To) :- Sanjay Verma Vs. Haryana Roadways, 2014 (3) SCC 210 : AIR 2014 SC 995 :
2014 (1) Scale 682 : 2014 (1) SCR 924 : JT 2014 (2) SC 384 : 2014 AIR SCW 856 : 2014 (2)
SCC(Cri) 149 : 2014 (135) AIC 123 : 2014 (1) ApexCJ(SC) 451 : 2014 (1) RCR(Civ) 914 : 2014 (2)
AWC 1907 : 2014 (1) RecApexJ 610 : 2014 (103) ALR 204 : 2014 (1) BBCJ(SC) 438 : 2014 (2)
LawHerald(SC) 1098 : 2014 (1) LawHerald(SC) 719 : 2014 (2) CivCC 412 : 2014 (2) JCR(SC) 193
: 2014 DNJ(SC) 117 : 2014 (2) BLJud 3 : 2015 (1) RajLW 325 : 2014 (2) PLR 641 : 2014 (1) CTC
745 : 2014 (3) WBLR 116 : 2014 (118) CutLT(SC) 423 : AIR 2014 SC 830 : 2014 AllSCR 1503 :
2014 (2) JBCJ(SC) 184 : 2014 (1) OrissaLR 851 : 2014 (1) ACC 473 : 2014 ACJ 692 : 2014 (1)
TAC 711 : 2014 (1) TNMAC 279 : 2014 (1) ShimLC 388 : 2014 (1) AICJ 540 : 2014 AAC 807 :
2014 JX(SC) 66 : 2014 AIJEL_SC 54864
23. (Referred To) :- Shakti Devi Vs. New India Insurance Company Limited, 2010 (14) SCC 575 : 2010
(11) Scale 571 : 2010 (13) SCR 574 : JT 2010 (12) SC 106 : 2011 (3) SCC(Cri) 848 : 2010 (10) UJ
5374 : 2010 (96) AIC 60 : 2010 (4) RCR(Civ) 950 : 2010 (6) RecApexJ 321 : 2010 (83) ALR 884 :
2011 (1) PLJR(SC) 150 : 2011 (1) WLC 275 : 2011 (2) BBCJ(SC) 42 : 2011 (1) CivCC 319 : 2011
(1) JCR(SC) 1 : 2011 (1) JLJR(SC) 182 : 2011 (1) BLJud 81 : 2011 (1) PLR 645 : AIR 2011 SC 164
: 2011 (1) AndhWR 315 : 2011 (Supp) CutLT(Cri) 572 : 2010 (4) WLN 57 : 2010 (4) KerLT(SN) 71 :
2010 (4) ACC 523 : 2011 ACJ 15 : 2011 (1) TAC 4 : 2011 (1) LW 789 : 2010 (2) TNMAC 612 :
2010 (3) AICJ 199 : 2011 AAC 1860 : 2010 (2) UD 527 : 2011 (1) GoaLR 141 : 2010 JX(SC) 551 :
2010 AIJEL_SC 49092
24. (Referred To) :- Munna Lal Jain Vs. Vipin Kumar Sharma, 2015 (6) SCC 347 : 2015 (6) Scale 522 :
JT 2015 (5) SC 1 : 2015 AIR SCW 3105 : 2015 (7) Supreme 444 : 2015 (2) ApexCJ(SC) 472 :
2015 (3) RCR(Civ) 447 : 2015 (4) AWC 3845 : 2015 (3) RecApexJ 459 : 2015 (3) LawHerald(SC)
 2420 : 2015 (3) LawHerald(SC) 2526 : 2015 (3) JCR(SC) 68 : 2015 DNJ(SC) 589 : 2015 (4)
AllMR(SC) 436 : 2015 (4) CivLJ 401 : 2015 (3) RajLW 2021 : 2015 (4) BCR 72 : 2015 (3) PLR 304 :
2015 (4) WBLR 1 : 2015 (4) ALD(SC) 114 : 2015 (3) SCC(Civ) 315 : 2016 (1) AndhWR 877 : 2015
(2) CalLJ(SC) 185 : 2015 (2) WLN 113 : 2015 (2) ACC 806 : 2015 ACJ 1985 : 2015 (3) TAC 1 :
2015 (2) MPWN 145 : 2015 (3) LAR 198 : 2015 (3) ChhatLJ 93 : 2015 (1) TNMAC 814 : 2015 (2)
AICJ 142 : 2015 AAC 1834 : 2015 (4) ADR 303 : 2015 JX(SC) 431 : 2015 AIJEL_SC 56622
25. (Referred To) :- National Insurance Company Limited Vs. Shyam Singh, 2011 (7) SCC 65 : AIR
2011 SC 3231 : 2011 (6) Scale 723 : 2011 (7) SCR 810 : JT 2011 (7) SC 135 : 2011 AIR SCW
4126 : 2011 (5) Supreme 29 : 2011 (3) SCC(Cri) 28 : 2011 (5) SLT 313 : 2011 (3) RCR(Civ) 679 :
2011 (4) AWC 3942 : 2011 (4) RecApexJ 49 : 2011 (8) MLJ 551 : 2011 (3) PLJR(SC) 238 : 2011
(2) WLC 465 : 2011 (4) BBCJ(SC) 340 : 2011 (3) JCR(SC) 232 : 2011 DNJ(SC) 763 : 2011 (3)
JLJR(SC) 185 : 2011 (4) CivLJ 756 : 2011 (3) BLJud 174 : AIRJharHCR 2011 374 : 2011 (4) PLR
113 : 2011 (4) PLR 112 : 2011 (3) SCC(Civ) 529 : AIR 2011 SC 1871 : 2011 (2) AndhWR 546 :
2011 (3) JLJ 91 : 2011 (3) ACC 291 : 2011 ACJ 1990 : 2011 (3) TAC 625 : 2011 (2) TNMAC 317 :
2011 (3) AICJ 594 : 2011 (3) KLJ 13 : 2011 AAC 2410 : ILR 2011 MP 1803 : 2011 (2) GoaLR 426 :
2011 JX(SC) 447 : 2011 AIJEL_SC 50087
26. (Referred To) :- Jai Prakash Vs. National Insurance Company Limited, 2010 (2) SCC 607 : 2010
(1) Scale 8 : 2009 (16) SCR 710 : JT 2009 (15) SC 443 : 2010 (2) SCC(Cri) 1075 : 2010 (1)
ApexCJ(SC) 295 : 2010 (1) SLT 245 : 2010 (1) RCR(Civ) 635 : 2010 (Supp1) AWC 636 : 2010 (1)
RecApexJ 191 : 2010 (1) KerLT 774 : 2010 (2) AllMR(SC) 436 : 2010 (4) BCR 844 : 2010 (2) WBLR
627 : 2010 (2) ALT(SC) 1 : 2010 (1) SCC(Civ) 512 : 2010 (1) LRC 181 : 2010 (2) GLR 1787 : 2010
(1) AndhWR 216 : 2010 (3) KCCR 1906 : 2010 (1) ACC 1 : 2010 ACJ 455 : 2010 (2) TAC 385 :
2010 (1) TNMAC 696 : 2010 (1) KHC 401 : 2010 (3) MPHT 326 : 2010 (3) AICJ 678 : 2010 (1)
AICJ 178 : 2009 AIJEL_SC 48004
27. (Referred To) :- Vimal Kanwar Vs. Kishore Dan, 2013 (7) SCC 476 : AIR 2013 SC 3830 : 2013 (6)
Scale 705 : 2013 (3) SCR 223 : JT 2013 (8) SC 234 : 2013 AIR SCW 3258 : 2013 (3) SCC(Cri) 583
: 2013 (127) AIC 127 : 2013 (2) SCC(L&S) 759 : 2013 (2) ApexCJ(SC) 341 : 2013 (2) RCR(Civ)
945 : 2013 (4) AWC 3282 : 2013 (3) RecApexJ 446 : 2014 (1) RecApexJ 185 : 2013 (99) ALR 462
: 2013 (3) PLJR(SC) 251 : 2013 (6) AD(SC) 568 : 2014 (1) LawHerald(SC) 673 : 2014 (1) CivCC
510 : 2013 (3) CivCC 130 : 2013 (3) JCR(SC) 197 : 2013 (2) DNJ(SC) 478 : 2013 (2) KerLT 748 :
2013 (3) JLJR(SC) 108 : 2013 (354) ITR 95 : 2014 (1) CivLJ 149 : AIRJharHCR 2013 441 : 2013
(3) RajLW 2153 : 2013 (3) BCR 905 : 2013 (3) PLR 776 : 2014 (1) WBLR 407 : 2013 (4) ALD(SC)
156 : 2013 (259) CTR 420 : 2014 (118) CutLT(SC) 203 : AIR 2013 SC 1783 : 2013 (2) GLH 42 :
2013 (2) AndhWR 90 : 2013 (216) Taxman 300 : 2013 (2) ACC 752 : 2013 ACJ 1441 : 2013 (3)
TAC 6 : 2013 (2) UAD 262 : 2013 (1) UAD 861 : 2013 (1) TNMAC 641 : 2014 (2) MPHT 459 : 2013
(4) CPR(SC) 62902 : 2014 (1) AICJ 501 : 2013 (3) AICJ 552 : 2013 AAC 2068 : 2013 JX(SC) 303 :
2013 AIJEL_SC 54023
28. (Referred To) :- Rekha Jain Vs. National Insurance Company Limited, 2013 (12) SCC 202 : AIR
2013 SC 3458 : 2013 (9) Scale 773 : 2013 (10) SCR 750 : JT 2013 (11) SC 42 : 2013 AIR SCW
4616 : 2013 (4) SCC(Cri) 122 : 2013 (129) AIC 206 : 2014 (2) SCC(L&S) 562 : 2014 (1)
ApexCJ(SC) 271 : 2013 (7) SLT 175 : 2013 (5) AWC 4353 : 2013 (4) RecApexJ 702 : 2013 (6)
MLJ 477 : 2013 (6) MLJ 199 : 2013 (5) LawHerald(SC) 3723 : 2013 (4) JCR(SC) 210 : 2013 (3)
DNJ(SC) 641 : 2014 (1) BCR 95 : 2013 (4) PLR 420 : AIR 2013 SC 2356 : 2013 (3) ACC 392 : 2013
ACJ 2161 : 2013 (3) TAC 770 : 2013 (3) TAC 747 : 2013 (4) LW 334 : 2013 (2) UAD 530 : 2013 (2)
TNMAC 297 : 2013 (4) CPR(SC) 624 : 2013 AAC 2677 : 2013 AIJEL_SC 54349
29. (Relied on) :- Jiju Kuruvila Vs. Kunjujamma Mohan, 2013 (9) SCC 166 : AIR 2013 SC 2293 : 2013
(8) Scale 722 : 2013 (7) SCR 276 : JT 2013 (13) SC 417 : 2013 AIR SCW 3881 : 2013 (4) Supreme
709 : 2013 (3) SCC(Cri) 849 : 2013 (2) ApexCJ(SC) 442 : 2013 (6) SLT 188 : 2013 (3) RCR(Civ)
817 : 2013 (4) AWC 4050 : 2013 (4) RecApexJ 364 : 2013 (5) MLJ 751 : 2013 (4) PLJR(SC) 261 :
2013 (7) AD(SC) 484 : 2013 (4) LawHerald(SC) 3066 : 2013 (4) JCR(SC) 110 : 2013 (3) DNJ(SC)
566 : 2013 (3) KerLT 261 : 2013 (4) JLJR(SC) 128 : 2013 (4) AllMR(SC) 946 : 2013 (4) BLJud 194
 : AIRJharHCR 2013 120 : 2013 (4) RajLW 3330 : 2013 (4) BCR 481 : 2013 (4) CTC 252 : 2014 (1)
WBLR 34 : 2013 (5) ALD(SC) 165 : 2013 (2) AndhWR 539 : 2014 (4) JBCJ(SC) 567 : 2013 (2)
OrissaLR 1045 : 2013 (3) ACC 49 : 2013 ACJ 2141 : 2013 (3) TAC 369 : 2013 (2) UAD 572 : 2014
(1) MadWN(Civ) 103 : 2014 (1) GoaLR 126 : 2013 JX(SC) 405 : 2013 AIJEL_SC 54170
30. (Referred To) :- Arvind Kumar Mishra Vs. New India Assurance Company Limited, 2010 (10) SCC
254 : 2010 (10) Scale 298 : 2010 (11) SCR 857 : JT 2010 (10) SC 254 : 2010 AIR SCW 6085 :
2010 (6) Supreme 844 : 2010 (3) SCC(Cri) 1258 : 2010 (4) RCR(Civ) 917 : 2010 (6) AWC 6383 :
2010 (6) RecApexJ 276 : 2011 (2) MLJ 308 : 2011 (1) PLJR(SC) 16 : 2011 (1) BBCJ(SC) 311 :
2010 (3) DNJ(SC) 950 : 2011 (3) AllLJ 894 : 2011 (2) CivLJ 321 : 2010 (4) BLJud 196 : 2011 (1)
PLR 740 : 2011 (2) MhLJ 12 : 2011 (1) MPLJ 566 : 2011 (111) CutLT(SC) 285 : 2010 (4) SCC(Civ)
153 : 2010 (2) CalLJ(SC) 332 : 2010 (4) ACC 348 : 2010 ACJ 2867 : 2010 (4) TAC 385 : 2011 (1)
LW 296 : 2010 (2) TNMAC 383 : 2010 (3) AICJ 203 : 2011 (3) MadWN(Civ) 108 : 2010 JX(SC)
453 : 2010 AIJEL_SC 48898
31. (Referred To) :- Oriental Insurance Company Limited Vs. Vithabai, 2011 (15) SCC 122 : AIR 2011
SC 2838 : 2011 (7) Scale 1 : JT 2011 (7) SC 89 : 2011 AIR SCW 4235 : 2011 (5) Supreme 319 :
2011 (107) AIC 49 : 2011 (5) SLT 335 : 2011 (3) RCR(Civ) 728 : 2011 (4) AWC 3945 : 2011 (4)
RecApexJ 125 : 2011 (89) ALR 460 : 2011 (2) WLC 353 : 2011 (2) DNJ(SC) 770 : AIRJharHCR
2011 440 : 2011 (4) RajLW 3430 : 2011 (4) PLR 123 : AIRKarR 2011 107 : 2011 (2) AndhWR 423 :
2011 (3) ACC 279 : 2011 ACJ 2004 : 2012 (1) KantLJ 177 : 2011 (3) TAC 623 : 2011 (3) MPWN
67 : 2011 (3) JKJ(SC) 87 : 2011 (2) TNMAC 536 : 2011 (3) AICJ 597 : 2011 AAC 3042 : 2011
JX(SC) 453 : 2011 AIJEL_SC 50093
32. (Referred To) :- Savita Vs. Bindar Singh, 2014 (4) SCC 505 : AIR 2014 SC 275 : 2014 (4) Scale 128
: 2014 (3) SCR 810 : JT 2014 (8) SC 605 : 2014 AIR SCW 2053 : 2014 (2) SCC(Cri) 379 : 2014
(138) AIC 135 : 2014 (2) ApexCJ(SC) 108 : 2014 (2) RCR(Civ) 473 : 2014 (2) RecApexJ 484 :
2014 (104) ALR 730 : 2014 (2) BBCJ(SC) 315 : 2014 (2) LawHerald(SC) 1324 : 2014 (3) CivCC
182 : 2014 (3) JCR(SC) 41 : 2014 DNJ(SC) 313 : 2014 (3) CivLJ 288 : 2014 (2) BLJud 106 :
AIRJharHCR 2014 710 : 2014 (2) RajLW 1221 : 2014 (2) PLR 724 : 2014 (3) CTC 427 : 2014 (3)
WBLR 755 : 2014 (5) MhLJ 95 : 2014 (3) MPLJ 534 : AIR 2014 SC 1195 : 2014 AllSCR 1688 :
2014 (2) RLR 433 : 2014 (2) JBCJ(SC) 319 : 2014 (32) LCD 1205 : 2014 (2) ACC 244 : 2014 ACJ
1261 : 2014 (2) TAC 385 : 2014 (1) UAD 581 : 2014 (2) TNMAC 750 : 2014 (1) AICJ 575 : 2014
AAC 1332 : 2014 JX(SC) 185 : 2014 AIJEL_SC 55134
33. (Referred To) :- Kum.Nagina Vs. Regl.Mgr., The Oriental Insurance Company Limited, 2013 (3)
ACC 16 : 2013 (2) TNMAC 383 : 2013 AIJEL_SC 58688
34. (Referred To) :- Santosh Devi Vs. National Insurance Company Limited, 2012 (6) SCC 421 : AIR
2012 SC 2185 : 2012 (4) Scale 559 : 2012 (3) SCR 1178 : JT 2012 (4) SC 353 : 2012 AIR SCW
2892 : 2012 (3) Supreme 197 : 2012 (3) SCC(Cri) 160 : 2012 (2) SCC(L&S) 167 : 2012 (3) SLT 411
: 2012 (2) RCR(Civ) 882 : 2012 (2) RecApexJ 505 : 2012 (6) MLJ 395 : 2012 (92) ALR 717 : 2012
(3) PLJR(SC) 28 : 2012 (3) BBCJ(SC) 249 : 2012 (3) JCR(SC) 81 : 2012 DNJ(SC) 365 : 2012 (2)
JLJR(SC) 420 : 2013 (3) CivLJ 335 : 2012 (3) BLJud 18 : 2012 (3) RajLW 2023 : 2012 (3) BCR 698
: 2012 (3) PLR 803 : 2012 (3) WBLR 462 : 2012 (5) MhLJ 527 : 2012 (2) ALD(SC) 35 : AIR 2012
SC 1519 : 2012 (2) AndhWR 52 : 2012 (Supp) CutLT(Cri) 1185 : 2012 (30) LCD 1233 : 2012 (2)
ACC 377 : 2012 ACJ 1428 : 2013 (2) KantLJ 673 : 2012 (3) TAC 1 : 2012 (3) LW 320 : 2012 (2)
TNMAC 1 : 2014 (1) CPR(SC) 293 : 2012 (3) AICJ 442 : 2012 (2) HimLR 805 : 2012 AAC 1713 :
2012 (1) UD 427 : 2012 (3) CGLRW 166 : 2012 JX(SC) 167 : 2012 AIJEL_SC 51142
35. (Referred To) :- Rekha Jain Vs. National Insurance Company Limited, 2013 (8) SCC 389 : AIR
2013 SC 3429 : 2013 (9) Scale 752 : JT 2013 (11) SC 185 : 2013 AIR SCW 4597 : 2013 (5)
Supreme 673 : 2013 (4) SCC(Cri) 297 : 2013 (129) AIC 237 : 2013 (3) ApexCJ(SC) 33 : 2013 (7)
SLT 132 : 2013 (4) RCR(Civ) 31 : 2013 (3) RCR(Civ) 996 : 2013 (5) AWC 5068 : 2013 (4)
RecApexJ 644 : 2013 (100) ALR 236 : 2013 (5) LawHerald(SC) 3728 : 2013 (4) CivCC 170 : 2013
(3) DNJ(SC) 696 : 2013 (4) RajLW 3189 : 2014 (1) WBLR 347 : 2013 (6) MhLJ 929 : 2013 (6)
ALD(SC) 35 : 2013 (5) ALD(SC) 154 : AIR 2013 SC 2337 : 2013 (2) AndhWR 826 : 2013 (3) ACC
 424 : 2013 (4) LW 314 : 2013 (2) TNMAC 275 : 2013 AAC 2682 : 2013 (2) CGLRW 360 : 2013
AIJEL_SC 54378
36. (Referred To) :- Reshma Kumari Vs. Madan Mohan, 2013 (9) SCC 65 : 2013 (5) Scale 160 : 2013
(2) SCR 706 : JT 2013 (4) SC 362 : 2013 AIR SCW 3120 : 2013 (2) Supreme 577 : 2013 (3)
SCC(Cri) 826 : 2013 (126) AIC 178 : 2013 (2) ApexCJ(SC) 392 : 2013 (7) SLT 489 : 2013 (2)
RCR(Civ) 660 : 2013 (4) AWC 3265 : 2013 (2) RecApexJ 664 : 2013 (99) ALR 1 : 2013 (3)
PLJR(SC) 391 : 2013 (1) WLC 740 : 2013 (3) BBCJ(SC) 425 : 2013 (4) AD(SC) 516 : 2013 (2)
LawHerald(SC) 1583 : 2013 (3) JCR(SC) 437 : 2013 (2) DNJ(SC) 257 : 2013 (2) KerLT 317 : 2013
(2) KerLT 304 : 2013 (3) JLJR(SC) 292 : 2013 (3) AllMR(SC) 460 : 2014 (2) CivLJ 866 : 2013 (2)
RajLW 1589 : 2013 (2) RajLW 1601 : 2013 (3) BCR 19 : 2013 (2) PLR 750 : 2013 (2) CTC 680 :
2013 (3) WBLR 382 : 2014 (1) MhLJ 120 : 2014 (1) MPLJ 50 : AIR 2013 SC 1731 : 2013 (1)
AndhWR 808 : 2013 (3) JBCJ(SC) 161 : 2014 (2) WLN 101 : 2013 (31) LCD 1412 : 2013 (2) ACC
907 : 2013 ACJ 1253 : 2013 (2) TAC 369 : 2013 (3) LW 1 : 2013 (2) UAD 228 : 2013 (1) TNMAC
481 : 2013 (4) AICJ 418 : 2013 AAC 2031 : 2013 (1) UD 378 : 2013 JX(SC) 208 : 2013 AIJEL_SC
53902
37. (Referred To) :- Shri Nagar Mal Vs. Oriental Insurance Company Limited, JT 2018 (1) SC 421 :
2018 JX(SC) 20 : 2018 AIJEL_SC 61547
38. (Relied on) :- Kusum Lata Vs. Satbir, 2011 (3) SCC 646 : AIR 2011 SC 1234 : 2011 (3) Scale 74 :
2011 (3) SCR 480 : 2011 AIR SCW 1593 : 2011 (2) Supreme 207 : 2011 (2) SCC(Cri) 18 : 2011 (2)
RCR(Civ) 397 : 2011 (2) AWC 1690 : 2011 (2) RecApexJ 154 : 2011 (3) MLJ 151 : 2011 (2)
PLJR(SC) 113 : 2011 (1) WLC 453 : 2011 (2) JCR(SC) 121 : 2011 (1) DNJ(SC) 304 : 2011 (2)
DNJ(SC) 732 : 2011 (2) JLJR(SC) 97 : 2011 (3) CivLJ 163 : 2011 (2) BLJud 143 : 2012 (1) RajLW
234 : 2011 (2) PLR 490 : 2011 (2) WBLR 666 : 2011 (3) MhLJ 722 : 2011 (3) MPLJ 18 : 2011 (2)
SCC(Civ) 37 : AIR 2011 SC 738 : 2011 (3) GLR 2179 : AIRKarR 2011 579 : 2011 (1) AndhWR 609 :
2011 (Supp) CutLT(Cri) 1149 : 2011 (3) WLN 1 : 2011 ACJ 926 : 2011 (2) TAC 1 : 2011 (3) LW
231 : 2011 (2) MPWN 238 : 2011 (1) TNMAC 334 : 2011 (3) MPHT 380 : 2011 (3) KCCR(SN) 183
: 2011 AAC 896 : 2011 JX(SC) 199 : 2011 AIJEL_SC 49493
39. (Referred To) :- Ramrao Lala Borse Vs. New India Assurance Company Limited, JT 2018 (1) SC
423 : 2018 JX(SC) 19 : 2018 AIJEL_SC 61546
40. (Referred To) :- Rajesh Vs. Rajbir Singh, 2013 (9) SCC 54 : 2013 (6) Scale 563 : 2013 (5) SCR 961
: JT 2013 (8) SC 288 : 2013 (3) SCC(Cri) 817 : 2014 (1) SCC(L&S) 149 : 2013 (2) ApexCJ(SC) 245
: 2013 (7) SLT 471 : 2013 (3) RCR(Civ) 170 : 2013 (3) AWC 3164 : 2013 (3) RecApexJ 659 : 2013
(4) LawHerald(SC) 3006 : 2013 (3) CivCC 15 : 2013 (3) KerLT 89 : 2014 (1) CivLJ 283 : 2014 (2)
RajLW 1185 : 2014 (1) PLR 779 : 2013 (3) CTC 883 : 2014 (1) WBLR 23 : 2014 (1) MhLJ 79 : 2013
(4) ALT(SC) 35 : 2014 (1) MPLJ 1 : 2014 AllSCR 2434 : 2013 (2) AndhWR 101 : 2013 (2) ACC 841
: 2013 ACJ 1403 : 2013 (3) TAC 697 : 2013 (3) KerLJ 177 : 2013 (3) LW 737 : 2013 (2) TNMAC 55
: 2013 (3) KHC 212 : 2013 (3) KLJ 177 : 2013 AIJEL_SC 54231
41. (Referred To) :- Radhakrishna Vs. Gokul, 2013 (16) SCC 585 : 2013 (13) Scale 420 : JT 2013 (15)
SC 44 : 2014 AIR SCW 548 : 2013 (8) Supreme 56 : 2013 (132) AIC 118 : 2014 (1) ApexCJ(SC)
442 : 2014 (1) RCR(Civ) 1 : 2013 (6) RecApexJ 346 : 2013 (101) ALR 735 : 2017 (2) PLJR(SC)
141 : 2013 (12) AD(SC) 34 : 2014 (3) LawHerald(SC) 1915 : 2014 (2) LawHerald(SC) 1365 : 2014
(1) CivCC 806 : 2014 (1) JCR(SC) 172 : 2017 (2) JLJR(SC) 98 : AIRJharHCR 2014 677 : 2014 (2)
PLR 714 : 2014 (3) ALD(SC) 181 : AIR 2014 SC 686 : 2014 AllSCR 110 : 2017 (1) PCCR(SC) 280 :
2013 ACJ 2860 : 2013 (4) TAC 737 : 2014 (1) UAD 91 : 2013 (2) TNMAC 724 : 2014 (1) AICJ 484
: 2014 AAC 598 : 2013 JX(SC) 724 : 2013 AIJEL_SC 54618
42. (Referred To) :- New India Assurance Company Limited Vs. Gopali, 2012 (12) SCC 198 : AIR 2012
SC 3381 : 2012 (6) Scale 534 : 2012 (6) SCR 834 : JT 2012 (6) SC 625 : 2012 AIR SCW 4330 :
2012 (117) AIC 255 : 2012 (3) RCR(Civ) 818 : 2012 (4) RecApexJ 87 : 2012 (94) ALR 210 : 2012
(5) LawHerald(SC) 3681 : 2013 (1) JLJR(SC) 217 : 2012 (4) PLR 593 : AIR 2013 SC 2320 : 2012
(2) AndhWR 187 : 2013 (Supp) CutLT(Cri) 692 : 2012 (4) ACC 670 : 2012 ACJ 2131 : 2012 (4)
TAC 353 : 2012 (2) TNMAC 656 : 2012 AAC 2549 : 2012 AIJEL_SC 52002
43. (Referred To) :- Afnees (Unconscious) Rep.Thr Mother Vs. Oriental Insurance Company Limited,
2017 (6) Scale 463 : 2017 (3) ACC 1 : 2017 ACJ 2622 : 2017 (3) TAC 673 : 2017 AIJEL_SC 61331
44. (Referred To) :- Reliance General Insurance Company Limited Vs. Shashi Sharma, 2016 (9) SCC
627 : AIR 2016 SC 4465 : 2016 (9) Scale 317 : JT 2016 (12) SC 409 : 2016 (7) Supreme 35 : 2016
(3) SCC(Cri) 713 : 2016 (167) AIC 173 : 2017 (1) SCC(L&S) 90 : 2016 (3) ApexCJ(SC) 520 : 2016
(4) RCR(Civ) 569 : 2016 (6) AWC 5918 : 2016 (5) RecApexJ 518 : 2017 (120) ALR 256 : 2016 (4)
JCR(SC) 256 : 2016 DNJ(SC) 949 : 2016 (4) RajLW 3005 : 2016 (4) PLR 696 : 2017 (1) WBLR 425
: 2016 (6) ALD(SC) 64 : 2017 AllSCR 2371 : 2017 (1) RLR 1 : AIRBomHCR 2016 477 : 2017 (1)
PCCR(SC) 289 : 2016 (4) ACC 340 : 2016 ACJ 2723 : 2016 (4) TAC 149 : 2017 (1) LW 980 : 2016
(3) LAR 508 : 2016 (2) TNMAC 721 : 2016 AAC 2480 : 2016 JX(SC) 647 : 2016 AIJEL_SC 59196
45. (Referred To) :- Balram Prasad Vs. Kunal Saha, 2014 (1) SCC 384 : 2013 (13) Scale 1 : 2013 (12)
SCR 30 : JT 2013 (14) SC 47 : 2013 (7) Supreme 323 : 2013 (8) SLT 513 : 2013 (4) RCR(Civ) 946 :
2013 (6) RecApexJ 165 : 2013 (7) MLJ 781 : 2013 (11) AD(SC) 169 : 2013 (6) LawHerald(SC)
4469 : 2014 (1) RajLW 54 : 2014 (1) BCR 397 : 2014 (4) WBLR 39 : 2014 AllSCR 1 : 2013 (6)
KantLJ 161 : 2013 (4) TAC 752 : 2013 (4) CLT(SC) 471 : 2013 (2) UAD 758 : 2013 (4) CPJ(SC) 1 :
2013 (3) CPC(SC) 367 : 2013 (4) CPR(SC) 284 : 2013 (Supp) HimLR 2029 : 2013 JX(SC) 704 :
2013 AIJEL_SC 54598
46. (Referred To) :- Sandhya Rani Debbarma Vs. National Insurance Company Limited, 2016 (8)
Scale 820 : JT 2016 (9) SC 212 : 2016 (166) AIC 39 : 2016 (3) ApexCJ(SC) 505 : 2016 (4)
RCR(Civ) 465 : 2016 (6) AWC 5517 : 2016 (5) RecApexJ 435 : 2016 (118) ALR 854 : 2016
DNJ(SC) 893 : 2016 (4) KerLT 951 : 2017 (1) CivLJ 787 : 2016 (4) PLR 730 : 2016 (4) PLR 811 :
2016 (2) AndhWR 539 : 2017 (2) ACC 665 : 2016 ACJ 2717 : 2016 (4) TAC 165 : 2016 (4) KerLJ
68 : 2016 (2) TNMAC 577 : 2016 JX(SC) 623 : 2016 AIJEL_SC 59165
47. (Relied on) :- Sunil Sharma Vs. Bachitar Singh, 2011 (11) SCC 425 : 2011 (4) Scale 383 : 2011 (2)
SCR 576 : JT 2011 (4) SC 232 : 2011 AIR SCW 2811 : 2011 (3) SCC(Cri) 206 : 2011 (2) RCR(Civ)
708 : 2011 (3) AWC 2904 : 2011 (2) RecApexJ 385 : 2011 (5) MLJ 205 : 2011 (3) BBCJ(SC) 266 :
2011 (2) DNJ(SC) 658 : 2011 (2) KerLT 451 : 2011 (3) AllLJ 378 : AIRJharHCR 2011 626 : 2012
(1) RajLW 419 : 2011 (4) PLR 638 : 2011 (4) ALD(SC) 109 : 2011 (4) SCC(Civ) 251 : AIR 2011 SC
1336 : AIRKarR 2011 457 : 2011 (2) AndhWR 35 : 2011 (2) ACC 552 : 2011 ACJ 1441 : 2011 (3)
TAC 629 : 2011 (5) LW 93 : 2011 (2) MPWN 338 : 2011 (2) UAD 146 : 2011 (2) TNMAC 56 : 2011
(2) AICJ 183 : 2011 AAC 1732 : 2011 JX(SC) 343 : 2011 AIJEL_SC 49703
48. (Referred To) :- M.Mansoor Vs. United India Insurance Company Limited, 2013 (15) SCC 603 :
AIR 2014 SC 1004 : 2013 (12) Scale 324 : 2013 (10) SCR 421 : JT 2013 (13) SC 427 : 2013 AIR
SCW 6497 : 2013 (8) Supreme 257 : 2013 (132) AIC 65 : 2013 (3) ApexCJ(SC) 541 : 2013 (4)
RCR(Civ) 729 : 2013 (5) RecApexJ 516 : 2013 (6) LawHerald(SC) 4541 : 2014 (1) LawHerald(SC)
173 : 2014 (2) JCR(SC) 23 : AIRJharHCR 2014 130 : 2014 (1) PLR 628 : 2014 (3) WBLR 898 : AIR
2014 SC 288 : 2014 AllSCR 143 : AIRBomHCR 2014 232 : 2013 ACJ 2849 : 2013 (4) TAC 832 :
2013 (2) UAD 876 : 2013 (2) TNMAC 481 : 2014 (1) CPR(SC) 278 : 2014 AAC 147 : 2014 (1)
GoaLR 88 : 2013 AIJEL_SC 54747
49. (Referred To) :- Chanderi Devi Vs. Jaspal Singh, 2015 (11) SCC 703 : 2015 (4) Scale 390 : JT
2015 (4) SC 74 : 2015 AIR SCW 2450 : 2015 (2) ApexCJ(SC) 272 : 2015 (2) RCR(Civ) 699 : 2015
(3) AWC 3065 : 2015 (2) RecApexJ 658 : 2015 (3) BBCJ(SC) 457 : 2015 (3) LawHerald(SC) 1853 :
2015 (3) LawHerald(SC) 2156 : 2015 DNJ(SC) 484 : AIRJharHCR 2015 246 : 2015 AllSCR 1788 :
2015 (2) AndhWR 280 : 2015 (4) WLN 234 : 2015 (2) ACC 705 : 2015 ACJ 1612 : 2015 (2) TAC
337 : 2015 (2) TNMAC 16 : 2015 (2) AICJ 113 : 2015 AAC 1593 : 2015 JX(SC) 263 : 2015
AIJEL_SC 56404
50. (Referred To) :- Shashikala Vs. Gangalakshmamma, 2015 (9) SCC 150 : 2015 (3) Scale 668 : JT
2015 (4) SC 26 : 2015 (3) Supreme 179 : 2015 (3) SCC(Cri) 730 : 2015 (150) AIC 151 : 2015 (2)
RCR(Civ) 510 : 2015 (3) AWC 2177 : 2015 (2) RecApexJ 399 : 2015 (3) MLJ 373 : 2015 (110) ALR
540 : 2015 (2) LawHerald(SC) 1597 : 2015 DNJ(SC) 388 : 2015 (3) BCR 517 : 2015 (3) PLR 634 :
2015 (4) SCC(Civ) 319 : 2015 (2) GLH 62 : 2015 (2) AndhWR 364 : 2015 (3) WLN 35 : 2015 (2)
 ACC 76 : 2015 ACJ 1239 : 2015 (2) TAC 867 : 2015 (1) TNMAC 785 : 2015 (2) AICJ 79 : 2015
JX(SC) 236 : 2015 AIJEL_SC 56366
51. (Referred To) :- Surti Gupta Vs. United India Insurance Company Limited, 2015 (11) SCC 457 :
2015 (3) Scale 795 : JT 2015 (3) SC 556 : 2015 AIR SCW 2447 : 2015 (149) AIC 17 : 2015 (2)
ApexCJ(SC) 250 : 2015 (2) RCR(Civ) 595 : 2015 (2) AWC 1858 : 2015 (2) RecApexJ 514 : 2015
(110) ALR 528 : 2015 (3) LawHerald(SC) 1834 : 2015 DNJ(SC) 399 : 2015 (4) CivLJ 547 :
AIRJharHCR 2015 243 : 2015 (3) PLR 644 : 2016 (3) WBLR 338 : 2015 (3) ALD(SC) 189 : 2015 (4)
SCC(Civ) 783 : 2015 AllSCR 1491 : 2016 (2) AndhWR 10 : 2015 (2) WLN 32 : 2015 (2) ACC 354 :
2015 ACJ 1755 : 2015 (3) TAC 5 : 2015 (1) TNMAC 472 : 2015 (2) AICJ 104 : 2015 AAC 1591 :
2015 JX(SC) 240 : 2015 AIJEL_SC 56370
52. (Referred To) :- Rebeka Minz Vs. Divisional Manger, United India Insurance Company Limited,
2012 (8) SCC 145 : AIR 2012 SC 3263 : 2012 (7) Scale 514 : 2012 (7) SCR 381 : JT 2012 (7) SC
517 : 2012 AIR SCW 4779 : 2012 (6) Supreme 223 : 2012 (3) SCC(Cri) 822 : 2012 (118) AIC 122 :
2012 (6) SLT 319 : 2013 (1) RCR(Civ) 220 : 2012 (5) RecApexJ 577 : 2012 (94) ALR 715 : 2012
(2) WLC 499 : 2012 (4) BBCJ(SC) 404 : 2012 (5) LawHerald(SC) 3556 : 2012 (4) JCR(SC) 137 :
2012 DNJ(SC) 693 : 2012 (5) AllMR(SC) 905 : 2013 (1) CivLJ 342 : 2012 (4) PLR 784 : 2012 (4)
WBLR 633 : 2013 (1) ALD(SC) 27 : 2013 (115) CutLT(SC) 330 : AIR 2012 SC 2559 : 2012 (3) GLH
232 : 2012 (2) AndhWR 459 : 2012 (3) ACC 759 : 2012 ACJ 2328 : 2012 (4) TAC 1 : 2012 (2) UAD
713 : 2012 (2) TNMAC 520 : 2013 (1) AICJ 125 : 2012 AAC 2917 : 2012 (2) UD 386 : 2012 JX(SC)
366 : 2012 AIJEL_SC 52047
53. (Referred To) :- Asha Verman Vs. Maharaj Singh, 2015 (11) SCC 389 : 2015 (4) Scale 329 : JT
2015 (3) SC 361 : 2015 AIR SCW 3577 : 2015 (149) AIC 66 : 2015 (2) RCR(Civ) 520 : 2015 (3)
AWC 3061 : 2015 (2) RecApexJ 445 : 2015 (110) ALR 445 : 2015 (3) BBCJ(SC) 134 : 2015 (2)
LawHerald(SC) 1203 : 2015 (4) JCR(SC) 15 : 2015 DNJ(SC) 406 : 2015 (6) ALD(SC) 24 : 2015 (4)
SCC(Civ) 767 : AIR 2015 SC 2065 : 2015 AllSCR 1476 : 2015 (2) AndhWR 517 : 2015 (2) JLJ 209 :
2015 (2) WLN 36 : 2015 (2) ACC 730 : 2015 ACJ 1286 : 2015 (2) TAC 299 : 2015 (1) TNMAC 465
: 2015 (3) MPHT 1 : 2015 (2) MPHT 301 : 2015 (2) AICJ 88 : 2015 AAC 2049 : 2015 JX(SC) 227 :
2015 AIJEL_SC 56357
54. (Referred To) :- Yerramma Vs. G.Krishnamurthy, 2014 (15) SCC 65 : AIR 2015 SC 1145 : 2014
(10) Scale 213 : JT 2014 (11) SC 272 : 2015 AIR SCW 514 : 2015 (2) Supreme 375 : 2014 (143)
AIC 248 : 2014 (3) ApexCJ(SC) 279 : 2014 (4) RCR(Civ) 266 : 2014 (5) RecApexJ 193 : 2014 (4)
LawHerald(SC) 2859 : 2014 (4) JCR(SC) 228 : 2014 DNJ(SC) 1082 : AIRJharHCR 2015 608 :
2015 (1) AirKarR 636 : 2014 (3) ACC 874 : 2014 ACJ 2161 : 2014 (4) TAC 337 : 2015 (1) LAR 424
: 2014 (2) TNMAC 608 : 2014 (4) AICJ 114 : 2015 (2) HimLR 991 : 2015 AAC 665 : 2014
AIJEL_SC 55855
55. (Referred To) :- Amrit Bhanu Shali Vs. National Insurance Company Limited, 2012 (11) SCC 738 :
2012 (6) Scale 1 : 2012 (5) SCR 207 : JT 2012 (6) SC 301 : 2012 AIR SCW 3901 : 2013 (1)
SCC(Cri) 1126 : 2012 (116) AIC 129 : 2012 (8) SLT 423 : 2012 (4) RCR(Civ) 343 : 2012 (4)
RecApexJ 427 : 2012 (93) ALR 650 : 2012 (4) JCR(SC) 116 : 2012 DNJ(SC) 706 : 2012 (5)
AllMR(SC) 890 : 2012 (4) BLJud 212 : AIRJharHCR 2013 661 : 2012 (3) RajLW 2748 : 2012 (4)
PLR 208 : 2012 (4) WBLR 40 : 2012 (6) ALD(SC) 2 : AIR 2012 SC 1954 : 2012 (2) AndhWR 291 :
2012 (Supp) CutLT(Cri) 1639 : 2012 (4) ACC 248 : 2012 ACJ 2002 : 2012 (4) TAC 775 : 2013 (2)
KerLJ 816 : 2012 (2) TNMAC 321 : 2012 (4) AICJ 691 : 2012 AAC 2279 : 2012 AIJEL_SC 52034
56. (Referred To) :- Arun Kumar Agrawal Vs. National Insurance Company, 2010 (9) SCC 218 : AIR
2010 SC 3426 : 2010 (7) Scale 242 : 2010 (9) SCR 303 : JT 2010 (7) SC 304 : 2010 AIR SCW
5335 : 2010 (7) Supreme 641 : 2010 (3) SCC(Cri) 1313 : 2010 (7) UJ 3564 : 2010 (93) AIC 104 :
2010 (5) SLT 290 : 2010 (3) RCR(Civ) 827 : 2010 (Supp4) AWC 3954 : 2010 (4) RecApexJ 262 :
2010 (7) MLJ 811 : 2010 (82) ALR 281 : 2011 (1) WLC 154 : 2010 (2) DNJ(SC) 763 : 2010 (4)
KerLT 230 : 2010 (3) PLR 428 : 2010 (4) WBLR 321 : 2011 (1) MhLJ 8 : 2010 (4) MadLW 600 :
2010 (6) ALD(SC) 123 : 2011 (1) MPLJ 14 : 2010 (3) SCC(Civ) 664 : 2010 (3) LRC 100 : 2010 (2)
AndhWR 621 : 2011 (1) OrissaLR 43 : 2010 (3) WLN 44 : 2010 (28) LCD 1125 : 2010 (3) ACC 313
 : 2010 ACJ 2161 : 2010 (3) TAC 769 : 2010 (2) TNMAC 129 : 2010 (2) AICJ 228 : 2010 (2) UD
247 : 2010 AIJEL_SC 48750
57. (Referred To) :- Kalpanaraj Vs. Tamil Nadu State Transport Corpn., 2015 (2) SCC 764 : AIR 2014
SC 34 : 2014 (5) Scale 479 : JT 2014 (7) SC 226 : 2014 AIR SCW 2982 : 2014 (4) Supreme 379 :
2015 (2) SCC(Cri) 289 : 2014 (139) AIC 256 : 2014 (2) ApexCJ(SC) 327 : 2014 (2) RCR(Civ) 876 :
2014 (3) RecApexJ 112 : 2014 (105) ALR 261 : 2014 (3) PLJR(SC) 267 : 2014 (3) BBCJ(SC) 483 :
2014 (3) LawHerald(SC) 2577 : 2014 (3) LawHerald(SC) 1920 : 2014 (3) CivCC 456 : 2014 (3)
JCR(SC) 188 : 2014 (3) JLJR(SC) 145 : 2014 (4) AllMR(SC) 896 : AIRJharHCR 2014 250 : 2014
(3) PLR 540 : 2015 (1) WBLR 67 : 2015 (2) SCC(Civ) 193 : AIR 2014 SC 1608 : 2014 (2) AndhWR
598 : 2014 (Supp2) CutLT(Cri) 618 : 2014 (32) LCD 888 : 2014 (2) ACC 448 : 2014 ACJ 1388 :
2014 (3) TAC 707 : 2014 (2) TAC 744 : 2014 (1) TNMAC 708 : 2014 (1) AICJ 615 : 2014 AAC
1842 : 2014 JX(SC) 297 : 2014 AIJEL_SC 55281
58. (Followed) :- Mohd.Ameeruddin Vs. United India Insurance Company Limited, 2011 (1) SCC 304 :
2010 (12) Scale 155 : 2011 (1) SCC(Cri) 862 : 2011 (97) AIC 63 : 2001 (2) Slt 724 : 2011 (84) ALR
440 : 2011 (1) BBCJ(SC) 315 : 2010 (3) DNJ(SC) 1170 : 2011 (2) PLR 453 : 2011 (111) CutLT(SC)
903 : 2011 (1) SCC(Civ) 138 : 2011 (1) RCR(Rent) 903 : AIR 2011 SC 67 : 2011 (1) AndhWR 260 :
2011 (1) OrissaLR 489 : 2010 (4) ACC 806 : 2011 ACJ 13 : 2011 (1) TAC 1 : 2011 (1) MPWN 233 :
2010 (2) TNMAC 649 : 2010 (3) AICJ 460 : 2011 AAC 1865 : 2010 AIJEL_SC 49346
59. (Referred To) :- New India Assurance Company Limited Vs. Gajender Yadav, 2017 (8) Scale 190 :
JT 2017 (7) SC 284 : 2017 (180) AIC 171 : 2017 (3) ApexCJ(SC) 298 : 2017 (3) RCR(Civ) 974 :
2017 (4) RecApexJ 577 : 2017 DNJ(SC) 887 : 2017 ACJ 2834 : 2017 (2) TNMAC 465 : 2017
AIJEL_SC 61341
60. (Referred To) :- Anjani Singh Vs. Salauddin, 2014 (15) SCC 582 : 2014 (6) Scale 55 : JT 2014 (7)
SC 183 : 2014 (4) Supreme 765 : 2016 (1) SCC(Cri) 844 : 2014 (139) AIC 237 : 2014 (2)
ApexCJ(SC) 233 : 2014 (3) RCR(Civ) 366 : 2014 (3) RecApexJ 574 : 2014 (105) ALR 255 : 2014
(4) LawHerald(SC) 3067 : 2014 (3) LawHerald(SC) 2303 : 2014 (3) JCR(SC) 192 : 2014 (4)
AllMR(SC) 427 : 2015 (2) WBLR 455 : 2014 (118) CutLT(SC) 1126 : 2015 (4) SCC(Civ) 459 : 2014
(2) AndhWR 756 : 2014 (32) LCD 1400 : 2014 (3) ACC 527 : 2014 ACJ 1565 : 2014 (3) TAC 1 :
2014 (2) TNMAC 1 : 2015 (1) ShimLC 210 : 2014 (1) AICJ 687 : 2014 JX(SC) 323 : 2014
AIJEL_SC 55376
61. (Referred To) :- Syed Sadiq Etc. Vs. Divisional Manager, United India Ins.Co., 2014 (2) SCC 735 :
AIR 2014 SC 1052 : 2014 (1) Scale 377 : JT 2014 (1) SC 569 : 2014 AIR SCW 724 : 2014 (137)
AIC 149 : 2014 (1) RCR(Civ) 765 : 2014 (1) RecApexJ 420 : 2014 (104) ALR 228 : 2014 (1)
BBCJ(SC) 430 : 2014 (1) LawHerald(SC) 413 : 2014 (2) JCR(SC) 228 : 2014 DNJ(SC) 127 : 2014
(2) CIVLJ 677 : AIRJharHCR 2014 746 : 2014 (3) WBLR 837 : 2014 (4) MhLJ 538 : 2014 (2)
ALD(SC) 133 : 2014 (3) MPLJ 5 : 2014 (118) CutLT(SC) 29 : AIR 2014 SC 840 : 2015 AllSCR 347 :
2014 (2) RLR 78 : AIRKarR 2014 757 : 2014 (2) JBCJ(SC) 137 : 2014 (3) KerLT(SN) 21 : 2014 (32)
LCD 242 : 2014 (1) ACC 206 : 2014 ACJ 627 : 2014 (1) TAC 369 : 2014 (1) TNMAC 459 : 2014 (1)
AICJ 518 : 2014 AAC 684 : 2014 (1) CGLRW 111 : AIR 2014 CC 1749 : 2014 JX(SC) 30 : 2014
AIJEL_SC 54827
62. (Referred To) :- Shyamwati Sharma Vs. Karam Singh, 2010 (12) SCC 378 : 2010 (6) Scale 763 :
2010 (8) SCR 417 : JT 2010 (7) SC 214 : 2010 AIR SCW 4391 : 2011 (1) SCC(Cri) 288 : 2010 (92)
AIC 80 : 2010 (5) SLT 328 : 2010 (3) RCR(Civ) 741 : 2010 (Supp5) AWC 5429 : 2010 (81) ALR 778
: 2010 (2) WLC 497 : 2011 (1) BBCJ(SC) 302 : 2010 (3) CivCC 932 : 2010 (4) JCR(SC) 7 : 2010 (2)
DNJ(SC) 716 : 2010 (4) JLJR(SC) 99 : 2014 (3) JLJR(SC) 99 : 2010 (4) RAJ 150 : AIRJharHCR
2011 248 : 2010 (3) RajLW 2596 : 2010 (4) PLR 285 : 2010 (5) ALD(SC) 142 : 2010 (4) SCC(Civ)
626 : 2010 (2) AndhWR 512 : 2010 (3) ACC 166 : 2010 ACJ 1968 : 2010 (4) TAC 29 : 2011 (4)
MPHT 416 : 2010 (2) AICJ 84 : 2010 (2) UD 77 : 2011 (1) GoaLR 120 : 2010 JX(SC) 307 : 2010
AIJEL_SC 48579
63. (Referred To) :- New India Assurance Company Limited Vs. Shanti Bopanna, AIR 2017 SC 2857 :
2017 (6) Scale 492 : 2017 DNJ(SC) 663 : 2017 (5) ALD(SC) 104 : 2017 AllSCR 1724 : 2017 (4)
 ACC 443 : 2017 ACJ 2045 : 2017 (2) TNMAC 469 : 2017 AAC 1714 : 2017 AIJEL_SC 60405
64. (Relied on) :- National Insurance Company Limited Vs. Kimlibai, 2009 (10) SCC 648 : 2009 (10)
Scale 588 : JT 2009 (11) SC 93 : 2009 AIR SCW 6746 : 2009 (6) Supreme 106 : 2010 (1) SCC(Cri)
377 : 2009 (82) AIC 270 : 2009 (3) ApexCJ(SC) 559 : 2009 (4) RCR(Civ) 85 : 2010 (2) AWC 1822 :
2009 (8) MLJ 1499 : 2009 (2) WLC 710 : 2009 (4) BBCJ(SC) 51 : 2010 (2) BBCJ(SC) 43 : 2009 (5)
RAJ 175 : 2010 (1) CivLJ 243 : 2010 (2) PLR 602 : 2009 (5) CTC 187 : 2010 (2) WBLR 42 : 2009
(6) ALD(SC) 41 : 2009 (4) SCC(Civ) 300 : 2009 (4) LRC 238 : 2009 (2) AndhWR 485 : 2010 (1) JLJ
408 : 2011 (1) ACC 709 : 2009 ACJ 2648 : 2009 (4) TAC 938 : 2009 (2) UAD 825 : 2009 (2)
TNMAC 256 : 2009 (2) AICJ 614 : 2009 AIJEL_SC 44278
65. (Referred To) :- Jakir Hussein Vs. Sabir, 2015 (7) SCC 252 : 2015 (2) Scale 582 : JT 2015 (2) SC
424 : 2015 AIR SCW 1496 : 2015 (3) SCC(Cri) 72 : 2015 (2) SCC(L&S) 427 : 2015 (1) ApexCJ(SC)
660 : 2015 (2) RCR(Civ) 141 : 2015 (2) AWC 1475 : 2015 (2) RecApexJ 42 : 2015 (2) MLJ 632 :
2015 (2) BBCJ(SC) 313 : 2015 (2) LawHerald(SC) 1475 : 2015 (3) LawHerald(SC) 2089 : 2015 (2)
JCR(SC) 260 : 2015 DNJ(SC) 282 : 2015 (2) AllMR(SC) 910 : 2015 (2) CivLJ 572 : 2015 (2) RajLW
1215 : 2015 (4) WBLR 393 : 2016 (1) MhLJ 151 : 2015 (3) ALD(SC) 115 : 2016 (1) MPLJ 123 :
2015 (3) SCC(Civ) 584 : AIR 2015 SC 2073 : 2015 (2) AndhWR 82 : 2015 (2) CalLJ(SC) 78 : 2015
(2) JLJ 124 : 2015 (2) ACC 1 : 2015 ACJ 721 : 2015 (2) TAC 692 : 2015 (2) LAR 337 : 2015 (1)
TNMAC 321 : 2015 (2) AICJ 57 : 2015 AAC 1126 : 2015 JX(SC) 133 : 2015 AIJEL_SC 56230
66. (Referred To) :- P.S.Somanathan Vs. District Insurance Officer, 2011 (3) SCC 566 : 2011 (2) Scale
473 : 2011 (4) SCR 367 : JT 2011 (2) SC 242 : 2011 AIR SCW 1313 : 2011 (2) SCC(Cri) 48 : 2011
(100) AIC 223 : 2011 (2) RCR(Civ) 228 : 2011 (2) AWC 1812 : 2011 (2) RecApexJ 36 : 2011 (4)
MLJ 169 : 2011 (85) ALR 741 : 2011 (1) WLC 442 : 2011 (2) BBCJ(SC) 198 : 2011 (2) CivCC 426 :
2011 (2) JCR(SC) 59 : 2011 (1) DNJ(SC) 232 : 2011 (3) AllLJ 750 : 2011 (2) CivLJ 912 :
AIRJharHCR 2011 324 : 2011 (2) PLR 497 : 2011 (3) MhLJ 735 : 2011 (3) MPLJ 10 : 2011 (112)
CutLT(SC) 208 : 2011 (2) SCC(Civ) 23 : 2011 (1) ACC 659 : 2011 ACJ 737 : 2011 (1) TAC 861 :
2011 (5) LW 408 : 2011 (1) TNMAC 306 : ILR 2011 Ker 1 : 2011 (2) KCCR(SN) 163 : 2011 (2) KLJ
19 : 2011 AAC 867 : 2011 JX(SC) 137 : 2011 AIJEL_SC 49418
67. (Referred To) :- Bhogireddi Varalakshmi Vs. Mani Muthupandi, 2017 (3) SCC 802 : AIR 2017 SC
1195 : 2017 (3) Scale 323 : JT 2017 (3) SC 75 : 2017 (2) Supreme 402 : 2017 (2) SCC(Cri) 1 :
2017 (172) AIC 21 : 2017 (2) ApexCJ(SC) 32 : 2017 (2) RCR(Civ) 273 : 2017 (2) RecApexJ 335 :
2017 (123) ALR 210 : 2017 (1) LawHerald(SC) 647 : 2017 (2) JCR(SC) 140 : 2017 DNJ(SC) 413 :
2017 (2) BLJud 79 : 2017 (1) SCCriR 344 : AIRJharHCR 2017 785 : 2017 (2) BCR 733 : 2017 (3)
PLR 503 : 2017 (67) OrissaCriR 40 : 2017 AllSCR 908 : 2017 (1) AndhWR 501 : 2017 (2)
JBCJ(SC) 400 : 2017 (2) ACC 460 : 2017 ACJ 1391 : 2017 (2) TAC 3 : 2017 (1) TNMAC 595 :
2017 (2) HimLR 1246 : 2017 AAC 993 : 2017 JX(SC) 150 : 2017 AIJEL_SC 59843
68. (Referred To) :- Sri.K.R.Madhusudhan Vs. Administrative Officer, 2011 (4) SCC 689 : 2011 (2)
SCC 422 : AIR 2011 SC 979 : 2011 (2) Scale 511 : 2011 (2) SCR 1061 : 2011 AIR SCW 1390 :
2011 (2) Supreme 86 : 2011 (2) SCC(Cri) 706 : 2011 (99) AIC 6 : 2011 (2) RCR(Civ) 188 : 2011 (2)
AWC 1820 : 2011 (1) RecApexJ 638 : 2011 (85) ALR 476 : 2011 (1) WLC 390 : 2011 (2) BBCJ(SC)
188 : 2011 (2) JCR(SC) 68 : 2011 (1) DNJ(SC) 289 : 2011 (3) CivLJ 658 : 2011 (2) PLR 487 : 2011
(2) WBLR 705 : 2011 (4) MhLJ 520 : 2011 (3) MPLJ 486 : 2011 (112) CutLT(SC) 345 : 2011 (1)
UC 565 : AIRKarR 2011 287 : 2011 (1) AndhWR 691 : 2011 (2) WLN 23 : 2011 (1) ACC 700 : 2011
ACJ 743 : 2011 (1) TAC 874 : 2011 (3) LW 227 : 2011 (1) TNMAC 161 : 2011 AAC 744 : 2011
JX(SC) 143 : 2011 AIJEL_SC 49424
69. (Referred To) :- G.Dhanasekar Vs. M.D.,Metropolitan Transport Corporation Limited, 2014 (14)
SCC 391 : AIR 2014 SC 1913 : 2014 (2) Scale 257 : 2014 (1) SCR 1021 : JT 2014 (3) SC 146 :
2014 AIR SCW 1319 : 2015 (1) SCC(Cri) 367 : 2014 (137) AIC 225 : 2014 (1) RCR(Civ) 993 : 2014
(2) RecApexJ 43 : 2014 (104) ALR 194 : 2014 (2) BBCJ(SC) 202 : 2014 (1) LawHerald(SC) 903 :
2014 (2) JCR(SC) 251 : 2014 DNJ(SC) 220 : 2014 (1) KerLT 826 : 2014 (2) CivLJ 447 : 2014 (2)
RajLW 1461 : 2014 (2) PLR 233 : 2015 (1) SCC(Civ) 329 : AIR 2014 SC 1009 : 2014 AllSCR 1100 :
2014 (2) RLR 270 : AIRBomHCR 2014 686 : 2014 (3) WLN 108 : 2014 (32) LCD 1361 : 2014 (1)
 ACC 593 : 2014 ACJ 1007 : 2014 (1) TAC 965 : 2014 (1) CLT(SC) 462 : 2014 (1) TNMAC 289 :
2014 (2) ShimLC 1100 : 2014 (1) AICJ 546 : 2014 (1) HimLR 259 : 2014 AAC 1109 : 2014
AIJEL_SC 55127

Equivalent Citation(s):
2009 (6) SCC 121 : AIR 2009 SC 3104

JUDGMENT :-

R.V.Raveendran, J.

1 The claimants in a motor accident claim

have filed this appeal by special leave seeking
increase in
compensation.

2 One Rajinder Prakash died on account of injuries sustained in a motor accident which occurred on
18.4.1988 involving
a bus bearing No.DLP 829 belonging to the
Delhi Transport Corporation. At the
time of
the accident and untimely death, the deceased was aged 38 years, and was working as a
Scientist in the Indian Council of Agricultural Research (ICAR) on a monthly salary of Rs.3402/- and
other benefits. His widow, three minor children, parents and grandfather (who
is no more) filed a claim
for Rs.16 lakhs before the Motor Accidents Claims Tribunal, New
Delhi. An officer of ICAR, examined
as PW-
4, gave evidence that the age of retirement
in the service of ICAR was 60 years and the
salary
received by the deceased at the time
of his death was Rs.4004/- per month.

3 The Tribunal by its judgment and

award dated 6.8.1993 allowed the claim in
part. The Tribunal
calculated the compensation by taking the monthly salary of the deceased as Rs.3402. It deducted
one-third towards the personal and living expenses of the
deceased, and arrived at the contribution to
the family as Rs.2250 per month (or
Rs.27,000/- per annum). In view of the evidence that the age of
retirement was 60 years,
it held that the period of service lost on account of the untimely death was
22 years.
Therefore it applied the multiplier of 22 and
arrived at the loss of dependency to the family
as Rs.5,94,000/-. It awarded the said
amount with interest at the rate of 9% per
annum from the date
of petition till the date
of realization. After deducting Rs.15000/-
paid as interim compensation, it
apportioned
the balance compensation among the claimants, that is, Rs.3,00,000/- to the widow,
Rs.75000/- to each of the two daughters,
Rs.50000/- to the son, Rs. 19000/- to the
grandfather and
Rs.30000A to each of the parents.

4 Dissatisfied with the quantum of

compensation, the appellants filed an appeal.
The Delhi High Court
by its judgment dated
15.2.2007 allowed the said appeal in part.
The High Court was of the view that
though
in the claim petition the pay was mentioned
as Rs.3,402 plus other benefits, the pay
should be
taken as Rs.4,004/- per month as
per the evidence of PW-4. Having regard to
the fact that the
deceased had 22 years of
service left at the time of death and would
have earned annual increments
and pay revisions during that period, it held that the salary would have at least doubled (Rs.8008/-
per
month) by the time he retired. It therefore determined the income of the deceased
as Rs.6006/- per
month, being the average
of Rs.4,004/- (salary which he was getting at
the time of death) and
Rs.8,008/- (salary
which he would have received at the time of
retirement). Having regard to the large
number of members in the family, the High Court
was of the view that only one fourth should
be
deducted towards personal and living expenses of the deceased, instead of the standard one-third
deduction. After such deduction, it arrived at the contribution to the family as Rs.4,504/- per month or
Rs.54,048/-
per annum. Having regard to the age of the
deceased, the High Court chose the multiplier
of 13. Thus it arrived at the loss of dependency as Rs.702,624/-. By adding
Rs.15,000/- towards loss
of consortium and
Rs.2,000/- as funeral expenses, the total compensation was determined as Rs.
7,19,624/-.
Thus it disposed of the appeal by increasing
the compensation by Rs.1,25,624/- with
interest at the rate of 6% PA. from the date of
claim petition.

5 Not being satisfied with the said increase, the appellants have filed this appeal.
They contend that
the High Court erred in
holding that there was no evidence in regard
to future prospects; and that
though there is
no error in me method adopted for calculations, the High Court ought to have taken a
higher amount as the income of the deceased.
They submit that two applications were filed
before the
High Court on 2.6.2000 and
5.5.2005 bringing to the notice of the High
Court that having regard to the
pay revisions,
the pay of the deceased would have been
Rs.20,890/-per month as on 31.12.1999 and
Rs.32,678/- as on 1.10.2005, had he been
alive. To establish the revisions in pay scales
and
consequential re-fixation, the appellants
produced letters of confirmation dated
7.12.1998 and
28.10.2005 issued by the
employer (ICAR). Their grievance is that the
High Court did not take note of
those indisputable documents to calculate the income
and the loss of dependency. They contend
that
the monthly income of the deceased
should be taken as Rs. 18341/- being the average of Rs.32,678/-
(income shown as on
1.10.2005) and Rs.4,004/- (income at the
time of death). They submit that only
one-
eighth should have been deducted towards
persona] and living expenses of the deceased.
They
point out that even if only one fourth
(Rs.4585/-) was deducted therefrom towards
personal and living
expenses of the deceased,
the contribution to the family would have been
Rs.13,756/- per month or
Rs.1,65,072/- per
annum. They submit that having regard to
the Second Schedule to the Motor
Vehicles
Act 1988 ('Act' for short), the appropriate
multiplier for a person dying at the age of 38
years
would be 16 and therefore the total loss
of dependency would be Rs.26,41,152/-. They
also contend
that Rs.1,00,000/- should be
added towards Pain and suffering undergone
by the claimants. They
therefore submit that
Rs.27 47 152/- should be determined as the
compensation payable to them.

6 The contentions urged by the parties give rise to the following questions:

(i) Whether the future prospects can

be taken into account for determining the income of the
deceased ?
If so, whether pay revisions that
occurred during the pendency of
the claim
proceedings or appeals
therefrom should be taken into
account ?

(ii) Whether the deduction towards

personal and living expenses of the
deceased should be less
than one-
fourth (1/4th) as contended by the
appellants, or should be one-third
(1/3rd) as
contended by the respondents ?

(iii) Whether the High Court erred in

taking the multiplier as 13 ?

(iv) What should be the compensation?

The general principles

7 Before considering the questions

arising for decision, it would be appropriate
to recall the relevant
principles relating to assessment of compensation in cases of death.
Earlier, there used to be
considerable variation and inconsistency in the decisions of
courts Tribunals on account of some
adopting the Nance method enunciated in Nance
v. British Columbia Electric Rly. Co. Ltd., 1951 AC
601 and some adopting the Davies
method enunciated in Davies V/s. Powell
Duffryn Associated
Collieries Ltd., 1942 AC
601. The difference between the two methods was considered and explained
by this
Court in General Manager, Kerala State Road
Transport Corporation V/s. Susamma Thomas,
1994 (2) SCC 176. After exhaustive consideration, this Court preferred the Davies
method to Nance
method. We extract below
the principles laid down in Susamma Thomas:

"In fatal accident action, the measure of

damage is the pecuniary loss suffered and
is likely to be
suffered by each dependant as a result of the death. The assessment of damages to
compensate the
dependants is beset with difficulties because from the nature of things, it has to
take into account many imponderables,
e.g., the life expectancy of the deceased
and the
dependants, the amount that the
deceased would have earned during the
remainder of his life,
the amount that
he would have contributed to the
dependants during that period, the
chances
that the deceased may not have
lived or the dependants may not live up
to the estimated
remaining period of
their life expectancy, the chances that the
deceased might have got better
employment or income or might have lost his
employment or income altogether."

"The matter of arriving at the damages

is to ascertain the net income of the deceased available
for the support of himself and his dependants, and to deduct
therefrom such part of his income
as the
deceased was accustomed to spend
upon himself, as regards both self-
maintenance and
pleasure, and to ascertain what part of his net income the
deceased was accustomed to spend
for
the benefit of the dependants. Then that
should be capitalized by multiplying it by
a figure
representing the proper number of year's purchase."

"The multiplier method involves the ascertainment of the loss of dependency

or the multiplicand
having regard to the
circumstances of the case and capitalizing the multiplicand by an
appropriate
multiplier. The choice of the multiplier is
determined by the age of the deceased
(or
that of the claimants whichever is
higher) and by the calculation as to what
capital sum, if
invested at a rate of interest appropriate to a stable economy,
would yield the multiplicand by
way of
annual interest. In ascertaining this, regard should also be had to the fact that
ultimately
the capital sum should also be
consumed-up over the period for which
the dependency is
expected to last."

"It is necessary to reiterate that the multiplier method is logically sound and legally well-
established. There are some
cases which have proceeded to determine the compensation on
the basis of
aggregating the entire future earnings for
over the period the life expectancy was
lost, deducted a percentage therefrom
towards uncertainties of future life and
award the
resulting sum as compensation. This is clearly unscientific. For instance, if the deceased was,
say 25 year
of age at the time of death and the life
expectancy is 70 years, this method
would
multiply the loss of dependency
for 45 years - virtually adopting a multiplier of 45 - and even if
one-third or one-
fourth is deducted therefrom towards the
uncertainties of future life and for
immediate lump sum payment, the effective multiplier would be between 30 and
34. This is
wholly impermissible."

In UP State Road Transport Corporation

vs. Trilok Chandra, 1996 (4) SCC 362, this
Court, while
reiterating the preference to
Davies method followed in Susamma Thomas, stated thus :

"In the method adopted by Viscount

Simon in the case of Nance also, first the
annual
dependency is worked out and
then multiplied by the estimated useful
life of the deceased. This
is generally
determined on the basis of longevity. But
then, proper discounting on various factors
having a bearing on the uncertainties of life, such as, premature death of
the deceased or the
dependent, remarriage, accelerated payment and increased
earning by wise and prudent
investments, etc., would become necessary. It
was generally felt that discounting on
various
imponderables made assessment
of compensation rather complicated and
cumbersome and
very often as a rough
and ready measure, one-third to one-
half of the dependency was reduced,
depending on the life-span taken. That
is the reason why courts in India as well
as England
preferred the Davies' formula as being simple and more realistic.
However, as observed earlier
and as
pointed out in Susamma Thomas' case,
usually English courts rarely exceed 16
as the
multiplier. Courts in India too followed the same pattern till recently when
Tribunals/Courts
began to use a hybrid
method of using Nance's method without making deduction for
imponderables
........Under the formula advocated
by Lord Wright in Davies, the loss
has to be
ascertained by first determining the monthly income of the
deceased, then deducting therefrom
 the amount spent on the deceased,
and thus assessing the loss to the
dependents of the
deceased. The
annual dependency assessed in this
manner is then to be multiplied by
the use of
an appropriate multiplier."
[emphasis supplied]

8 The lack of uniformity and consistency in awarding compensation has been a

matter of grave
concern. Every district has
one or more Motor Accident Claims Tribunal/s. If different Tribunals
calculate compensation differently on the same facts, the claimant, the litigant, the common man will
be
confused, perplexed and bewildered. If there
is significant divergence among Tribunals in
determining the quantum of compensation
on similar facts, it will lead to dissatisfaction
and distrust
in the system. We may refer to
the following observations in Trilok Chandra:

"We thought it necessary to reiterate the

method of working out 'just' compensation because, of
late, we have noticed
from the awards made by Tribunals and
Courts that the principle on which
the
multiplier method was developed has
been lost sight of and once again a hybrid method
based on the subjectivity
of the Tribunal/Court has surfaced, introducing uncertainty and lack of
reasonable uniformity in the matter of determination of compensation. It must be
realized that
the Tribunal/Court has to
determine a fair amount of compensation awardable to the victim of
an accident which must be proportionate to the
injury caused."

Compensation awarded does not become 'just compensation' merely because the
Tribunal
considers it to be just. For example,
if on the same or similar facts (say deceased
aged 40 years
having annual income of
45,000/- leaving him surviving wife and child),
one Tribunal awards
Rs.10,00,000/- another
awards Rs.5,00,000/-, and yet another
awards Rs.1,00,000/-, all believing
that the
amount is just, it cannot be said that what is
awarded in the first case and last case, is
just
compensation. Just compensation is adequate
compensation which is fair and equitable,
on
the facts and circumstances of the case, to
make good the loss suffered as a result of the
wrong, as far as money can do so, by applying the well settled principles relating to award
of
compensation. It is not intended to be a
bonanza, largesse or source of profit. Assessment of
compensation though involving certain hypothetical considerations, should nevertheless be
objective. Justice and justness
emanate from equality in treatment, consistency and
thoroughness in adjudication, and
fairness and uniformity in the decision making process and
the decisions. While it may
not be possible to have mathematical precision or identical awards,
in assessing compensation, same or similar facts should lead to
awards in the same range.
When the factors/
inputs are the same, and the formula/legal
principles are the same,
consistency and uniformity, and not divergence and freakiness,
should be the result of
adjudication to arrive
at just compensation. In Susamma Thomas,
this Court stated :

"So the proper method of computation

is the multiplier method. Any departure,
except in
exceptional and extra-ordinary
cases, would introduce inconsistency of
principle, lack of
uniformity and an element of unpredictability, for the assessment of compensation."

9 Basically only three facts need to

be established by the claimants for assessing
compensation in
the case of death : (a) age
of the deceased; (b) income of the deceased;
and the (c) the number of
dependents. The
issues to be determined by the Tribunal to
arrive at the loss of dependency are (i)
additions/deductions to be made for arriving at
the income; (ii) the deduction to be made
towards the
personal living expenses of the
deceased; and (iii) the multiplier to be applied with reference of the
age of the deceased. If these determinants are standardized, there will be uniformity and consistency
in the decisions. There will lesser need for
detailed evidence. It will also be easier for the
insurance
companies to settle accident claims
without delay. To have uniformity and consistency, Tribunals
should determine compensation in cases of death, by the following well
settled steps:
 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 regard to the
amount which
the deceased would have
spent on himself by way of personal and living expenses. The balance,
which is 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
active career, the appropriate
multiplier should be selected. This does not
mean ascertaining the
number of years he
would have lived or worked but for the accident. Having regard to several
imponderables
in life and economic factors, a table of multipliers with reference to the age has
been identified by this Court. The multiplier should be
chosen from the said table with reference
to
the age of the deceased.

Step 3 (Actual calculation)

The annual contribution to the family

(multiplicand) when multiplied by such multiplier gives the
'loss of dependency' to the
family.

Thereafter, a conventional amount in the

range of Rs. 5,000/- to Rs.10,000/- may be
added as
loss of estate. Where 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. But no
amount is to be awarded
under the head of pain, suffering or hardship
caused to the legal heirs
of the deceased.

The funeral expenses, cost of transportation of the body (if incurred) and cost of
any medical
treatment of the deceased before death (if incurred) should also added.

Question (i) - addition to income for future prospects

10 Generally the actual income of the

deceased less income tax should be the starting point for
calculating the compensation.
The question is whether actual income at the
time of death should be
taken as the income
or whether any addition should be made by
taking note of future prospects. In
Susamma
Thomas, this Court held that the future prospects of advancement in life and career should
also be sounded in terms of money to augment the multiplicand (annual contribution
to the
dependants); and that where the deceased had a stable job, the court can take
note of the prospects
of the future and it will
be unreasonable to estimate the loss of dependency on the actual income of
the deceased at the time of death. In that case, the
salary of the deceased, aged 39 years at the
time
of death, was Rs.1032/- per month.
Having regard to the evidence in regard to
future prospects, this
Court was of the view
that the higher estimate of monthly income
could be made at Rs.2000/- as.
gross income
before deducting the personal living expenses.
The decision in Susamma Thomas was
followed in Sarla Dixit v, Balwant Yadav, 1996
(3) SCC 179, where the deceased was
getting a gross
salary of Rs.1543/- per month.
Having regard to the future prospects of promotions and increases,
this Court assumed
that by the time he retired, his earning would
have nearly doubled, say Rs.3000/-.
This
court took the average of the actual income
at the time of death and the projected income if he
had lived a normal life period,
and determined the monthly income as
Rs.2200/- per month. In Abati
Bezbaruah v.
Dy. Director General, Geological Survey of
India, 2003 (3) SCC 148, as against the
actual
salary income of Rs.42,000/- per annum, (Rs.3500/- per month) at the time of
accident, this court
assumed the income as
Rs.45,000/- per annum, having regard to the
future prospects and career
advancement of
the deceased who was 40 years of age.

11 In Susamma Thomas, this Court

increased the income by nearly 100%, in Sarla
Dixit, the income
was increased only by 50%
and in Abati Bezbaruah the income was increased by a mere 7%. In view of
imponderables and uncertainties, we are in favour
of adopting as a rule of thumb, an addition
of 50%
of actual salary to the actual salary
income of the deceased towards future prospects, where the
deceased had a permanent
job and was below 40 years. [Where the annual income is in the taxable
range, the words
'actual salary' should be read as 'actual salary less tax']. The addition should be only
30% if the age of the deceased was 40 to 50
years. There should be no addition, where
the age of
deceased is more than 50 years.
Though the evidence may indicate a different percentage of increase,
it is necessary to
standardize the addition to avoid different
yardsticks being applied or different
methods
of calculations being adopted. Where the
deceased was self-employed or was on a fixed
salary (without provision for annual increments etc.), the courts will usually take only
the actual
income at the time of death. A departure therefrom should be made only in
rare and exceptional cases
involving special
circumstances.

Re : Question (ii) - deduction for personal and living expenses

12 We have already noticed that the

personal and living expenses of the deceased
should be
deducted from the income, to arrive at the contribution to the dependents.
No evidence need be led to
show the actual
expenses of the deceased. In fact, any evidence in that behalf will be wholly
unverifiable and likely to be unreliable. Claimants will
obviously tend to claim that the deceased was
very frugal and did not have any expensive
habits and was spending virtually the entire
income on the
family. In some cases, it may
be so. No claimant would admit that the deceased was a spendthrift,
even if he was one.
It is also very difficult for the respondents in a
claim petition to produce evidence
to show
that the deceased was spending a considerable part of the income on himself or that he
was
contributing only a small part of the income on his family. Therefore, it became necessary to
standardize the deductions to be
made under the head of personal and living
expenses of the
deceased. This lead to the
practice of deducting towards personal and
living expenses of the
deceased, one-third of
the income if the deceased was a married,
and one-half (50%) of the income if
the deceased was a bachelor. This practice was
evolved out of experience, logic and convenience. In
fact one-third deduction, got statutory recognition under Second Schedule to
the Act, in respect of
claims under Section
163A of the Motor Vehicles Act, 1988 ('MV
Act' for short).

13 But, such percentage of deduction

is not an inflexible rule and offers merely a
guideline. In
Susamma Thomas, it was observed that in the absence of evidence, it is
not unusual to deduct one-
third of the gross
income towards the personal living expenses
of the deceased and treat the balance
as the
amount likely to have been spent on the
members of the family/dependants. In
UPSRTC V/s.
Trilok Chandra, 1996 (4) SCC
362, this Court held that if the number of
dependents in the family of the
deceased was
large, in the absence of specific evidence in
regard to contribution to the family, the
Court
may adopt the unit method for arriving at
the contribution of the deceased to his family. By this
method, two units is allotted to
each adult and one unit is allotted to each
minor, and total number of
units are determined. Then the income is divided by the
total number of units. The quotient is
multiplied by two to arrive at the personal living
expenses of the deceased. This Court gave
the
following illustration:

"X, male, aged about 35 years, dies in

an accident. He leaves behind his widow
and 3 minor
children. His monthly income was Rs. 3500. First, deduct the
amount spent on X every month.
The
rough and ready method hitherto
adopted where no definite evidence was
forthcoming, was
to break up the family
into units, taking two units for and adult
and one unit for a minor. Thus X
and
his wire make 2+2=4 units and each
minor one unit i.e. 3 units in all, totaling
7 units. Thus
the share per unit works
out to Rs. 3500/7=Rs. 500 per month.
It can thus be assumed that Rs.
1000
was spent on X. Since he was a working
member some provision for his transport
and out-
of-pocket expenses has to be
estimated. In the present case we estimate the out-of-pocket
expense at Rs.
250. Thus the amount spent on the deceased X works out to Rs. 1250 per
month
per month leaving a balance of
Rs. 3500-1250=Rs.2250 per month.
This amount can be taken as
the monthly
loss of X's dependents."
 In Fakeerappa us Karnataka Cement
Pipe Factory, 2004 (2) SCC 473, while considering the
appropriateness of 50% deduction towards personal and living expenses of
the deceased made
by the High Court, this Court observed:

"What would be the percentage of deduction for personal expenditure cannot

be governed by
any rigid rule or formula
of universal application. It would depend
upon circumstances of each
case. The
deceased undisputedly was a bachelor.
Stand of the insurer is that after marriage, the
contribution to the parents would have been lesser and, therefore,
taking an overall view the
Tribunal and
the High Court were justified in fixing
the deduction."

In view of the special features of the case,

this Court however restricted the deduction towards
personal and living expenses to one-third of the income.

14 Though in some cases the deduction to be made towards personal and living
expenses is
calculated on the basis of units
indicated in Trilok Chandra, the general practice is to apply
standardized deductions. Having considered several subsequent decisions
of this court, we are of the
view that where
the deceased was married, the deduction towards personal and living expenses of the
deceased, should be one-third (1/3rd) where
the number of dependent family members is
2 to 3, one-
fourth (1/4th) where the number
of dependant family members is 4 to 6, and
one-fifth (1/5th) where
the number of dependant family members exceed six.

15 Where the deceased was a bachelor and the claimants are the parents, the
deduction follows a
different principle. In regard to bachelors, normally, 50% is deducted
as personal and living expenses,
because it is
assumed that a bachelor would tend to spend
more on himself. Even otherwise, there is
also
the possibility of his getting married in a short
time, in which event the contribution to the
parent/s and siblings is likely to be cut drastically. Further, subject to evidence to the contrary, the
father is likely to have his own income and will not be considered as a dependant and the mother
alone will be considered as a dependent. In the absence of evidence to the contrary, brothers and
sisters will
not be considered as dependents, because
they will either be independent and earning,
or
married, or be dependant on the father.
Thus even if the deceased is survived by parents and siblings,
only the mother would be
considered to be a dependant, and 50%
would be treated as the personal
and living
expenses of the bachelor and 50% as the
contribution to the family. However, where
family
of the bachelor is large and dependant on the income of the deceased, as in a
case where he has a
widowed mother and
large number of younger non-earning sisters
or brothers, his personal and living
expenses
may be restricted to one-third and contribution to the family will be taken as two-third.

Re :Question (iii) - selection of multiplier

16 In Susamma Thomas, this Court

stated the principle relating to multiplier thus:

"The multiplier represents the number

of years' purchase on which the loss of
dependency is
capitalized. Take for instance a case where annual loss of dependency is Rs. 10,000. If a sum of
Rs. 1,00,000 is invested at 10% annual
interest, the interest will take care of the
dependency,
perpetually, the multiplier
in this case work out to 10. If the rate of
interest is 5% per annum and
not 10%
then the multiplier needed to capitalize
the loss of the annual dependency at
Rupees
10,000 would be 20. Then the
multiplier, i.e. the number of years' purchase of 20 will yield the
annual dependency perpetually. Then allowance to
scale down the multiplier would have to
be
made taking into account the uncertainties of the future, the allowances for
immediate lumpsum
payment, the period over which the dependency is to last
being shorter and the capital feed also
to be spent away over the period of dependency is to last etc., Usually in English Courts the
operative multiplier
rarely exceeds 16 as maximum. This will
come down accordingly as the age
of the
deceased person (or that of the dependents, whichever is higher) goes up."
17 The Motor Vehicle Act, 1988 was
amended by Act 54 of 1994, inter alia inserting Section 163A and
the Second Schedule
with effect from 14.11.1994. Section 163A
of the MV Act contains a special
provision as
to payment of compensation on structured
formula basis, as indicated in the Second
Schedule to the Act. The Second Schedule
contains a Table prescribing the compensation to be
awarded with reference to the age
and income of the deceased. It specifies the
amount of
compensation to be awarded with
reference to the annual income range of
Rs.3,000/- to Rs.40,000/-.
It does not specify
the quantum of compensation in case the
annual income of the deceased is more
than
Rs.40,000/-. But it provides the multiplier to
be applied with reference to the age of the
deceased.
The table starts with a multiplier of
15, goes upto 18, and then steadily comes
down to 5. It also
provides the standard deduction as one-third on account of personal
living expenses of the deceased.
Therefore,
where the application is under section 163A
of the Act, it is possible to calculate the
compensation on the structured formula basis,
even where compensation is not specified with
reference to the annual income of the deceased, or is more than Rs.40,000/-, by applying the formula :
(2/3 x AI x M), that is
two-thirds of the annual income multiplied
by the multiplier applicable to the age
of the
deceased would be the compensation. Several principles of tortious liability are excluded
when
the claim is under section 163A of MV
Act. There are however discrepancies/errors
in the multiplier
scale given in the Second
Schedule Table. It prescribes a lesser compensation for cases where a
higher multiplier of
18 is applicable and a larger compensation
with reference to cases where a lesser
multiplier of 15, 16, or 17 is applicable. From the
quantum of compensation specified in the
table, it is
possible to infer that a clerical error
has crept in the Schedule and the 'multiplier'
figures got wrongly
typed as 15, 16, 17, 18,
17, 16, 15, 13, 11, 8, 5 & 5 instead of 20,
19, 18, 17, 16, 15, 14, 12, 10, 8, 6 and 5.
Another noticeable incongruity is, having prescribed the notional minimum income of non-
earning
persons as Rs. 15,000/- per annum,
the table prescribes the compensation payable even in cases
where the annual income
ranges between Rs.3000/- and Rs.12000/-.
This leads to an anomalous
position in regard to applications under Section 163A of
MV Act, as the compensation will be higher
in
cases where the deceased was idle and not
having any income, than in cases where the
deceased
was honestly earning an income
ranging between Rs.3000/- and Rs.12,000/-
per annum. Be that as it
may.

18 The principles relating to determination of liability and quantum of compensation are different for
claims made under
section 163A of MV Act and claims under
section 166 of MV Act. (See : Oriental
Insurance Co. Ltd. vs. Meena Variyal, 2007 (5)
SCC 428. Section 163A and Second Schedule in terms
do not apply to determination of compensation in applications under Section
166. In Trilok Chandra,
this Court, after reiterating the principles stated in Susamma Thomas, however, held that the operative
(maximum) multiplier, should be increased as 18 (instead of 16 indicated in Susamma Thomas), even
in cases under section 166 of MV
Act, by borrowing the principle underlying
section 163A and the
Second Schedule. This
Court observed:

"Section 163-A begins with a non obstante clause and provides for payment
of compensation, as
indicated in the Second Schedule, to the legal representatives of the deceased or injured, as the
case may be. Now if we turn to the Second Schedule, we find a table fixing the
mode of
calculation of compensation for
third party accident injury claims arising
out of fatal accidents.
The first column
gives the age group of the victims of accident, the second column indicates the
multiplier and the subsequent horizontal figures indicate the quantum of compensation in
thousand payable to the
heirs of the deceased victim. According
to this table the multiplier
varies from 5
to 18 depending on the age group to
which the victim belonged. Thus, under
this
Schedule the maximum multiplier
can be up to 18 and not 16 as was held
in Susamma Thomas
case..... Besides,
the selection of multiplier cannot in all
cases be solely dependent on the age of
the deceased. For example, if the deceased, a bachelor, dies at the age of 45
and his dependents
are his parents, age
of the parents would also be relevant in
the choice of the multiplier......What
 we
propose to emphasise is that the multiplier cannot exceed 18 years' purchase
factor. This is
the improvement over the
earlier position that ordinarily it should
not exceed 16..."

19 In New India Assurance Co. Ltd.

vs. Charlie, 2005 (10) SCC 720, this Court
noticed that in respect
of claims under section 166 of the MV Act, the highest multiplier
applicable was 18 and that the said
multiplier
should be applied to the age group of 21 to
25 years (commencement of normal productive
years) and the lowest multiplier would
be in respect of persons in the age group of
60 to 70 years
(normal retiring age). This was
reiterated in TN State Road Transport Corporation Ltd. vs. Rajapriya,
2005 (6) SCC
236 and UP State Road Transport Corporation vs. Krishna Bala, 2006 (6) SCC 249.
The
multipliers indicated in Susamma Thomas, Trilok Chandra and Charlie (for claims
under section 166
of MV Act) is given below
in juxtaposition with the multiplier mentioned
in the Second Schedule for
claims under section 163A of MV Act (with appropriate deceleration after 50 years) :

Age of Multiplier Multiplier Multiplier Multiplier Multiplier

the scale as scale as scale in specified actu  ally used
deceased envisaged adopted Trilok in second in second
in by Trilok Chandra column Schedule to
Susamma chandra as in the MV Act (as
Thomas clarified Table in seen
from the
in Charlie II quantum of
Schedule compensation)
to MV
Act
(1) (2) (3) (4) (5) (6)
Upto 15 15 20
yrs.
15 to 20 16 18 18 16 19
yrs.
21 to 25 15 17 18 17 18
yrs.
26 to 30 14 16 17 18 17
yrs.
31 to 35 13 15 16 17 16
yrs.
36 to 40 12 14 15 16 15
yrs.
41 to 45 11 13 14 15 14
yrs.
46 to 50 10 12 13 13 12
yrs.
51 to 55 9 11 11 11 10
yrs.
56 to 60 8 10 09 8 8
yrs.
61 to 65 6 08 07 5 6
yrs.
5 05 05 5 5
Above
65 yrs.

20 Tribunals/courts adopt and apply

different operative multipliers. Some follow
the multiplier with
reference to Susamma
Thomas (set out in column 2 of the table
above); some follow the multiplier
with reference to Trilok Chandra, (set out in column
3 of the table above); some follow the multiplier
with reference to Charlie (Set out in column (4) of the Table above); many follow
the multiplier given in
second column of the
Table in the Second Schedule of MV Act (extracted in column 5 of the table
above); and
some follow the multiplier actually adopted
in the Second Schedule while calculating the
quantum of compensation (set out in column
6 of the table above). For example if the deceased is
aged 38 years, the multiplier would
be 12 as per Susamma Thomas, 14 as per
Trilok Chandra, 15 as
per Charlie, or 16 as
per the multiplier given in column (2) of the
Second schedule to the MV Act or 15
as per
the multiplier actually adopted in the second
Schedule to MV Act. Some Tribunals, as in
this
case, apply the multiplier of 22 by taking
the balance years of service with reference to
the retiring
age. It is necessary to avoid this
kind of inconsistency. We are concerned with
cases falling under
section 166 and not under section 163A of MV Act. In cases failing
under section 166 of the MV Act,
Davies
method is applicable.

21 We therefore hold that the multiplier to be used should be as mentioned in

column (4) of the Table
above (prepared by
applying Susamma Thomas, Trilok Chandra
and Charlie), which starts with an
operative
multiplier of 18 (for the age groups of 15 to
20 and 21 to 25 years), reduced by one unit
for
every five years, that is M-17 for 26 to 30
years, M-16 for 31 to 35 years, M-15 for 36
to 40 years, M-14
for 41 to 45 years, and M-
13 for 46 to 50 years, then reduced by two
units for every five years, that is,
M-11 for 51
to 55 years, M-9 for 56 to 60 years, M-7 for
61 to 65 years and M-5 for 66 to 70 years.

Question (iv) - Computation of compensation

22 In this case as noticed above the

salary of the deceased at the time of death
was Rs.4,004, By
applying the principles
enunciated by this Court to the evidence, the
High Court concluded that the
salary would
have at least doubled (Rs.8008/-) by the time
of his retirement and consequently,
determined the monthly income as an average of
Rs.4004/- and Rs.8008/- that is Rs.6006/- per
month
or Rs.72072/- per annum. We find
that the said conclusion is in conformity with
the legal principle that
about 50% can be
added to the actual salary, by taking note of
future prospects.

23 Learned counsel for the appellants

contended that when actual figures as to what
would be the
income in future, are available
it is not proper to take a nominal hypothetical increase of only 50% for
calculating the
income. He submitted that though the deceased was receiving Rs.4004/- per month at
the time of death, as per the certificates issued by the employer (produced before High
Court), on the
basis of pay revisions and increases, his salary would have been
Rs.32,678/- in the year 2005 and
there is no
reason why the said amount should not be
considered as the income at the time of
retirement. It was contended that the income
which is to form the basis for calculation
should not
therefore be the average of
Rs.4004/- and Rs.8008/-, but the average of
Rs.4004/- and Rs.32,678/-.

24 The assumption of the appellants

that the actual future pay revisions should be
taken into account
for the purpose of calculating the income is not sound. As against the
contention of the appellants
that if the deceased had been alive, he would have earned
the benefit of revised pay scales, it is
equally
possible that if he had not died in the accident, he might have died on account of ill
health or
other accident, or lost the employment or met some other calamity or disadvantage. The
imponderables in life are too
many. Another significant aspect is the nonexistence of such evidence at
the time of accident. In this case, the accident and death
occurred in the year 1988. The award was
made by the Tribunal in the year 1993. The
High Court decided the appeal in 2007. The
pendency of
the claim proceedings and appeal for nearly two decades is a fortuitous circumstance and that will
not entitle the appellants to rely upon the two pay revisions which
took place in the course of the said
two decades. If the claim petition filed in 1988 had
been disposed of in the year 1988-89 itself
and if
the appeal had been decided by the
High Court in the year 1989-90, then obviously the compensation
would have been
decided only with reference to the scale of
pay applicable at the time of death and
not
with reference to any future revision in pay
scales. If the contention urged by the claimants is
accepted, it would lead to the following situation: The claimants only could rely
upon the pay scales in
force at the time of the
accident, if they are prompt in conducting the
case. But if they delay the
proceedings, they
can rely upon the revised higher pay scales
that may come into effect during such
pendency. Surely, promptness cannot be punished in this manner. We therefore reject the
contention
that the revisions in pay scale subsequent to the death and before the final
hearing should be taken
note of for the purpose of determining the income for calculating the compensation.

25 The appellants next contended that

having regard to the fact that the family of
deceased consisted
of 8 members including
himself and as the entire family was dependent on him, the deduction on
account of
personal and living expenses of the deceased
should be neither the standard one-third, nor
one-fourth as assessed by the High Court,
but one-eighth. We agree with the contention that the
deduction on account of personal living expenses cannot be at a fixed one-
third in all cases (unless
the calculation is under section 163A read with Second Schedule
to the MV Act). The percentage of
deduction
on account personal and living expenses can
certainly vary with reference to the number
of
dependant members in the family. But as
noticed earlier, the personal living expenses
of the deceased
need not exactly correspond
to the number of dependants. As an earning
member, the deceased
would have spent
more on himself than the other members of
the family apart from the fact that he
would
have incurred expenditure on travelling/transportation and other needs. Therefore we are
of the
view that interest of justice would be
met if one-fifth is deducted as ihe personal
and living expenses
of the deceased. After
such deduction, the contribution to the family (dependants) is determined as
Rs.57,658/- per annum. The multiplier will be 15 having regard to the age of the deceased at the
time
of death (38 years). Therefore the total
loss of dependency would be Rs.57,658 x
15 = Rs.8,64,870/-.

26 In addition, the claimants will be entitled to a sum of Rs.5,000/- under the head of 'loss of estate'
and Rs.5000/- towards funeral expenses. The widow will be entitled to Rs.10,000/- as loss of
consortium. Thus, the total compensation will be Rs.8,84,870/-. After deducting Rs.7,19,624/-
awarded by the High Court, the enhancement would be Rs. 1,65,246/-.

27 We allow the appeal in part accordingly. The appellants will be entitled to the said sum of
Rs.165,246/- in addition to what is already awarded, with interest at the rate of 6% per annum from the
date of petition till the date of realization. The increase in compensation awarded by us shall be taken
by the widow exclusively. Parties to bear respective costs.
 3

2019 (0) AIJEL-SC 63757

SUPREME COURT OF INDIA

Hon'ble Judges:A.K.Sikri and S.Abdul Nazeer JJ.

M.R.Krishna Murthi Versus New India Assurance Co.Ltd.

CIVIL APPEAL No. 2476 of 2019 ; 2477 of 2019 ; *J.Date :- MARCH 05, 2019

MOTOR VEHICLES ACT, 1988 Section - 166

(a) Motor Vehicles Act, 1988 - S. 166 - accident of person not in actual employment - determination
of compensation - where victim of accident is not an earning person but a student, while assessing
the compensation for loss of future earning, focus of examination would be the career prospect and
the likely earning of such a person in future.(Para 23)

(b) Motor Vehicles Act, 1988 - S. 166 - motor accident - death - compensation - loss of future
income - relevant factors - victim was student at the time of accident not an earning person -
appellant belongs to a family of lawyers as both his parents were senior lawyers practicing in
Supreme Court - because of his family background, appellant also wanted to join legal profession -
even though at the time of accident, he was studying in school - having regard to affluent family
background, appellant at time of accident was studying in prestigious Modern School, having bright
future and his future earnings could not be considered without keeping in view said facts - victim
also produced evidence in respect of his disability - his movements are restricted and he needs
driver as he is not in position to drive car himself - though, not very seriously, functional capacity has
been impaired because of disability suffered by appellant as appellant cannot run around like other
young Advocates of his age - in case of appellant, loss of future earning can be fixed at Rs. 5,000/-
per month i.e. Rs.60,000/- per annum on which multiplier of 18 is to be applied - loss of future
earning fixed to Rs. 10,80,000 - appellant, thus, would be paid another sum of Rs. 6,54,000/- under
this head along with interest as awarded by Court below. (Para 24,26)

(c) Road Accidents and Safety Measures - compensation - speedy disposal of cases by MACTs -
direction given for establishing Motor Accident Mediation Authority(MAMA) - whatever steps are
taken by authorities for reducing road accidents, harsh reality is that accidents would keep on
happening - there may be a possibility of reducing number of road accidents, but occurrence thereof
cannot be totally eliminated - such accidents, particularly fatal accidents, would always lead to filing
of claims by victims or kith and kin of victims, for compensation - there is need to resolve such
disputes at earliest inasmuch as compensation money may be badly needed by claimants for many
reasons and delay may bring insurmountable sufferings of various kind - suggestion by appellant of
establishing Motor Accident Mediation Authority is laudable - Court recommended Government to
examine feasibility of setting up Motor Accident Mediation Authority in by making necessary
amendment in Motor Vehicle Act - Government to also consider the feasibility of enacting Indian
Mediation Act to take care of various aspects of mediation in general. (Para 27,28,39)

Imp.Para: [ 23 ] [ 24 ] [ 26 ] [ 27 ] [ 28 ] [ 39 ]
Cases Referred To :

1. Jaiprakash V. National Insurance Company, SLP(Civil) No. 11801-11804 of 2005. D:d. 13.5.2016
2. N. Manjegowda V. Manager, United India Insurance Company Limited, 2014 3 SCC 584 : 2013
(13) Scale 642 : JT 2014 (3) 44 : 2013 (12) SCR 350 : 2013 (132) AIC 1
3. New India Assurance Co. Ltd. V. Ganga Devi, MAC. APP. No. 135 of 2008. D:d. 23.11.2009
4. Punjab National Bank V. Indian Bank, 2003 6 SCC 79 : 2003 AIR SC 2284 : 2003 (4) Scale 267 :
JT 2003 (4) 144 : 2003 (3) SCR 836
5. Rajesh Tyagi V. Jaibir Singh, FAO Nos. 842 and 843 of 2003. D:d. 16.12.2009
6. United India Insurance Co. Ltd. V. Patricia Jean Mahajan, 2002 6 SCC 281 : 2002 AIR SC 2607 :
2002 (5) Scale 56 : JT 2002 (5) 74 : 2002 (3) SCR 1176

Cases Relied on :

1. Arun Sondhi V. Delhi Transport Corporation, 2001 0 ACJ 1779

2. Arvind Kumar Mishra V. New India Assurance Co. Ltd., 2010 10 SCC 254 : 2010 (10) Scale 298 :
JT 2010 (10) 254 : 2010 (11) SCR 857 : 2010 AIR SCW 6085
3. Oriental Insurance Company Limited V. Deo Patodi, 2009 13 SCC 123 : 2009 AIR SC 2442 : 2009
(8) Scale 194 : JT 2009 (8) 332 : 2009 AIR SCW 4559
4. Raj Kumar V. Ajay Kumar, 2011 1 SCC 343 : 2010 (12) Scale 265 : 2010 (13) SCR 179 : 2011 (1)
SCC(Cri) 1161 : 2011 (98) AIC 251
5. Sarla Verma V. Delhi Transport Corporation, 2009 6 SCALE 129 : 2009 (6) SCC 121 : 2009 AIR SC
3104 : 2009 (6) Scale 129 : JT 2009 (6) 495

Equivalent Citation(s):
2020 (15) SCC 493 : AIR 2019 SC 5625

JUDGMENT :-

A.K.SIKRI, J.

1 Leave granted.

2 The appellant herein, who is a practicing advocate, had suffered in nasty

accident at the young age
of 18 years. He was a student at that time studying in
Modern School, Delhi. It was 26th May, 1988. He
was travelling along with his
mother from Delhi to Mussoorie to celebrate his 18th birthday falling on
27th
May, 1988. On Delhi-Dehradun highway the accident took place in which his
entire left leg was
crushed. He was rushed to the hospital and his hospitalization
continued for over two months. He had
to undergo surgery for which he was
operated on 31st May, 1988. Though, the appellant was
discharged from the
hospital after two months, his treatment continued for over 6 years, during
which
period he had to undergo further operations. In all, three surgeries were
performed. First, for putting
plates and screws, another for removal of plates
and screws wherein doctor discovered that he could
not remove the plates and
screws of femur bone. The result is that even today the said screws and
plates in
the femur bone remain planted. This exposes him to the risk of another fracture
anytime. The
third operation was for removal of a lump in the right leg which
had developed after the accident and
had grown over the years.

3 As per the appellant, the net result of the aforesaid accident of such severity is
that he is suffering
permanent disability (pain and difficulty in locomotion)
even today. This disability is certified by the
District Government Hospital,
Muzaffarnagar at 40%, as per the disability certificate dated 10th
December,
2005 (Exh. PW-4/103).

4 The appellant filed an application claiming compensation before Motor

Accidents Claims Tribunal
(MACT), Muzaffarnagar, U.P. as the accident took
place in the area within the jurisdiction of the said
MACT. However, on his
application for transfer of the said claim petition, this Court passed orders
dated
12th January, 1998 transferring the case to MACT, Patiala House, New Delhi.
The MACT, after
conclusion of the trial, rendered its award dated 23rd May,
2007 attributing negligence to the driver of
the ambassador car which had hit
the vehicle in which the appellant was travelling. As the accident
occurred due
to the negligence of the said driver (Respondent no. 4 in MACT case), and the
offending
vehicle was insured with Respondent no. 1, namely, New India
Assurance Company Limited, the
liability was fastened on the Insurance
Company, the driver of the vehicle as well as the owner of the
vehicle who also
arrayed as respondents. The MACT, thereafter, dealt with the issue of quantum
of
compensation and awarded a sum of Rs. 8,48,000/-, the breakup of which is
as under:

"Pain and sufferings  Rs. 50,000/-

   

Medicines  Rs. 2,10,000/-

   

Special Diet  Rs. 15,000/-

   

Conveyance  Rs. 15,000/-

   

Compensation on account  Rs. 4,08,000/-

   

of loss of income adopting  Rs. 75,000/-

multiplier of 18 permanent
 
 

disability attendant  Rs. 25,000/-

   

loss of enjoyment  Rs. 50,000/-

   

Total  Rs. 8,48,000/-"

 

5 The MACT also awarded interest @7% for a period of 10 years, inter alia,
taking note of the fact that
the claim petition has been dismissed in default
twice.

6 The appellant filed the appeal thereagainst before the High Court. However,
when it was taken up for
hearing, nobody appeared on behalf of the appellant.
Going by the fact that on several consecutive
dates the appellant was not
represented and remained absent, instead of dismissing the appeal in
default, the
High Court decided the matter on merits after hearing the counsel for the
Insurance
Company and on perusing the record.

7 Main contention of the appellant in appeal was that MACT had failed to take
into account the
disability certificate which showed that the appellant had
suffered permanent disability to the extent
of 40%. This submission is rejected
by the High Court with the observations that the MACT had, in
fact, calculated
the loss of future income on the basis of inference that the claimant has suffered
functional disability to the extent of 40% corresponding to affecting his earning
capacity. The High
Court also took note of the income tax returns which were
filed by the appellant for the periods 2003-
04, 2004-05, 2005-06. However, as
per the High Court, these income tax returns were irrelevant and
could not be
taken into consideration as accident occurred way back in the year 1988 and,
therefore,
compensation had to be fixed with reference to the date of the
accident when the claimant was a boy
of 18 years only. Instead, only addition
is made by the High Court, that too on some other count. It has
noted that the
appellant would require services of a driver till he attains age of 70 years, which
is a
normal expected lifespan. Though, no evidence was led in support of this
claim, the High Court has
awarded an additional lumpsum damages in the sum
of Rs. 50,000/- on this account, given the nature
of disability and physical
disfigurement suffered by the appellant.

8 The appellant, thereafter, preferred a review petition under Order LXVII Rule 1
of the Code of Civil
Procedure seeking review of the judgment dated 17th May,
2016 rendered by the High Court. It was
pointed out that there was an error
committed by the MACT as it had applied the multiplier of 17,
whereas
multiplier of 18 should have been adopted while calculating the compensation
towards loss
of income, going by the fact that the appellant was only 18 years
of age when he suffered the injuries.
This plea has been accepted by the High
Court thereby applying the multiplier of 18, instead of 17
which has resulted in
enhancement of compensation by Rs.24000/- together with corresponding
interest. Main judgment dated 17th May, 2016 as well as order dated 19th May,
2017 passed in review
petition are the subject matters of the present appeals.

9 Mr. Arun Mohan, learned senior counsel appearing for the appellant has made
two-fold submissions
which are paraphrased in the following manner:

(i) In the first instance, it is submitted that the MACT as well as the High
Court have erred in
computing the future earning by fixing the income at the
rate of Rs.5000/- only while assessing
the loss of future earnings. No doubt,
submitted the learned senior counsel, the appellant was
only a student and,
therefore, there was no real earning at that stage. Only future prospects can
be
taken into consideration, as per the law laid down by this Court in a series of
judgments.
However, submission of learned senior counsel was that while
assessing the loss of future
earning, the Court should have regard to the family
background of the victim, the institution in
which he is getting education, his
potential to adopt the career he desired to choose, career
prospects in view of
attendant circumstances etc. In this hue, Mr. Arun Mohan submitted that
the
appellant belongs to a family of lawyers as both his parents were senior lawyers
practicing in
Supreme Court. Because of this family background, the appellant
also wanted to join legal
profession. Though, at the time of accident, he was
studying in school, after school he intended
to pursue his studies in law. He, in
fact, did law and has joined the legal profession, which fact
was placed on
record, as by the time the appellant became a lawyer the case before MACT
was
still pending. Further, having regard to affluent family background, the
appellant at the time of
accident was studying in prestigious Modern School,
Barakhamba Road, New Delhi. All these
circumstances clearly indicated that
the appellant had a bright future and, therefore, his future
earnings could not be
considered without keeping in view the aforesaid factors. In such
circumstances, loss of future earning prospects by treating the future earnings at
the rate of
Rs.5000/- only was abysmally low. He also submitted that though in
the review petition filed
 before the High Court, specific ground to this effect
was taken, it has not even been considered
by the High Court.

(ii) Second submission of Mr. Arun Mohan was a passionate plea aimed at
reforming the system
at following levels:

(a) On-road safety and grant of adequate compensation to the

victims without any delay. For
ensuring expeditious settlement of
claims, resort to alternate means which may include
innovative
measures.

(b) Taking adequate steps including adopting innovative

measures, to ensure fast track disposal
of cases by MACTs.

(c) Ensuring receipt of compensation in the safe hands of

victims and/or kiths and kins of
victims, that too over a sustained
period.

10 Detailed submissions on these aspects and suggestions of Mr. Arun

Mohan are as under:

"Road Safety and Compensation

IT is perceived that of road accidents (1,40,000 dead per year and 5,00,000 injured per year), less
than 10% reach the MACT with claims. Almost 90% do not have Access to Justice.

And of the 10% or so who do reach MACT, the questions arise:

1. What is the `Cost' to the State judiciary and insurance sector for adjudication of these claims?

2. What are the time delays?

3. On what income source do the dependents/injured survive during pendency till the payout?

4. Of the ultimate payout, how much actually reaches the recipients and how much is lost?

5. After, say, five years of receiving the compensation, what actually remains with the majority of
the recipients?

These were some disturbing questions on a ground level survey.

Put differently, firstly, as most are poor, there is hardly any access to justice; the court resources
are wasted; there are delays and difficulties and slicing away (cut) from the payout; and little
safety for the money that is received.

As a Solution to these problems, there are two proposals:

1. establishing a Motor Accidents Mediation Authority (MAMA) in every district;

2. making it compulsory for the accident investigator to:

(a) send a copy of his Report to MAMA;

(b) send e-mail to National Road Safety Council's cell identifying the accident spot and how
similar accidents could be prevented in future.

MAMA will follow the following procedure:

 1. MAMA will then issue notices to the claimants and other 

2. interim compensation (with recourse) of few thousand rupees a month pending adjudication
as direct credit to Aadhaar linked bank account;

3. completion of paperwork at MAMA;

4. mediation proceedings at MAMA;

5. complete safety in the hands of the recipient.

The amount settled is not given as rupees (or even FDRs), but as Annuity Certificates, which
have more return for the same value-meaning lesser payout by the insurance sector with full
receipt by the claimant."

11 He further submitted that this Court may consider a direction to the

Government to frame these
procedures and schemes. LIC/RBI can provide for
availability of Annuity Certificates in consultation
with the Pension Fund
Regulatory and Development Authority and the commercial Banks/insurance
companies.

12 To facilitate appreciation and implementation, he gave two flowcharts as

below:

13 In the Flowchart-1 (under the existing law), a direction from this Court is
sought to all MACTs to
compulsorily refer motor accident cases to the District
Mediation Authority which will serve the
purpose till the Government amends
the Statute. Flowchart - 2 shows where the amended statute and
the rules can
provide for establishing a Motor Accident Mediation Authority (MAMA) in
every district in
the country. He also suggested that rules can provide for every
accident investigator to send
information to : (1) MAMA; and (2) National
Road Safety Council s Cell.

14 Speaking with an optimist tone, Mr. Mohan submitted that there is a hope
that with a provision for
MAMA:

(1) access to justice will substantially increase;

(2) the court costs will reduce;

(3) insurance sector costs (as payout) will reduce;

(4) Annuity Certificates of the payout will nearly eliminate the slicing
away ; and

(5) the actual benefit to the recipients will be far more (with Annuity
Certificates) than it is at
present.

15 Mr. Salil Paul, learned counsel appearing for the Insurance Company
advanced his argument on the
quantum of compensation based on future
prospective. His submission was that the yardstick
adopted by the courts below
in fixing the income based on future prospective on the basis of which
compensation is given to the appellant is in tune with various judgments
rendered by this Court as
well as the High Court. Therefore, no interference was
called for, insofar as grant of compensation is
concerned. He referred to certain
judgments in support.

16 With reference to the second submission of Mr. Arun Mohan, Mr. Salil
Paul gave a positive
response with the plea that since suggestions given by Mr.
Arun Mohan were in larger public interest
for reformation of the system, he had
no objection if the Court issues appropriate directions in this
behalf. At the
same time, he also pointed out that insofar as speedy disposal of cases and
payment of
compensation to the victims, particularly, young victims are
concerned, the High Court of Delhi had
given directions on the basis of which
Claims Tribunal Agreed Procedure was approved by High Court
of Delhi.
Modified version thereof has now been approved as recent as on 7th December,
2018 which
takes care of the speedy disposal as well as periodical payments to
be made to the young victims
over a period of time. Mr. Salil Paul placed on
record the relevant judgments as well as Modified
Claims Tribunal Agreed
Procedure approved by the Delhi High Court vide orders dated 7th December,
2018.

17 We now proceed to discuss the merits of the aforesaid two proposition

advanced before us.

(I) Assessment of Compensation:

Admittedly, the appellant was a student studying in a school. He was not

doing any job or was in
any vocation and, thus, was not earning anything. The
loss of future earning is to be assessed on
the aforesaid basis. Before adverting
to the arguments that are raised by Mr. Arun Mohan and
taken note of above, it
would be appropriate to scan through certain judgments cited before us
by both
the parties in order to decipher the principles for determining loss of future
earning in
such circumstances. First case which we would like to refer is the
judgment in the case of
Arvind Kumar Mishra v. New India Assurance Co.
Ltd., (2010) 10 SCC 254. In that case also, the
appellant who was a victim of
accident, was a student. He was in the final year of engineering
which he was
doing from a reputed college. He had a brilliant academic record, having
passed
all semester examinations with distinction. In the accident that took
place, the appellant
suffered multiple injuries which led to 70% permanent
disability. This disability rendered him
incapacitated which had the
consequence of dashing forever his dream of becoming
Mechanical Engineer,
studies for which career he had undertaken. On the aforesaid facts, his
future
earning were assessed at Rs.60,000/- per annum by taking salary and
allowances payable
to Assistant Engineer in public employment. This future
earning was discounted at 30% on the
basis of which multiplicand was taken at
Rs.42,000/- per annum. Going by his age which was 25
years at the time of
accident, multiplier of 18 was applied and on that basis, compensation
towards
loss of future earning was assessed at Rs.7,56,0000/-.

Second case to which reference is made is Oriental Insurance Company

Limited v. Deo Patodi &
Ors., (2009) 13 SCC 123. Here, the victim was a
brilliant student and while a student, he was also
earning Rs.80,000/- per month
in a job on part-time basis in the United Kingdom. He had not
accepted a job
offered by a US based company at a salary of Rs.18 lakhs per annum.
However,
at the time of accident, he was not working. Accident took place on
June 12, 2003 when he was
22 years of age. He suffered head injuries which
proved fatal and he died within six days i.e. on
June 18, 2003. While
computing the compensation under the head loss of dependency (he was
the
only son of the claimant), the Tribunal as well as the High Court held that the
deceased
would have earned only Rs.18,000/- per month. This Court, in appeal,
however, considered the
aforesaid estimation of income to be on lower side and
the Court decided to fix the earning at
Rs.25,000/- per month, which was 1/3rd
of the amount that he was receiving in the United
Kingdom. The relevant
discussion in this behalf runs as under:

"8. The question in regard to the calculation of loss of dependency, it is

trite, would vary from
case to case. The fact that the deceased was a
brilliant student is not in dispute. He had
graduated in Business
Administration in the UK. Even as a student, in a job on a part-time basis
he was being paid a salary of Rs 80,000 per month (UK �1008.31). He
paid his income tax even
in the UK. After his graduation, he came back
to India. He was offered a job as EU Controller by
GOA LLC, a
company based in Chicago, USA at an annual salary of Rs 18 lakhs (i.e.
$41,600).
However, when the accident took place he was not working;
having not accepted the said offer.
He was still a student. It would have
been hazardous for the Tribunal to calculate the amount of
compensation
towards the loss of dependency on that basis.

9. The Tribunal and the High Court, however, in our opinion, keeping in
view the aforementioned
backdrop might not be correct in holding that
he would have earned only Rs 18,000 per month. It
is true that the cost
of living in the western countries would be higher. The standard of living
in
the western countries cannot be followed; in the absence of any
material placed before this
Court it should not be followed in India. Even
in a case where the victim of an accident was
earning salary in US
dollars, this Court opined that a lower multiplier should be applied.

10. In United India Insurance Co. Ltd. v. Patricia Jean Mahajan [(2002)
6 SCC 281] this Court
held: (SCC pp. 294-95, paras 19-20)

19. In the present case we find that the parents of the deceased
were 69/73 years. Two
daughters were aged 17 and 19 years. The
main question, which strikes us in this case is that in
the given
circumstances the amount of multiplicand also assumes relevance.
The total amount
of dependency as found by the learned Single
Judge and also rightly upheld by the Division
Bench comes to
2,26,297 dollars. Applying multiplier of 10, the amount with
interest and the
conversion rate of Rs 47, comes to Rs 10.38 crores
and with multiplier of 13 at the conversion
rate of Rs 30 the
amount comes to Rs 16.12 crores with interest. These amounts are
huge
indeed. Looking to the Indian economy, fiscal and financial
situation, the amount is certainly a
fabulous amount though in the
background of American conditions it may not be so. Therefore,
where there is so much of disparity in the economic conditions and
affluence of the two places
viz. the place to which the victim
belongs and the place where the compensation is to be paid, a
golden balance must be struck somewhere, to arrive at a
reasonable and fair mesne. Looking by
the Indian standards they
may not be much too overcompensated and similarly not very
much
under compensated as well, in the background of the country
where most of the dependent
beneficiaries reside. Two of the
dependants, namely, parents aged 69/73 years live in India, but
four of them are in the United States. Shri Soli J. Sorabjee
submitted that the amount of
multiplicand shall surely be relevant
and in case it is a high amount, a lower multiplier can
appropriately be applied. We find force in this submission.

20. The court cannot be totally oblivious to the realities. The

Second Schedule while prescribing
the multiplier, had maximum
income of Rs 40,000 p.a. in mind, but it is considered to be a safe
guide for applying the prescribed multiplier in cases of higher
income also but in cases where
the gap in income is so wide as in
the present case income is 2,26,297 dollars, in such a
situation, it
cannot be said that some deviation in the multiplier would be
impermissible.
Therefore, a deviation from applying the multiplier
as provided in the Second Schedule may have
to be made in this
case. Apart from factors indicated earlier the amount of
multiplicand also
becomes a factor to be taken into account which
in this case comes to 2,26,297 dollars, that is
to say an amount of
around Rs 68 lakhs per annum by converting it at the rate of Rs 30.
By
Indian standards it is certainly a high amount. Therefore, for
the purposes of fair compensation,
a lesser multiplier can be
applied to a heavy amount of multiplicand.

The said decision, however, to some extent was clarified by this Court in
Punjab National Bank v.
Indian Bank [(2003) 6 SCC 79] .

11. It is in the aforementioned situation, we are of the opinion that the

fair amount of
compensation should have been calculated at Rs 25,000
per month being about one-third of the
amount which he was receiving
in the UK.
18 We may also take note of one judgment of High Court of Delhi in MAC. APP. No.
135 of 2008 titled
New India Assurance Co. Ltd. v. Ganga Devi & Ors. decided on
November 23, 2009. In that case also,
accident resulted in death of the victim, named, Dr.
Brij Mohan. He was 24 years of age at the time of
accident and had completed his
MBBS. He was doing one year internship and was getting stipend of
Rs.5,000/-
per month. The deceased had cleared the UPSC examination for the post of
Medical Officer
and was scheduled to be appointed as Medical Officer after
completing the internship. Evidence of
PW-2, Senior Assistant of the Hospital,
where the deceased was interning, was produced who
deposed that after
completing his internship, there was a possibility of getting absorbed as Junior
Resident Doctor in the same hospital at salary of Rs.18,000/- to Rs.20,000/- per
month.

19 The Tribunal took the view that the aforesaid evidence was insufficient to
prove the income.
Accordingly, it took the minimum wages of a graduate
worker as Rs.3,543/- per month and added 50%
towards inflation and rise in
price index. From this, 1/3rd was deducted towards personal expenses
and
multiplier of 11 was applied to compute the loss of dependency at
Rs.9,35,352/-. The High Court
set aside the order of the Tribunal holding that
evidence of PW-2 was believable. On that basis,
income was taken at
Rs.18,000/- per month to which 50% was added towards future prospects,
following the judgment of this Court in Sarla Verma v. Delhi Transport
Corporation, (2009) 6 SCALE
129. Deduction towards personal expenses was
made on which multiplier of 13 was applied.

20 The aforesaid cases are of all those victims who were students at the time
of accident and were
not in actual employment. In addition, Mr. Arun Mohan
had also referred to the judgment in N.
Manjegowda v. Manager, United India
Insurance Company Limited, (2014) 3 SCC 584, where victim of
an accident
was a young advocate aged about 36 years. In the accident, he sustained whole
body
disability of 50%. This judgment is cited for the purpose of showing
principle laid down by the Court in
determining the loss of earning capacity of
an advocate who suffers disability in an accident. The
Tribunal had assessed
the loss of future income due to disability at Rs.6,17,500/- per annum. The
High Court reduced the same to Rs.1,50,000/-. This Court noted that due to the
said accident, the
appellant had suffered partial sensory loss all over his limbs
and there was lack of proper
coordination in all four limbs. He needed an
assistance for daily routine work. This kind of disability, in
the opinion of the
Court, hindered his ability to practice as an advocate and compete with others in
the
field of legal profession. He was bound to suffer huge professional loss in
the said condition. This
Court, in the aforesaid circumstances, took the view
that loss of future income fixed at Rs.6,17,500/-
did not require any deduction.
On the contrary, the loss of earning should be treated as 70% and the
appropriate multiplier should be 16 in place of 13. On that basis, the loss of
income due to disability
needed enhancement from Rs.6,17,500/- by at least
Rs.4,00,000/- and the compensation under the
head loss of income due to
disability was worked out accordingly.

21 It would be also appropriate to take note of certain judgments dealing

with the assessment of loss
of future earnings on account of disability suffered
as a result of accident, even when these cases
pertain to those victims who were
having their earnings, as these cases would throw light on the
general principles
which were laid down for assessing such a loss.

22 In the case of Raj Kumar v. Ajay Kumar & Anr., (2011) 1 SCC 343,
where the victim suffered 45%
disability to left lower limb and permanent
functional disability of 25%, the Court held that it is a
functional disability
which would be the operative criteria for assessing the loss of future earnings
and
not physical disability. There is a detailed and lucid discussion of
assessment of future loss of earning
due to permanent disability, covering all
possible facets and discussing every nuance of the subject
matter. After
explaining the meaning of permanent disability and contrasting it with
temporary
disability and also the manner in which permanent disability of
different limbs expressed by Doctors in
the Disability Certificates is to be
interpreted, the Court clarified that the assessment of compensation
under the
head of loss of future earnings would depend upon the effect and impact of such
permanent disability on his earning capacity. The manner in which the
assessment is to be carried out
is contained in the following passages in the said
judgment:

"12. Therefore, the Tribunal has to first decide whether there is any
permanent disability and, if
so, the extent of such permanent disability.
This means that the Tribunal should consider and
decide with reference
to the evidence:

(i) whether the disablement is permanent or temporary;

(ii) if the disablement is permanent, whether it is permanent total

disablement or permanent
partial disablement;

(iii) if the disablement percentage is expressed with reference to any

specific limb, then the
effect of such disablement of the limb on the
functioning of the entire body, that is, the
permanent disability suffered
by the person.

If the Tribunal concludes that there is no permanent disability then there

is no question of
proceeding further and determining the loss of future
earning capacity. But if the Tribunal
concludes that there is permanent
disability then it will proceed to ascertain its extent. After the
Tribunal
ascertains the actual extent of permanent disability of the claimant based
on the
medical evidence, it has to determine whether such permanent
disability has affected or will
affect his earning capacity.

13. Ascertainment of the effect of the permanent disability on the actual

earning capacity
involves three steps. The Tribunal has to first ascertain
what activities the claimant could carry
on in spite of the permanent
disability and what he could not do as a result of the permanent
disability
(this is also relevant for awarding compensation under the head of loss of
amenities of
life). The second step is to ascertain his avocation,
profession and nature of work before the
accident, as also his age. The
third step is to find out whether (i) the claimant is totally disabled
from
earning any kind of livelihood, or (ii) whether in spite of the permanent
disability, the
claimant could still effectively carry on the activities and
functions, which he was earlier carrying
on, or (iii) whether he was
prevented or restricted from discharging his previous activities and
functions, but could carry on some other or lesser scale of activities and
functions so that he
continues to earn or can continue to earn his
livelihood.

xx xx xx

19. We may now summarise the principles discussed above:

(i) All injuries (or permanent disabilities arising from injuries), do not
result in loss of earning
capacity.

(ii) The percentage of permanent disability with reference to the whole

body of a person, cannot
be assumed to be the percentage of loss of
earning capacity. To put it differently, the percentage
of loss of earning
capacity is not the same as the percentage of permanent disability (except
in
a few cases, where the Tribunal on the basis of evidence, concludes that
the percentage of loss
of earning capacity is the same as the percentage of
permanent disability).

(iii) The doctor who treated an injured claimant or who examined him
subsequently to assess
the extent of his permanent disability can give
evidence only in regard to the extent of
permanent disability. The loss of
earning capacity is something that will have to be assessed by
the Tribunal
with reference to the evidence in entirety.
 (iv) The same permanent disability may result in different percentages of
loss of earning
capacity in different persons, depending upon the nature of
profession, occupation or job, age,
education and other factors.

23 From the conjoint reading of the aforesaid judgments, inter alia, following principles
can be culled
out which would be relevant for deciding the instant appeal:

(i) In those cases where the victim of the accident is not an earning person but a student,
while
assessing the compensation for loss of future earning, the focus of the examination
would be
the career prospect and the likely earning of such a person in future. For example,
where the
claimant is pursuing a particular professional course, the poseer would be: what
would have
been his income had he joined a service commensurating with the said course.
That can be the
future earning.

(ii) There may be cases where the victim is not, at that stage, doing any such course to get
a
particular job. He or she may be studying in a school. In such a case, future career would
depend
upon multiple factors like the family background, choice/interest of the complainant
to pursue a
particular career, facilities available to him/her for adopting such a career, the
favourable
surrounding circumstances to see which would have enabled the claimant to
successfully pick
up the said career etc.

If the chosen field is employment, then the future earning can be taken on the basis of
salary
and allowances which are payable for such calling. In case, career is a particular
profession, the
future earning would depend on host of other factors on the basis of which
chances to achieve
success in such a profession can be ascertained.

(iii) There may be cases like Deo Patodi where even a student, the claimant
would have made
earnings on part-time basis or would have received offer for a
particular job. In such cases,
these factors would also assume relevance.

(iv) After ascertaining the likely earning of the victim in the aforesaid
manner, the nature of
injuries and disability suffered as a result thereof would
be kept in mind while determining as to
how much earning has been affected
thereby. Here, impact of injuries on functional disability is
to be seen. In case
of death of victim, it would result in total loss of earning. In the case of
injuries, the nature of disability becomes important. Such an exercise was
undertaken in N.
Manjegowda case.

24 The relevant factors which are brought on record by the learned senior
counsel for the appellant
are these: the appellant belongs to a family of lawyers
as both his parents were senior lawyers
practicing in the Supreme Court.
Because of his family background, the appellant also wanted to join
legal
profession, even though at the time of accident, he was studying in school.
Having regard to
affluent family background, the appellant at the time of
accident was studying in prestigious Modern
School, Barakhamba Road, New
Delhi. All these circumstances clearly indicated that the appellant had
a bright
future and, therefore, his future earnings could not be considered without
keeping in view the
aforesaid factors. The appellant also produced evidence in
respect of his disability. This disability
does not indicate much loss of prospects
in earning as it is similar to N. Manjegowda case. Of course,
his movements
are restricted and he needs a Driver as he is not in a position to drive the car
himself.
This would hinder the earning capacity to some extent, though not
significant extent.

25 From the judgment of the MACT, we find that, on this aspect, it has
followed judgment of Arun
Sondhi v. Delhi Transport Corporation,
(2001) ACJ 1779 and has awarded the compensation at
Rs.4,08,000/-.
It has also added Rs.75,000/- on account of 40% permanent disability
on the ground
that apart from resulting in loss of income, it has severe
impact on the life of the appellant as a whole.
The figure of
Rs.4,08,000/- is calculated in the following manner:

"42. Learned counsel for petitioner has argued at length that a

substantial amount of
compensation is required to be awarded to the
petitioner on account of loss of earning capacity
in future. It has been
stated that on account of injuries suffered in the accident the income of
the
petitioner has reduced to 60% of what he could have earned
otherwise. I consider that this
argument raised by learned counsel for the
petitioner cannot be accepted. The petitioner was
student at the time of
accident. He started his career after around 5 years of accident. I do not
say that the injuries did not have an adverse impact on the petitioner, but
to quantify the same in
the manner claimed by the petitioner may not be
just. In this regard, I consider that the guidance
can be taken from the
case of Arun Sondhi v. Delhi Transport Corporation, 2001 ACJ 1779.
In
this case, the injured was a student of 21 years and he had suffered
disability of 100%. In L.P.A.
the loss of future earning was assessed at
Rs.5000/- p.m. and after adopting multiplier of 16
compensation of
Rs.10,80,000/- was allowed. If the same principle is adopted and future
earning is taken at Rs.5000/- p.m. and the disability of 40%, the monthly
loss of income comes
to Rs.2000/- p.m. or Rs.24,000/- p.a. It is a settled
proposition that in the case of permanent
disability the multiplier is to be
adopted according to the age at the time of trial. In this case
adopting
this principle if the multiplier of 17 is adopted the compensation on
account of loss of
future income comes to Rs.24,000/- x 17 =
Rs.4,08,000/-.

26 As can be seen from the above, loss of future earning is assessed

at Rs.2,000/- per month or
Rs.24,000/- per annum. In the process, the
MACT has not considered future prospects having regard
to the relevant
facts pointed out above which should have been taken into
consideration. At the same
time, it is the functional disability which has
to be kept in mind. Though, not very seriously, the
functional capacity
has been impaired because of the disability suffered by the appellant as
the
appellant cannot run around like other young advocates of his age.
Going by the overall
circumstances, we are of the opinion that in case of
the appellant, loss of future earning can be fixed
at Rs.5,000/- per month
i.e. Rs.60,000/- per annum on which multiplier of 18 is to be applied.
Calculated in this manner, the loss future earning comes to
Rs.10,80,000/-. The appellant, thus, would
be paid another sum of
Rs.6,54,000/- under this head along with interest as awarded by the
Court
below. We may place on record the statement of Mr. Arun Mohan
that the appellant has volunteered to
give this amount to any
Government or public charitable organisation working towards road
safety. We
appreciate this gesture of the appellant. We leave it to the
appellant to donate the amount to any
particular organisation of his
choice. Alternatively, it can also be given for MAMC project by the
appellant. Choice would entirely be that the appellant.

(II) With this, we advert to the second proposition advanced by Mr. Arun Mohan. At the
outset,
we would like to point out that this aspect pertains to the reforms that can be brought
insofar as
payment of compensation to the victims of road accidents is concerned. We would
also like to
commend the suggestions given by Mr. Arun Mohan to bring about such reforms
which are
visionary in nature. The two aspects which he has highlighted are taken up for
discussion in
seriatim.

(A) ROAD SAFETY AND COMPENSATION:

27 Focus here is to ensure access to justice for road accident victims and also to bring
about a
mechanism which prevents delays and other obstacles in awarding compensation to
road accident
victims. The suggestion of Mr. Arun Mohan for establishing a MAMA in every
District is worthy of
acceptance. Whatever steps are taken by the authorities for reducing
road accidents, harsh reality is
that accidents would keep on happening. There may be a
possibility of reducing the number of road
accidents, but occurrence thereof cannot be
totally eliminated. Such accidents, particularly fatal
accidents, would always lead to filing of
claims by the victims and/or kith and kin of victims, for
compensation. Fatal accidents also
trigger prosecution of the driver who was negligent and rash in
driving which caused the
accident. Insofar as disputes regarding claims are concerned, there is a need
to resolve the
same at the earliest inasmuch as compensation money may be badly needed by the
claimants
for so many reasons and delay may bring insurmountable sufferings of various kind. Having
regard to the fact that large number of accidents are giving rise to phenomenal quantum jump
in such
cases, methods need to be adopted for quick resolution. Here, mediation as a concept
of dispute
resolution, even before dispute becomes part of adversarial adjudicatory process,
would be of great
significance. Advantages of mediation are manifold. This stands
recognised by the Legislature as well
as policy makers and need no elaboration. Mediation is
here to stay. It is here to evolve. It is because
of the advantages of mediation as a method
here to find new grounds. It is here to prosper, as its time
has come. It is now finding
statutory recognition and has been introduced in few Statutes as well.
Examples are the
Companies Act, Insolvency and Bankruptcy Code, Commercial Courts Act etc. In
these
enactments provisions are made even for pre-litigation mediation by making this process
mandatory. There is, in any case, umbrella provisions in the form of Section 89 of the Code
of Civil
Procedure which, inter alia, provides for court annexed mediation as well. Time is
ripe now to have
similar mechanism for settling accident claims as well. Therefore, the
suggestion of establishing
MAMA is laudable. We recommend to the Government to
examine the feasibility of setting up MAMA
by making necessary amendments in the Motor
Vehicles Act itself. In fact, the way mediation
movement is catching up in this country, there
is a dire need to enact Indian Mediation Act as well.

28 Till the time such an amendment is made by the Parliament, National Legal Services
Authority
(NALSA) should take up this work as a project. A complete report/module be
made about the
functioning of Motor Accident Mediation Cell (MAMC). This exercise be
completed within a period of
two months. Thereafter, this project can be shared with all
State Legal Services Authorities (SLSA) so
that State Legal Services Authorities implement
the same through their respective District Legal
Services Authorities (DLSAs).

29 There is Mediation and Conciliation Project Committee (MCPC) in the Supreme

Court which takes
various policy decisions for better working of mediation, including court
annexed mediation.
Broadening the structure of MCPC, so as to have proper coordination
with High Court Mediation
Centers as well as Mediation Centers at District Court Level is
achieved. Thus, NALSA can even
consider entrusting the project of MAMC to MCPC as
well.

30 In a book titled Road Accidents: Prevention, Attention and Compensation , authored

by Mr. Arun
Mohan, Senior Advocate various aspects pertaining to access to justice to road
victims are
deliberated upon. There is a specific chapter on the establishment of MAMA
which can be of
immense help to the NALSA for preparing and finalizing the project.
NALSA would be well-advised to
take into consideration the suggestions and proposals
given in that book. It may, inter alia, make a
provision for the accident investigator to
compulsorily send a copy of report to MAMC or email to
National Road Safety Council.
Forwarding the copy to MAMC shall facilitate mediation, on the other
hand giving
information to National Road Safety Council would help the council to take measures for
preventing such accidents in future.

(B) FAST TRACKING DISPOSAL OF CASES BY MACTs :

31 Establishment of MAMA/MAMC is for the purpose of resolving the claims before the
case is filed
in the MACT. It is a matter of common knowledge that for amicable settlement
of the cases pending
before MACT, ADR in the form of Lok Adalat is resorted to, which has
achieved tremendous success
over a period of time. These Lok Adalats are also organised by
the Legal Services Authorities.
Settlement of cases by Lok Adalats have their own pros and
cons. Be as it may, resort to Lok Adalat
should continue because of its own advantages.
32 Notwithstanding, the aforesaid ADR methods, adjudicatory process before the
MACTs is
indispensable. There cannot be a guarantee that 100% cases would be settled
through mediation or
Lok Adalat. Therefore, there is a dire need for deciding these cases
without delays and within
reasonable period. The Delhi High Court has given few
judgments providing for mechanism to speed
up the disposal of such cases and to ensure that
schemes are settled within a period of 90/120 days
from the date of accident. In nutshell,
these directions include that on the occurrence of accident, the
police which comes into the
picture in the first instance, should complete the investigation and along
with filing of FIR
before the concerned Court of Metropolitan Magistrate, copies are sent to MACT as
well as
Insurance Company also. Insurance Company is supposed to look into the same to find out
as
to whether the claim is payable and within 30 days it should respond to MACT and once
all these
documents are before the MACT in the form of evidence etc. as well it would enable
the MACT to
decide the case within 30 days. The case where entire procedure is articulated
is judgment dated 16th
December, 2009 in FAO No. 843 of 2003. This Court has also given
its imprimatur in Jaiprakash v.
National Insurance Company (SLP(Civil) No. 11801-11804
of 2005) in its order dated 13th May, 2016
in the following manner:

"Insofar as the said suggestion is concerned, learned Solicitor General

drew our attention to the
response filed before us on behalf of the
General Insurance Council, in particular paragraph 4,
which states that
presently the procedure suggested in Paragraph 23 is being followed by
the
Insurance Companies in Delhi by way of a Scheme called "Claims
Tribunal Agreed Procedure"
which was formulated by the Delhi High
Court in the judgment dated 16.12.2009 passed in FAO
No.843 of 2003
in Rajesh Tyagi & Ors. v. Jaibir Singh 3 & Ors. It is also mentioned
therein that
Tribunal as well as the Legal Service Authority are taking
effective steps to implement the said
procedure, which is being carried
out in the National Capital Territory of Delhi. In paragraph 5, it
is further
submitted that since this procedure has been successful in Delhi it can be
extended on
pan India basis. The agreed procedure has also been filed as
Annexure R5 with the response
filed on behalf of the General Insurance
Council.

We have also perused the procedure, which has been placed

before us as Annexure R5 with the
response which, in our view,
appears to be a comprehensive one and that we can issue further
directions to the Registrar General of the Delhi High Court to
ensure that procedure is strictly
followed insofar as Delhi is
concerned and also circulate the said procedure to all the other
High
Courts and the Registrar General of all the other High Courts
are directed to ensure that the said
procedure is implemented
through the Motor Accidents Claims Tribunals in coordination
with
the Legal Service Authorities as well as the Director General
of Police of the States concerned.

The Registry of the Supreme Court is directed to forward a copy of this

order along with
Annexure R5 (pages 32 to 46 in the response filed on
behalf of the General Insurance Council) to
all the High Courts including
the Delhi High Court to ensure compliance of the present order.

33 Vide order dated 6th November, 2017 in Jaiprakash case, this Court
modified its order dated 13th
May, 2016 and directed all States to implement the
Modified Claims Tribunal Agreed Procedure
formulated by Delhi High Court
on 12th December, 2014. The copy of the Modified Claims Tribunal
Agreed
Procedure was directed to be circulated to the Registrar General of each High
Court for
necessary compliance. The relevant part of the said order is
reproduced hereunder:

"It is also pointed out by learned amicus curiae that the order passed by
Justice Midha referred
to in our order of 13th May, 2016 was actually
modified by Justice Midha on 12th December,
2014. The order dated
13th May, 2016 will, therefore, stand modified to the extent that Justice
Midha has himself modified his earlier order on 12th December, 2014.
The Registry will send a
copy of this order as well as the order passed by
Justice Midha on 12th December, 2014 to the
Registrar General of each
High Court for necessary information and compliance.
34 This needs to be followed at All India Level. NALSA should take up and
monitor the same as well in
coordination and cooperation with various high
courts to facilitate the same.

(C) Ensuring receipt of compensation in the safe hands of victims and/or

kiths and kins of
victims:

35 Mr. Arun Mohan has suggested that Government may frame procedures
and schemes in this
behalf. In particular LIC/RBI can provide for availability
of annuity services in consultation with
Pension Fund Regulatory and
Development Authority and the commercial banks/insurance
companies. To
facilitate the same, the learned senior counsel has given two flowcharts, one
under the
existing law and the other on establishment of MAMA. The details
for framing such procedure and
schemes are given in the book of Mr. Arun
Mohan referred to above. We impress upon the
Government to look into the
feasibility of framing such schemes and for the availability of annuity
certificates. This exercise may be done within the period of six months and
decision be taken
thereupon.

36 In addition, we would also like to mention that the Delhi High Court
(speaking through J.R. Midha,
J.) in Rajesh Tyagi v. Jaiveer Singh and Others
(FAO No. 842 of 2003) undertook the exercise of
framing Motor Accident
Claims Annuity Deposit Scheme (MACAD Scheme) in cooperation with Indian
Banks Association. Purpose of involving the banks was to ensure that the
Scheme is implemented
through the banks. In its order dated 7th December,
2018 passed in the aforesaid case, the learned
Judge recorded that 21 banks had
taken decision to implement MACAD Scheme which was approved
by the
Court on 1st May, 2018. Operative documents of these 21 banks were taken on
record. The
court directed that sets of these operative documents be furnished
to the Registrar General of the
High Court so that these are circulated to all the
MACTs. Further, directions for implementation of the
said Scheme are given.
Therefore, we would like to reproduce order dated 7th December, 2018 in its
entirety.

"1. Mr. Lalit Bhasin, learned counsel for Indian Bank Association has
handed over copies of the
operative documents of 21 Banks which have
implemented Motor Accident Claims Annuity
Deposit Scheme
(MACAD Scheme) approved by this Court on 01st May, 2018. The
compilations
of the operative documents of 21 banks are taken on
record. Learned counsel for the Indian
Bank Association shall furnish the
sets of the operative documents to the Registrar General for
being
circulated to all the Claims Tribunals. 2. The Registrar General is
directed to circulate the
aforesaid compilation to all the Claims Tribunals
for being implemented forthwith. The Claims
Tribunals shall disburse
the awarded amount to the claimants in a phased manner in terms of
the
order dated 01st May, 2018 and the award amount be disbursed through
MACAD Scheme. 3.
All the Banks are directed to appoint a Nodal
Officer within four weeks. Learned counsel for the
IBA shall compile the
list of all the Nodal Officers of the Banks with their respective addresses,
phone numbers as well as e-mail addresses and submit the same to the
Registrar General who
shall circulate the list of Nodal Officers to all the
Claims Tribunals. The Nodal Officer of each
Bank shall ensure the
implementation of the MACAD Scheme by their branches. The Claims
Tribunal shall send the copy of the disbursement order by e-mail to the
Nodal Officer of that
Bank who shall ensure the disbursement by the
Bank within three weeks of the receipt of the e-
mail. 4. The Indian Bank
Association and Delhi State Legal Services Authority shall give
adequate
publicity to MACAD Scheme in the print as well as digital media. 5.
Claims Tribunal
Agreed Procedure in terms of the order dated 15th
December, 2017 is further modified to
incorporate the directions
contained in orders dated 18th January, 2018, 09th March, 2018, 01st
May, 2018, 20th July, 2018 and 07th September, 2018. The Modified
Claims Tribunal Agreed
Procedure is annexed to this order. 6. The
Registrar General shall circulate the Modified Claims
Tribunal Agreed
Procedure to all the Claims Tribunals. The Claims Tribunals, Delhi
Police and
Insurance Companies are directed to implement the Modified
Claims Tribunal Agreed Procedure
 with effect from 01st January, 2019.
7. Learned amicus curiae submits that the Committee is
deliberating
upon the issues referred to it by this Court. Let the final report of the
Committee be
submitted before this Court on the next date of hearing. 8.
List for reporting compliance on 08th
February, 2019 at 02:30 P.M. 9.
This Court appreciates the assistance rendered by Mr. Lalit
Bhasin,
learned counsel for Indian Bank Association for implementation of
MACAD Scheme. 10.
Copy of this order along with Modified Claims
Tribunal Agreed Procedure be sent to the
Registrar General of this Court,
National Legal Services Authority (NALSA), Delhi State Legal
Services
Authority (DSLSA), Delhi Police as well as General Insurance Council
(5th Floor, Building
No.14, National Insurance Building, Jamshedji Tata
Road, Churchgate, Mumbai-400020). General
Insurance Council shall
circulate this order to all the Insurance Companies. 11. Copy of this
order be given dasti to learned counsel for the parties as well as learned
counsel for IBA and
Delhi Police under signature of Court Master.

37 Thus, direction for implementation of the Claims Tribunal Agreed

Procedure which is substituted
by modified procedure, as noted above, are
already there. However, we find that there is no proper
implementation thereof
by the Claims Tribunals. We, thus, direct that there should be programmes
from
time to time, in all State Judicial Academies to sensitizing the presiding officers
of the Claims
Tribunals, Senior Police Officers of the State Police as well as
Insurance Company for the
implementation of the said Procedure.

38 The Modified Claims Tribunal Agreed Procedure as approved by High

Court of Delhi in its aforesaid
order dated 7th December, 2018 has the
propensity to ensure speedy disposal of MACT cases.
Likewise, Operative
Documents of 21 documents which have implemented Annuity Deposit Scheme
can ensure that compensation is delivered to the persons for whom it is meant.
It has the element of
annuity payments as well. There is, therefore, a need to
implement the MACAD Scheme by the Claims
Tribunals in the entire country.
We direct accordingly. We also direct 21 banks to implement its
operative
documents on All India basis.

39 We sum up the various directions/recommendations hereinbelow:

(a) We impress upon the Government to also consider the feasibility of

enacting Indian
Mediation Act to take care of various aspects of
mediation in general.

(b) The Government may examine the feasibility of setting up MAMA

by making necessary
amendments in the Motor Vehicles Act. For this
purpose, it can consider the two flow charts
given by the appellant.

(c) In the interregnum, NALSA is directed to set up Motor Accident

Mediation Cell which can
function independently under the aegis of
NALSA or can be handed over to MCPC. Such a
project should be
prepared within a period of two months and it should start functioning
immediately thereafter at various levels as suggested in this judgment.
We reiterate the
directions contained in order dated November 6, 2017
in Jai Prakash case for implementation of
the latest Modified Claims
Tribunal Agreed Procedure. For ensuring such implementation,
NALSA
is directed to take up the same in coordination and cooperation with
various High
Courts. MACAD Scheme shall be implemented by all
Claim Tribunals on All India basis. 21
Banks, Members of Indian Banks
Assocation, who had taken decision to implement MACAD
Scheme
would do the same on All India basis.

(d) We impress upon the Government to look into the feasibility of

framing necessary schemes
and for the availability of annuity
certificates. This exercise may be done within the period of six
months
and decision be taken thereupon.
 (e) Likewise, we direct that there should be programmes from time to
time, in all State Judicial
Academies, to sensitizing the Presiding Officers
of the Claims Tribunals, Senior Police Officers of
the State Police as well
as Insurance Company for the implementation of the said Procedure.

40 The appeals are disposed of in the aforesaid manner.

 4

2020 (0) AIJEL-SC 66525

SUPREME COURT OF INDIA

(DELHI HIGH COURT)

Hon'ble Judges:L.Nageswara Rao, Krishna Murari and S.Ravindra Bhat JJ.

Pappu Deo Yadav Versus Naresh Kumar

CIVIL APPEAL No. 2567 of 2020 ; *J.Date :- SEPTEMBER 17, 2020

MOTOR VEHICLES ACT, 1988 Section - 140 , 166

Motor Vehicles Act, 1988 - S. 140, 166 - motor accident - injuries - permanent disablement - claim
for enhancement of compensation - appellant aged 20 years, at that time unmarried, was working as
a data entry operator/typist at Tis Hazari Courts - prior to injury, he earned an amount of Rs. 12,000
per month - he incurred permanent disability, i.e. loss of his right hand (which was amputated) -
disability was assessed to be 89% - however, Tribunal and High Court re-assessed disability to be
only 45%, on assumption that assessment for compensation was to be on a different basis, as injury
entailed loss of only one arm - while assessing loss of earning capacity, Tribunal took appellant s
income to be Rs. 8000 per month and added 50% towards future prospects - at the time of accident,
appellant was only 20 years of age, therefore, a multiplier of 18 was applied - physical disability was
assessed to be 45% by Tribunal - High Court, to which claimant appealed (and insurer cross
appealed), revised this head of compensation by doing away with addition of 50% towards future
prospects, and reassessed compensation for loss of earning capacity as Rs. 7,77,600 (Rs. 8000 x 12
x 45% x 18) - total compensation was reassessed by High Court to be Rs. 14,36,600, after enhancing
compensation for disfigurement, diet, attendant and conveyance, loss of amenities and enjoyment of
life, and pain and suffering - whether in cases of permanent disablement incurred as a result of a
motor accident, claimant can seek, apart from compensation for future loss of income, amounts for
future prospects too; and extent of disability - held, Courts should not adopt a stereotypical or
myopic approach, but instead, view matter taking into account realities of life, both in assessment of
extent of disabilities, and compensation under various heads - however, approach is completely
mechanical and entirely ignores realities - whilst it is true that assessment of injury of one limb or to
one part may not entail permanent injury to whole body, inquiry which court has to conduct is
resultant loss which injury entails to earning or income generating capacity of claimant - thus, loss
of one leg to someone carrying on a vocation such as driving or something that entails walking or
constant mobility, results in severe income generating impairment or its extinguishment altogether -
likewise, for one involved in a job like a carpenter or hairdresser, or machinist, and an experienced
one at that, loss of an arm, (more so a functional arm) leads to near extinction of income generation
- if age of victim is beyond 40, scope of rehabilitation too diminishes - these individual factors are of
crucial importance which are to be borne in mind while determining extent of permanent
disablement, for purpose of assessment of loss of earning capacity - High Court clearly erred in
holding that compensation for loss of future prospects could not be awarded - in addition to loss of
future earnings (based on a determination of income at time of accident), appellant is also entitled
to compensation for loss of future prospects, @ 40% - impugned judgment modified accordingly;
sum of Rs. 19,65,600/- shall be substituted in place of amount of Rs. 7,77,600/-, considering
enhancement towards loss of earning capacity and future prospects - appeal partly allowed.

Imp.Para: [ 13 ] [ 14 ] [ 23 ]

Cases Referred To :

1. Anant S:o Of Sidheshwar Dukre V. Pratap S:o Zhamnnappa Lamzane & Anr., 2018 9 SCC 450 :
2018 AIR SC 5081 : 2018 (10) Scale 130 : JT 2018 (8) 173 : 2018 (8) Supreme 638
2. Anthony Alias Anthony Swamy V/s. Managing Director, K.S.R.T.C, 2020 0 SCCOnLine(SC) 493
3. Govind Yadav V. New India Insurance Co. Ltd., 2011 10 SCC 683 : 2011 (2) Scale 336 : JT 2011
(13) 40 : 2012 (1) SCC(Cri) 82 : 2012 (1) UJ 33
4. Icici Lombard General Insurance Co. Ltd. V. Ajay Kumar Mohanty, 2018 3 SCC 686 : 2018 AIR SC
2740 : 2018 (3) Scale 620 : JT 2018 (3) 229 : 2018 (2) Supreme 413
5. K. Suresh V. New India Assurance Co. Ltd., 2012 12 SCC 274 : 2012 (10) Scale 516 : JT 2012
(10) 484 : 2012 (11) SCR 414 : 2012 (7) Supreme 577
6. Nagarajappa V. Divisional Manager, Oriental Insurance Company Limited, 2011 13 SCC 323 :
2011 AIR SC 1785 : 2011 (4) Scale 515 : JT 2011 (4) 211 : 2011 (6) SCR 70
7. National Insurance Company Ltd. V. Pranay Sethi & Ors., 2017 16 SCC 860
8. Nizam S Institute Of Medical Sciences V. Prasanth S. Dhananka, 2009 6 SCC 1 : 2009 AIR
SC(Supp) 1503 : 2009 (7) Scale 407 : JT 2009 (6) 651 : 2009 (9) SCR 313
9. R.D. Hattangadi V. Pest Control (India) (P) Ltd., 1995 1 SCC 551 : 1995 AIR SC 755 : 1995 (1)
Scale 79 : JT 1995 (1) 304 : 1995 (1) SCR 75
10. Reshma Kumari V. Madan Mohan, 2009 13 SCC 422 : 2009 (10) Scale 90 : JT 2009 (10) 90 :
2009 AIR SCW 6999 : 2010 (1) SCC(Cri) 1044

Cases Relied on :

1. Arvind Kumar Mishra V. New India Assurance Co. Ltd., 2010 10 SCC 254 : 2010 (10) Scale 298 :
JT 2010 (10) 254 : 2010 (11) SCR 857 : 2010 AIR SCW 6085
2. Jagdish V. Mohan & Ors, 2018 4 SCC 571 : 2018 AIR SC 1347 : 2018 (3) Scale 615 : JT 2018 (3)
112 : 2018 (2) Supreme 388
3. Jakir Hussein V. Sabir, 2015 7 SCC 252 : 2015 AIR SC(Supp) 446 : 2015 (2) Scale 582 : JT 2015
(2) 424 : 2015 AIR SCW 1496
4. Kajal V. Jagdish Chand, 2020 4 SCC 413 : 2020 AIR SC 776 : 2020 (3) Scale 154 : JT 2020 (2)
126 : 2020 (2) Supreme 210
5. Mohan Soni V. Ram Avtar Tomar, 2012 2 SCC 267 : 2012 AIR SC 782 : 2012 (1) Scale 135 : 2012
(2) SCR 921 : 2012 AIR SCW 555
6. National Insurance Co. Ltd. V. Pranay Sethi, 2017 16 SCC 680 : 2017 AIR SC 5157 : 2017 (13)
Scale 12 : JT 2017 (10) 450 : 2017 (8) Supreme 107
7. Neerupam Mohan Mathur V. New India Assurance Company, 2013 14 SCC 15 : 2013 AIR SC
3378 : 2013 (8) Scale 360 : JT 2013 (13) 610 : 2013 (8) SCR 15
8. Parminder Singh V. New India Assurance Co. Ltd, 2019 7 SCC 217 : 2019 AIR SC 3128 : 2019 (9)
Scale 200 : 2019 (8) SCR 986 : 2019 (6) Supreme 286
9. Raj Kumar V. Ajay Kumar, 2011 1 SCC 343 : 2010 (12) Scale 265 : 2010 (13) SCR 179 : 2011 (1)
SCC(Cri) 1161 : 2011 (98) AIC 251
10. Sandeep Khanduja V. Atul Dande, 2017 3 SCC 351 : 2018 AIR SC(Supp) 1246 : 2017 (2) Scale
314 : JT 2017 (2) 68 : 2017 (5) Supreme 29
11. Santosh Devi V. National Insurance Company Limited, 2012 6 SCC 421 : 2012 AIR SC 2185 :
2012 (4) Scale 559 : JT 2012 (4) 353 : 2012 (3) SCR 1178
 12. Syed Sadiq & Ors. V. Divisional Manager, United Insurance Company Limited, 2014 2 SCC 735 :
2014 AIR SC 1052 : 2014 (1) Scale 377 : JT 2014 (1) 569 : 2014 AIR SCW 724

Equivalent Citation(s):
AIR 2020 SC 4424 : 2020 (11) Scale 192

JUDGMENT :-

S.RAVINDRA BHAT, J.

1 The appellant questions a decision of the High Court of Delhi. On

18.05.2012, the appellant was
injured in a motor accident while travelling to
Hapur as a passenger in a bus, having paid the requisite
fare. At about 1.30 pm
when the bus reached village Sadikpur, PS-Hafizpur, Hapur, Uttar Pradesh, the
driver of the offending bus (the first respondent) sought to overtake the bus in
which the appellant
was travelling, from the wrong side, and zipped the
appellant s bus, scratching it. This rash and
negligent act caused a dent in the
bus where the appellant was seated, as a result of which he
suffered injuries.
The appellant was removed to Dr. Khan s Rehan hospital and thereafter, AIIMS
Trauma Center. The appellant claimed compensation, impleading the owner,
the driver of the vehicle,
and the insurer. During the course of proceedings
before the Motor Accident Claims Tribunal, he
applied for ascertainment of his
disability. The disability report (Ex. PW-l/9 dated 01.04.2014 issued
by Pandit
Madan Mohan Malviya Hospital, during the motor vehicles compensation claim
proceedings) showed that he suffered 89% disability in relation to his right
upper limb, which had to be
amputated. The report also went on to say that the
condition was non progressive, not likely to
improve. Reassessment is not
recommended . A first information report (FIR) regarding the accident
was
registered (FIR No. 57/12), as case Crime No. 255/12, Hazifpur Police Station,
Hapur, Uttar
Pradesh, under Sections 279 and 338 of the Indian Penal Code,
1860.

2 The appellant, at that time unmarried, was working as a data entry

operator/typist at Tis Hazari
Courts. Prior to the injury, he earned an amount of
Rs. 12,000 per month. He had applied for grant of
compensation under Sections
166 and 140 of the Motor Vehicles Act, 1988 , (hereafter the Act )
claiming a
sum of Rs. 50 lakhs with interest at the rate of 12% per annum against the first
respondent,
(the driver of the bus at the time of the accident), the second
respondent (owner of the vehicle), and
third respondent (the insurer). The Motor
Accident Claims Tribunal (hereafter the Tribunal ) rejected
the insurer s
objection regarding its jurisdiction and further held that the appellant had
suffered
serious injuries due to rash and negligent driving of the respondent. It
awarded compensation in the
following terms:

1. Compensation for medical expenses 11,000

2. Compensation for pain and suffering 30,000

3. Compensation for special diet, attendant 30,000

and conveyance charges
4. Loss of future earning capacity/ income 11,66,400

5. Loss of amenities and enjoyment of life 15,000

6. Compensation for disfigurement 25,000

7. Loss of income during treatment 48,000

8. Future medical expenses 1,00,000

9. TOTAL 14,25,400

3 While assessing loss of earning capacity, the Tribunal took the

appellant s income to be Rs. 8000
per month, and added 50% towards future
prospects. At the time of the accident, the appellant was
only 20 years of age.
Therefore, a multiplier of 18 was applied. The physical disability was assessed
to
be 45%, by the Tribunal. The High Court, to which the claimant appealed
(and the insurer cross
appealed), revised this head of compensation by doing
away with the addition of 50% towards future
prospects, and reassessed the
compensation for loss of earning capacity as Rs. 7,77,600 (Rs.8000 x
12 x 45% x
18). The total compensation was reassessed by the High Court to be Rs.14,36,600,
after
enhancing the compensation for disfigurement, diet, attendant and
conveyance, loss of amenities and
enjoyment of life, and pain and suffering.
Further, an interest of 9% per annum was imposed. In
reducing the amount
awarded for loss of future prospects, the High Court noticed this court s
judgments in National Insurance Company Ltd. v. Pranay Sethi & Ors., (2017) 16 SCC 860. and
Jagdish
v. Mohan & Ors, (2018) 4 SCC 571 both by three-judge benches of this court.

4 The appellant argues that the impugned judgment is in material error, in

misreading this court s
judgments in Pranay Sethi & Ors4 which was later
followed in Jagdish5 by a three judge Bench, which
had ruled that the benefit of
future prospects should not be confined only to those who have a
permanent job
and would extend to self-employed individuals, and in case of self- employed
persons
an addition of 40% of established income should be made where the
age of the victim at the time of
the accident was below 40 years. It was urged
that the decision in Anant s/o of Sidheshwar Dukre v.
Pratap s/o Zhamnnappa
Lamzane & Anr., 2018 (9) SCC 450 relied on by the High Court, did not assess
future prospects.
However, that per se did not preclude claims by persons incurring permanent
disablement as a consequence of motor accidents, from seeking such heads of
compensation. It is
urged that the High Court misread and created a distinct
category of cases where addition in income
towards "future prospects" can only
be given in case of death, and not for injury, which cannot be the
intention of
this court as no such observation is made. It was argued that the High Court
should have
reassessed and not reduced 'the loss of future earning capacity' of
the appellant from Rs. 11,66,400/-
(determined by the tribunal) to Rs. 7,77,600/- on
the wrongly depressed income of Rs. 8000/-. Learned
counsel submitted that the
assessment of monthly income should have been Rs.12,000/- and not
Rs.8,000/.
It was submitted that the courts below ignored the fact that in 2012, persons
earning Rs.12,
000/- per month did not have to file income tax returns or pay
tax. The High Court further erred in
assessment of physical permanent disability
of injured as 45%, even though it was 100%.

5 Counsel for the insurer, who contested the appeal, urged this court not to
interfere with the
impugned judgment, and stated that the assessment of
compensation was made by the High Court in
conformity with this Court s
decisions. It was highlighted that permanent disability of loss of one arm,
cannot lead to loss of earning capacity of up to 90% and consequently, the
assessment of
compensation on the head of loss of earning capacity was
correctly fixed at 45%. He also argued that
as far as income is concerned,
although the appellant relied on the independent testimony of a lawyer
(who
stated that he used to pay him about Rs. 300/- per day), there was no proof of
payment of
income tax to support the claim that the appellant earned Rs. 12,000/-
per month. The production of
the PAN card ipso facto did not establish income
at the level claimed. Further, the counsel urged that
the impugned judgment
correctly appreciated the law, and loss of alleged future earning capacity was
turned down.

6 The principle consistently followed by this court in assessing motor

vehicle compensation claims, is
to place the victim in as near a position as she
or he was in before the accident, with other
compensatory directions for loss of
amenities and other payments. These general principles have
been stated and
reiterated in several decisions Govind Yadav v. New India Insurance Co. Ltd. [Govind
Yadav v. New India Insurance Co. Ltd., (2011)
10 SCC 683. This court referred to the pronouncements
in R.D. Hattangadi v. Pest Control (India) (P) Ltd.,
(1995) 1 SCC 551; Nizam's Institute of Medical
Sciences v. Prasanth S. Dhananka (2009) 6 SCC
1; Reshma Kumari v. Madan Mohan (2009) 13 SCC
422; Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343.
Govind Yadav spelt out these principles by stating
that the courts should,

in determining the quantum of compensation payable to the victims of accident, who are
disabled either permanently or temporarily. If the victim of the accident suffers permanent
disability, then efforts should always be made to award adequate compensation not only for the
physical injury and treatment, but also for the loss of earning and his inability to lead a normal
life and enjoy amenities, which he would have enjoyed but for the disability caused due to the
accident.

These decisions were also followed in ICICI Lombard General Insurance Co. Ltd. v. Ajay Kumar
Mohanty,
(2018) 3 SCC 686.

7 Two questions arise for consideration: one, whether in cases of

permanent disablement incurred as
a result of a motor accident, the claimant can
seek, apart from compensation for future loss of
income, amounts for future
prospects too; and two, the extent of disability. On the first question, the
High
Court no doubt, is technically correct in holding that Pranay Sethi8 involved
assessment of
compensation in a case where the victim died. However, it went
wrong in saying that later, the three-
judge bench decision in Jagdish9 was not
binding, but rather that the subsequent decision in Anant10
to the extent that it
did not award compensation for future prospects, was binding. This court is of
the
opinion that there was no justification for the High Court to have read the
previous rulings of this
court, to exclude the possibility of compensation for
future prospects in accident cases involving
serious injuries resulting in
permanent disablement. Such a narrow reading of Pranay Sethi11 is
illogical,
because it denies altogether the possibility of the living victim progressing
further in life in
accident cases - and admits such possibility of future prospects,
in case of the victim s death.

8 This court has emphasized time and again that just compensation should include all elements that
would go to place the victim in as near a
position as she or he was in, before the occurrence of the
accident. Whilst no
amount of money or other material compensation can erase the trauma, pain
and
suffering that a victim undergoes after a serious accident, (or replace the
loss of a loved one),
monetary compensation is the manner known to law,
whereby society assures some measure of
restitution to those who survive, and
the victims who have to face their lives. In Santosh Devi v.
National Insurance
Company Limited, 2012) 6 SCC 421 this Court held that:

14. We find it extremely difficult to fathom any rationale for the

observation made in paragraph
24 of the judgment in Sarla
Verma's case that where the deceased was self-employed or was
on
a fixed salary without provision for annual increment, etc.,
the Courts will usually take only the
actual income at the time of
death and a departure from this rule should be made only in rare
and exceptional cases involving special circumstances. In our
view, it will be nave to say that the
wages or total
emoluments/income of a person who is self-employed or who is
employed on a
fixed salary without provision for annual
increment, etc., would remain the same throughout his
life.

15. The rise in the cost of living affects everyone across the
board. It does not make any
distinction between rich and poor.
As a matter of fact, the effect of rise in prices which directly
impacts the cost of living is minimal on the rich and maximum on
those who are self-employed
 or who get fixed
income/emoluments. They are the worst affected people.
Therefore, they put
extra efforts to generate additional income
necessary for sustaining their families.

16. The salaries of those employed under the Central and State
Governments and their
agencies/instrumentalities have been
revised from time to time to provide a cushion against the
rising
prices and provisions have been made for providing security to
the families of the
deceased employees. The salaries of those
employed in private sectors have also increased
manifold. Till
about two decades ago, nobody could have imagined that salary
of Class IV
employee of the Government would be in five figures
and total emoluments of those in higher
echelons of service will
cross the figure of rupees one lac.

17. Although, the wages/income of those employed in

unorganized sectors has not registered a
corresponding increase
and has not kept pace with the increase in the salaries of the
Government employees and those employed in private sectors but
it cannot be denied that there
has been incremental enhancement
in the income of those who are self-employed and even
those
engaged on daily basis, monthly basis or even seasonal basis. We
can take judicial notice
of the fact that with a view to meet the
challenges posed by high cost of living, the persons
falling in the
latter category periodically increase the cost of their labour. In
this context, it may
be useful to give an example of a tailor who
earns his livelihood by stitching cloths. If the cost of
living
increases and the prices of essentials go up, it is but natural for
him to increase the cost of
his labour. So will be the cases of
ordinary skilled and unskilled labour, like, barber, blacksmith,
cobbler, mason etc.

18. Therefore, we do not think that while making the

observations in the last three lines of
paragraph 24 of Sarla
Verma's judgment, the Court had intended to lay down an
absolute rule
that there will be no addition in the income of a
person who is self-employed or who is paid fixed
wages. Rather,
it would be reasonable to say that a person who is self-employed
or is engaged
on fixed wages will also get 30 per cent increase in
his total income over a period of time and if
he / she becomes
victim of accident then the same formula deserves to be applied
for
calculating the amount of compensation.

9 In Jagdish13 the victim, a carpenter, suffered permanent disablement, and

his claim for
compensation including for loss of future prospects was
considered by a three-judge bench (which
included, incidentally, the judges who
had decided Pranay Sethi14). This court held that:

13. In the judgment of the Constitution Bench in Pranay

Sethi [National Insurance Co. Ltd. v.
Pranay Sethi, (2017) 16
SCC 680], this Court has held that the benefit of future prospects
should
not be confined only to those who have a permanent job
and would extend to self-employed
individuals. In the case of a
self-employed person, an addition of 40% of the established
income
should be made where the age of the victim at the time of
the accident was below 40 years.
Hence, in the present case, the
appellant would be entitled to an enhancement of Rs 2400
towards loss of future prospects.

14. In making the computation in the present case, the court must
be mindful of the fact that the
appellant has suffered a serious
disability in which he has suffered a loss of the use of both his
hands. For a person engaged in manual activities, it requires no
stretch of imagination to
understand that a loss of hands is a
complete deprivation of the ability to earn. Nothing at least
in
the facts of this case can restore lost hands. But the measure of
compensation must reflect a
genuine attempt of the law to restore
the dignity of the being. Our yardsticks of compensation
should
not be so abysmal as to lead one to question whether our law
values human life. If it
does, as it must, it must provide a realistic
recompense for the pain of loss and the trauma of
suffering.
Awards of compensation are not law's doles. In a discourse of
rights, they constitute
 entitlements under law. Our conversations
about law must shift from a paternalistic
subordination of the
individual to an assertion of enforceable rights as intrinsic to
human
dignity.

15. The Tribunal has noted that the appellant is unable to even
eat or to attend to a visit to the
toilet without the assistance of an
attendant. In this background, it would be a denial of justice to
compute the disability at 90%. The disability is indeed total.
Having regard to the age of the
appellant, the Tribunal applied a
multiplier of 18. In the circumstances, the compensation
payable
to the appellant on account of the loss of income, including
future prospects, would be
Rs 18, 14,400. In addition to this
amount, the appellant should be granted an amount of Rs 2
lakhs
on account of pain, suffering and loss of amenities. The amount
awarded by the Tribunal
towards medical expenses (Rs 98,908);
for extra nourishment (Rs 25,000) and for attendant's
expenses
(Rs 1 lakh) is maintained. The Tribunal has declined to award
any amount towards
future treatment. The appellant should be
allowed an amount of Rs 3 lakhs towards future
medical
expenses. The appellant is thus awarded a total sum of Rs
25,38,308 by way of
compensation. The appellant would be
entitled to interest at the rate of 9% p.a. on the
compensation
from the date of the filing of the claim petition. The liability to
pay compensation
has been fastened by the Tribunal and by the
High Court on the insurer, owner and driver jointly
and
severally which is affirmed. The amount shall be deposited
before the Tribunal within a
period of 6 weeks from today and
shall be paid over to the appellant upon proper identification.

10 The recent decision in Parminder Singh v. New India Assurance Co.

Ltd, (2019) 7 SCC 217 involved
an accident victim who underwent surgery for hemiplegia16.
According to the treating medic, he could
not work as a labourer or perform any
agricultural work, or work as a driver (as he was wont to); the
assessment of his
disability was at 75%, and of a permanent nature. The court held that:

5.1. On the basis of the affidavit filed by the employer of the

appellant, we accept that the
income of the appellant was Rs
10,000 p.m. at the time of the accident, for the purpose of
computing the compensation payable to him.

5.2. The appellant has however, produced an affidavit by his

employer in this Court. As per the
said affidavit, the appellant
was earning Rs 10,000 p.m. at the time of the accident.

5.3. Taking the income of the appellant as Rs 10,000 p.m., with

future prospects @ 50% as
awarded by the High Court, the total
income of the appellant would come to Rs 15,000 p.m.

5.4. The appellant was 23 years old at the time when the accident
occurred. Applying the
multiplier of 18, the loss of future
earnings suffered by the appellant would work out to Rs
15,000
� 12 � 18 = Rs 32,40,000.

********* ********* **********

5.7. In K. Suresh v. New India Assurance Co. Ltd (2012) 12 SCC

274, this Court held that :

10. It is noteworthy to state that an adjudicating

authority, while determining the quantum of
compensation, has to keep in view the sufferings of the
injured person which would include his
inability to lead a
full life, his incapacity to enjoy the normal amenities
which he would have
enjoyed but for the injuries and his
ability to earn as much as he used to earn or could have
earned. Hence, while computing compensation the
approach of the Tribunal or a court has to be
broadbased.
Needless to say, it would involve some guesswork
as there cannot be any
mathematical exactitude or a
precise formula to determine the quantum of
compensation. In
determination of compensation the
fundamental criterion of just compensation should be
inhered.
 ******** ********* ********

5.9. In the present case, it is an admitted position that it is not

possible for the appellant to get
employed as a driver, or do any
kind of manual labour, or engage in any agricultural operations
whatsoever, for his sustenance. In such circumstances, the High
Court has rightly assessed the
appellant's functional disability at
100% insofar as his loss of earning capacity is concerned. The
appellant is, therefore, awarded Rs 32,40,000 towards loss of
earning capacity.

11 Yet later and more recently in an accident case, which tragically left in its
wake a young girl in a life-
long state of paraplegia, this court, in Kajal v.
Jagdish Chand, (2020) 4 SCC 413 reiterated that in
addition to loss of earnings, compensation
for future prospects too could be factored in, and observed
that:

14. In Concord of India Insurance Co. Ltd. v. Nirmala Devi [Concord

of India Insurance Co. Ltd. v.
Nirmala Devi, (1979) 4 SCC 365 : 1979
SCC (Cri) 996 : 1980 ACJ 55] , this Court held : (SCC p.
366, para 2)

2. the determination of the quantum must be liberal, not

niggardly since the law values life and
limb in a free country
in generous scales.

15. In R.D. Hattangadi v. Pest Control (India) (P) Ltd. [R.D.

Hattangadi v. Pest Control (India) (P)
Ltd., (1995) 1 SCC 551 : 1995
SCC (Cri) 250] , dealing with the different heads of compensation
in
injury cases this Court held thus : (SCC p. 556, para 9)

9. Broadly speaking while fixing the amount of

compensation payable to a victim of an accident,
the
damages have to be assessed separately as pecuniary
damages and special damages.
Pecuniary damages are those
which the victim has actually incurred and which are capable
of
being calculated in terms of money; whereas nonpecuniary
damages are those which are
incapable of being
assessed by arithmetical calculations. In order to appreciate
two concepts
pecuniary damages may include expenses
incurred by the claimant: (i) medical attendance; (ii)
loss of
earning of profit up to the date of trial; (iii) other material
loss. So far as non-pecuniary
damages are concerned, they
may include : (i) damages for mental and physical shock,
pain and
suffering, already suffered or likely to be suffered in
the future; (ii) damages to compensate for
the loss of
amenities of life which may include a variety of matters i.e.
on account of injury the
claimant may not be able to walk,
run or sit; (iii) damages for loss of expectation of life i.e. on
account of injury the normal longevity of the person
concerned is shortened; (iv) inconvenience,
hardship,
discomfort, disappointment, frustration and mental stress in
life.

16. In Raj Kumar v. Ajay Kumar [Raj Kumar v. Ajay Kumar, (2011) 1
SCC 343 : (2011) 1 SCC (Civ)
164 : (2011) 1 SCC (Cri) 1161] , this
Court laid down the heads under which compensation is to
be awarded
for personal injuries : (SCC p. 348, para 6)

6. The heads under which compensation is awarded in

personal injury cases are the following:
Pecuniary damages (Special damages)

(i) Expenses relating to treatment, hospitalisation, medicines,

transportation, nourishing food,
and miscellaneous
expenditure.

(ii) Loss of earnings (and other gains) which the injured would
have made had he not been
injured, comprising:

(a) Loss of earning during the period of treatment;

 (b) Loss of future earnings on account of permanent disability.

(iii) Future medical expenses.

Non-pecuniary damages (General damages)

(iv) Damages for pain, suffering and trauma as a consequence

of the injuries.

(v) Loss of amenities (and/or loss of prospects of marriage).

(vi) Loss of expectation of life (shortening of normal

longevity).

In routine personal injury cases, compensation will be

awarded only under heads (i), (ii)(a) and (iv). It
is only in
serious cases of injury, where there is specific medical
evidence corroborating the evidence
of the claimant, that
compensation will be granted under any of the heads (ii)(b),
(iii), (v) and (vi)
relating to loss of future earnings on account
of permanent disability, future medical expenses, loss of
amenities (and/or loss of prospects of marriage) and loss of
expectation of life.

17. In K. Suresh v. New India Assurance Co. Ltd. [K. Suresh v. New
India Assurance Co. Ltd.,
(2012) 12 SCC 274 : (2013) 2 SCC (Civ)
279 : (2013) 4 SCC (Cri) 638] , this Court held as follows :
(SCC p.
276, para 2)

2. There cannot be actual compensation for anguish of the

heart or for mental tribulations. The
quintessentiality lies in the
pragmatic computation of the loss sustained which has to be in the
realm of realistic approximation. Therefore, Section 168 of the
Motor Vehicles Act, 1988 (for
brevity the Act ) stipulates that
there should be grant of just compensation . Thus, it becomes a
challenge for a court of law to determine just compensation which is neither a bonanza nor a
windfall, and simultaneously,
should not be a pittance.

******* ******** *********

Loss of earnings

20. Both the courts below have held that since the girl was a young
child of 12 years only
notional income of Rs 15,000 p.a. can be taken
into consideration. We do not think this is a
proper way of assessing
the future loss of income. This young girl after studying could have
worked and would have earned much more than Rs 15,000 p.a. Each
case has to be decided on
its own evidence but taking notional
income to be Rs 15,000 p.a. is not at all justified. The
appellant has
placed before us material to show that the minimum wages payable
to a skilled
workman is Rs 4846 per month. In our opinion, this
would be the minimum amount which she
would have earned on
becoming a major. Adding 40% for the future prospects, it works to
be Rs
6784.40 per month i.e. 81,412.80 p.a. Applying the multiplier
of 18, it works out to Rs
14,65,430.40, which is rounded off to Rs
14,66,000.

12 In view of the above decisive rulings of this court, the High Court clearly
erred in holding that
compensation for loss of future prospects could not be
awarded. In addition to loss of future earnings
(based on a determination of the
income at the time of accident), the appellant is also entitled to
compensation
for loss of future prospects, @ 40% (following the Pranay Sethi principle).

13 The factual narrative discloses that the appellant, a 20-year-old data entry
operator (who had
studied up to 12th standard) incurred permanent disability, i.e.
loss of his right hand (which was
amputated). The disability was assessed to be
89%. However, the tribunal and the High Court re-
assessed the disability to be
only 45%, on the assumption that the assessment for compensation was
to be on
a different basis, as the injury entailed loss of only one arm. This approach, in
the opinion of
this court, is completely mechanical and entirely ignores realities.
Whilst it is true that assessment of
injury of one limb or to one part may not
entail permanent injury to the whole body, the inquiry which
the court has to
conduct is the resultant loss which the injury entails to the earning or income
generating capacity of the claimant. Thus, loss of one leg to someone carrying
on a vocation such as
driving or something that entails walking or constant
mobility, results in severe income generating
impairment or its extinguishment
altogether. Likewise, for one involved in a job like a carpenter or
hairdresser, or
machinist, and an experienced one at that, loss of an arm, (more so a functional
arm)
leads to near extinction of income generation. If the age of the victim is
beyond 40, the scope of
rehabilitation too diminishes. These individual factors
are of crucial importance which are to be borne
in mind while determining the
extent of permanent disablement, for the purpose of assessment of
loss of
earning capacity.

14 In Neerupam Mohan Mathur v. New India Assurance Company, (2013) 14 SCC 15 this
court
considered the case of a victim, whose injury was assessed to 70% as loss
of earning capacity for
amputation of the arm; he was a postgraduate diploma
holder in mechanical engineering, 32 years of
age and earning about Rs. 3000/-
per month. This court held, approving the High Court s order (which
had
adopted the formula from the Workmen s Compensation Act, to determine 70%
for the purpose of
deciding loss of earning capacity) as follows:

12. In the present case, the percentage of permanent disability

has not been expressed by the
doctors with reference to the full
body or with reference to a particular limb. However, it is not in
dispute that the claimant suffered such a permanent disability as
a result of injuries that he is
not in a position of doing the
specialised job of designing, refrigeration and air conditioning.
For
the said reason, the claimant's services were terminated by
his employer but that does not mean
that the claimant is not
capable to do any other job including the desk job. Having
qualification
of BSc degree and postgraduate diploma in
Mechanical Engineering, he can perform any job
where
application of mind is required than any physical work.

13. In view of the forgoing discussion we find no grounds made

out to interfere with the finding
of the High Court which
determined the percentage of loss of earning capacity to 70%
adopting
the percentage of loss of earning capacity as per the
Workmen's Compensation Act. The total
loss of income was thus
rightly calculated by the High Court at Rs 6, 04,800.

15 Later, in another judgment, i.e. Jakir Hussein v. Sabir, (2015) 7 SCC 252 this court had to consider
the correctness of a compensation assessment based on the High
Court s analysis of the injury to the
victim (a driver who suffered permanent
injury to his arm, impairing movement as well as the wrist,
which rendered him
incapable of driving any vehicle). The High Court had assessed permanent
disablement at 30% though the doctor had certified it to be 55%. This court,
reversing the High Court
order, observed inter alia that:

Due to this injury, the doctor has stated that the appellant had
great difficulty to move his
shoulder, wrist and elbow and pus was
coming out of the injury even two years after the
accident and the
treatment was taken by him. The doctor further stated in his evidence
that the
appellant got delayed joined fracture in the humerus bone of
his right hand with wiring and
nailing and that he had suffered 55%
disability and cannot drive any motor vehicle in future due
to the
same. He was once again operated upon during the pendency of the
appeal before the
High Court and he was hospitalised for 10 days.
The appellant was present in person in the High
Court and it was
observed and noticed by the High Court that the right hand of the
appellant was
completely crushed and deformed. In view of the
doctor's evidence in this case, the Tribunal and
the High Court have
erroneously taken the extent of permanent disability at 30% and
55%,
respectively for the calculation of amount towards the loss of
future earning capacity. No doubt,
the doctor has assessed the
permanent disability of the appellant at 55%. However, it is
important to consider the relevant fact, namely, that the appellant is
a driver and driving the
 motor vehicle is the only means of livelihood
for himself as well as the members of his family.
Further, it is very
crucial to note that the High Court has clearly observed that his
right hand was
completely crushed and deformed.

********* ********* **********

16. In Raj Kumar v. Ajay Kumar [(2011) 1 SCC 343, this Court
specifically gave the illustration of
a driver who has permanent
disablement of hand and stated that the loss of future earnings
capacity would be virtually 100%. Therefore, clearly when it comes
to loss of earning due to
permanent disability, the same may be
treated as 100% loss caused to the appellant since he
will never be
able to work as a driver again. The contention of the respondent
Insurance
Company that the appellant could take up any other
alternative employment is no justification to
avoid their vicarious
liability. Hence, the loss of earning is determined by us at Rs 54,000
per
annum. Thus, by applying the appropriate multiplier as per the
principles laid down by this Court
in Sarla Verma v. DTC [(2009) 6
SCC 121 : (2009) 2 SCC (Civ) 770 : (2009) 2 SCC (Cri) 1002] , the
total loss of future earnings of the appellant will be at Rs 54,000 �
16 = Rs 8,64,000.

16 Recently, in Anthony Alias Anthony Swamy v. Managing Director,

K.S.R.T.C, (2020) SCC OnLine SC
493 where the victim was a painter by profession, a three-judge bench
had followed Raj Kumar v. Ajay
Kumar, (2011) 1 SCC 343 and Nagarajappa v. Divisional
Manager, Oriental Insurance Company
Limited, (2011) 13 SCC 323. The High Court had assessed
the injury to be 25% permanent disability,
although the treating doctor had said
that the injury incurred by the bus passenger (who was earning
Rs. 9000/- per
month) was 75% of the left leg and 37.5% for the whole body. In Raj Kumar24,
the
physical disability of the upper limb was determined as 68% in proportion to
22-23% of the whole-
body. The High Court had assessed the injury as 25% and
granted compensation. However, this court
assessed the injury on the basis that
the disability was 75%, stating as follows:

9. PW.3 had assessed the physical functional disability of the left

leg of the appellant at 75% and
total body disability at 37.5%. The
High Court has considered it proper to assess the
physical
disability at 25% of the whole body only. There is no
discussion for this reduction in percentage,
much less any
consideration of the nature of
permanent functional disability suffered by the
appellant. The extent
of physical functional disability, in the facts of the case has to be
considered in a manner so as to grant just and proper compensation
to the appellant towards
loss of future earning. The earning capacity
of the appellant as on the date of the accident
stands completely
negated and not reduced. He has been rendered permanently
incapable of
working as a painter or do any manual work.
Compensation for loss of future earning, therefore
has to be proper
and just to enable him to live a life of dignity and not compensation
which is
elusive. If the 75% physical disability has rendered the
appellant permanently disabled from
pursuing his normal vocation
or any similar work, it is difficult to comprehend the grant of
compensation to him in ratio to the disability to the whole body. The
appellant is therefore held
entitled to compensation for loss of future
earning based on his 75% permanent physical
functional disability recalculated with the salary of Rs. 5,500/- with
multiplier of 14 at Rs.
6,93,000/-.

17 The question of amount of compensation payable to one suffering injury

as a result of motor
vehicle accident was considered in Syed Sadiq & Ors. v.
Divisional Manager, United Insurance
Company Limited, (2014) 2 SCC 735, when this Court
had to apply the correct standard for awarding
compensation for loss of future
prospects for a vegetable vendor, whose right leg had to be
amputated, as a
result of a motor accident. The High Court had considered the disability to be
65%.
This court held as follows:
 7. Further, the appellant claims that he was working as a vegetable
vendor. It is true that a
vegetable vendor might not require mobility
to the extent that he sells vegetables at one place.
However, the
occupation of vegetable vending is not confined to selling vegetables
from a
particular location. It rather involves procuring vegetables
from the whole-sale market or the
farmers and then selling it off in
the retail market. This often involves selling vegetables in the
cart
which requires 100% mobility. But even by conservative approach, if
we presume that the
vegetable vending by the appellant/claimant
involved selling vegetables from one place, the
claimant would
require assistance with his mobility in bringing vegetables to the
market place
which otherwise would be extremely difficult for him
with an amputated leg. We are required to
be sensitive while dealing
with manual labour cases where loss of limb is often equivalent to
loss of livelihood. Yet, considering that the appellant/claimant is still
capable to fend for his
livelihood once he is brought in the market
place, we determine the disability at 85% to
determine the loss of
income.

8. The appellant/claimant in his appeal further claimed that he had

been earning [pic]10,000/-
p.m. by doing vegetable vending work.
The High Court however, considered the loss of income
at
[pic]3500/- p.m. considering that the claimant did not produce any
document to establish his
loss of income. It is difficult for us to
convince ourselves as to how a labour involved in an
unorganized
sector doing his own business is expected to produce documents to
prove his
monthly income.

18 In Arvind Kumar Mishra v. New India Assurance Co. Ltd., (2010) 10 SCC 254 the appellant
at the
time of accident was a final year engineering (Mechanical) degree student
in a reputed college. He
was a brilliant student and had passed all his semester
examinations with distinction. He suffered
grievous injuries and remained in a
coma for about two months; his studies were disrupted as he was
moved to
different hospitals for surgeries. For many months, his condition remained
serious; his right
hand was amputated and vision seriously affected. This court
accepted his claim and held that he
was permanently disabled to the extent of
70%. In Mohan Soni v. Ram Avtar Tomar, (2012) 2 SCC 267
again a case of injury entailing loss
of a leg, the court held that medical evidence of the extent of
disability should
not be mechanically scaled down:

8. On hearing the counsel for the parties and on going through the
materials on record, we are of
the view that both the Tribunal and
the High Court were in error in pegging down the disability of
the
appellant to 50% with reference to Schedule I of the Workmen's
Compensation Act, 1923. In
the context of loss of future earning, any
physical disability resulting from an accident has to be
judged with
reference to the nature of work being performed by the person
suffering the
disability. This is the basic premise and once that is
grasped, it clearly follows that the same
injury or loss may affect two
different persons in different ways. Take the case of a marginal
farmer who does his cultivation work himself and ploughs his land
with his own two hands; or
the puller of a cycle-rickshaw, one of the
main means of transport in hundreds of small towns all
over the
country. The loss of one of the legs either to the marginal farmer or
the cycle-rickshaw-
puller would be the end of the road insofar as
their earning capacity is concerned. But in case of
a person engaged
in some kind of desk work in an office, the loss of a leg may not have
the
same effect. The loss of a leg (or for that matter the loss of any
limb) to anyone is bound to have
very traumatic effects on one's
personal, family or social life but the loss of one of the legs to a
person working in the office would not interfere with his
work/earning capacity in the same
degree as in the case of a
marginal farmer or a cycle-rickshaw-puller.

********* ********* *********

10. This Court in K. Janardhan case [(2008) 8 SCC 518 : (2008) 2

SCC (L&S) 733] , set aside the
High Court judgment and held
that the tanker driver had suffered 100% disability and
incapacity
 in earning his keep as a tanker driver as his right leg
was amputated from the knee and,
accordingly, restored the
order passed by the Commissioner of Workmen's Compensation.
In K.
Janardhan [(2008) 8 SCC 518 : (2008) 2 SCC (L&S) 733]
this Court also referred to and relied
upon an earlier decision of
the Court in Pratap Narain Singh Deo v. Srinivas Sabata [(1976)
1 SCC
289 : 1976 SCC (L&S) 52] in which a carpenter who
suffered an amputation of his left arm from
the elbow was held to
have suffered complete loss of his earning capacity.

******** ********* ********

13. Any scaling down of the compensation should require

something more tangible than a
hypothetical conjecture that
notwithstanding the disability, the victim could make up for the
loss
of income by changing his vocation or by adopting another
means of livelihood. The party
advocating for a lower amount of
compensation for that reason must plead and show before the
Tribunal that the victim enjoyed some legal protection (as in the
case of persons covered by the
Persons with Disabilities (Equal
Opportunities, Protection of Rights and Full Participation) Act,
1995) or in case of the vast multitude who earn their livelihood
in the unorganised sector by
leading cogent evidence that the
victim had in fact changed his vocation or the means of his
livelihood and by virtue of such change he was deriving a certain
income.

14. The loss of earning capacity of the appellant, according to

us, may be as high as 100% but in
no case it would be less than
90%. We, accordingly, find and hold that the compensation for
the
loss of the appellant's future earnings must be computed on
that basis. On calculation on that
basis, the amount of
compensation would come to Rs 3,56,400 and after addition of a
sum of Rs
30,000 and Rs 15,000 the total amount would be Rs
4,01,400. The additional compensation
amount would carry
interest at the rate of 9% per annum from the date of filing of the
claim
petition till the date of payment. The additional amount of
compensation along with interest
should be paid to the appellant
without delay and not later than three months from today.

19 One more decision, Sandeep Khanduja v. Atul Dande, 2017 (3) SCC 351
too had dealt with
the
precise aspect of assessing the quantum of permanent disablement. The
victim was aged about 30
years, working as a chartered accountant for various
institutions for which he was paid professional
fees. The injuries suffered by
him resulted in severe impairment of movement; he had problems in
climbing
stairs, back trouble while sleeping, etc. A rod was implanted in his leg. He
suffered 70%
permanent disability, and mental and physical agony. This court
enhanced the compensation,
observing the proper manner to calculate the extent
of disability:

9. The percentage of permanent disability is expressed by the

doctors with reference to the
whole body, or more often than not,
with reference to a particular limb. When a disability
certificate
states that the injured has suffered permanent disability to an
extent of 45% of the left
lower limb, it is not the same as 45%
permanent disability with reference to the whole body. The
extent
of disability of a limb (or part of the body) expressed in terms of
a percentage of the total
functions of that limb, obviously cannot
be assumed to be the extent of disability of the whole
body. If
there is 60% permanent disability of the right hand and 80%
permanent disability of left
leg, it does not mean that the extent
of permanent disability with reference to the whole body is
140%
(that is 80% plus 60%). If different parts of the body have
suffered different percentages of
disabilities, the sum total
thereof expressed in terms of the permanent disability with
reference
to the whole body cannot obviously exceed 100%.
10. Where the claimant suffers a permanent
disability as a result
of injuries, the assessment of compensation under the head of
loss of
future earnings would depend upon the effect and impact
of such permanent disability on his
earning capacity. The
Tribunal should not mechanically apply the percentage of
permanent
disability as the percentage of economic loss or loss
of earning capacity. In most of the cases,
the percentage of
economic loss, that is, the percentage of loss of earning capacity,
arising from
a permanent disability will be different from the
percentage of permanent disability. Some
Tribunals wrongly
assume that in all cases, a particular extent (percentage) of
permanent
disability would result in a corresponding loss of
earning capacity, and consequently, if the
evidence produced
show 45% as the permanent disability, will hold that there is
45% loss of
future earning capacity. In most of the cases,
equating the extent (percentage) of loss of earning
capacity to
the extent (percentage) of permanent disability will result in
award of either too low
or too high a compensation.
11. What requires to be assessed by the Tribunal is the effect of the
permanent disability on the earning capacity of the injured; and
after assessing the loss of
earning capacity in terms of a
percentage of the income, it has to be quantified in terms of
money, to arrive at the future loss of earnings (by applying the
standard multiplier method used
to determine loss of
dependency). We may however note that in some cases, on
appreciation of
evidence and assessment, the Tribunal may find
that the percentage of loss of earning capacity
as a result of the
permanent disability, is approximately the same as the
percentage of
permanent disability in which case, of course, the
Tribunal will adopt the said percentage for
determination of
compensation. The crucial factor which has to be taken into
consideration,
thus, is to assess as to whether the permanent
disability has any adverse effect on the earning
capacity of the
injured. In this sense, the MACT approached the issue in right
direction by taking
into consideration the aforesaid test.
However, we feel that the conclusion of the MACT, on the
application of the aforesaid test, is erroneous. A very myopic
view is taken by the MACT in taking
the view that 70%
permanent disability suffered by the appellant would not impact
the earning
capacity of the appellant. A person who is engaged
and cannot freely move to attend to his
duties may not be able to
match the earning in comparison with the one who is healthy and
bodily abled. Movements of the appellant have been restricted to
a large extent and that too at a
young age. Though the High
Court recognised this, it did not go forward to apply the
principle of
multiplier. We are of the opinion that in a case like
this and having regard to the injuries suffered
by the appellant,
there is a definite loss of earning capacity and it calls for grant
of
compensation with the adoption of multiplier method, as held
by this Court in Yadava Kumar v
Divisional Manager, National
Insurance Co. Ltd [2010 (10) SCC 341]:

9. We do not intend to review in detail state of

authorities in relation to assessment of all
damages for
personal injury. Suffice it to say that the basis of
assessment of all damages for
personal injury is
compensation. The whole idea is to put the claimant in the
same position as
he was insofar as money can. Perfect
compensation is hardly possible but one has to keep in
mind that the victim has done no wrong; he has suffered
at the hands of the wrongdoer and the
court must take
care to give him full and fair compensation for that he had
suffered.

10. In some cases for personal injury, the claim could be

in respect of lifetime's earnings lost
because, though he
will live, he cannot earn his living. In others, the claim
may be made for
partial loss of earnings. Each case has
to be considered in the light of its own facts and at the
end, one must ask whether the sum awarded is a fair and
reasonable sum. The conventional
basis of assessing
compensation in personal injury cases and that is now
recognised mode as
to the proper measure of
compensation is taking an appropriate multiplier of an
appropriate
multiplicand. In that case, after following
the judgment in Kerala SRTC v. Susamma Thomas
(1994)
2 SCC 176, the Court chose to apply multiplier of 18
keeping in view the age of the victim,
who as 25 years at
the time of the accident.
In the instant case, the MACT had quantified the
income of the
appellant at Rs.10,000, i.e. Rs.1,20,000 per annum. Going by the age
of the
appellant at the time of the accident, multiplier of 17
would be admissible. Keeping in view that
the permanent
disability is 70%, the compensation under this head would be
worked out at
Rs.14,28,000. The MACT had awarded
compensation of Rs.70,000 for permanent disability,
which stands
enhanced to Rs.14,28,000. For mental and physical agony and
frustration and
 disappointment towards life, the MACT has
awarded a sum of Rs.30,000, which we enhance to
Rs.1,30,000.

20 Courts should not adopt a stereotypical or myopic approach, but instead,

view the matter taking
into account the realities of life, both in the assessment
of the extent of disabilities, and
compensation under various heads. In the
present case, the loss of an arm, in the opinion of the court,
resulted in severe
income earning impairment upon the appellant. As a typist/data entry operator,
full
functioning of his hands was essential to his livelihood. The extent of his
permanent disablement was
assessed at 89%; however, the High Court halved it
to 45% on an entirely wrong application of some
proportionate principle,
which was illogical and is unsupportable in law. What is to be seen, as
emphasized by decision after decision, is the impact of the injury upon the
income generating
capacity of the victim. The loss of a limb (a leg or arm) and
its severity on that account is to be judged
in relation to the profession, vocation
or business of the victim; there cannot be a blind arithmetic
formula for ready
application. On an overview of the principles outlined in the previous decisions,
it is
apparent that the income generating capacity of the appellant was
undoubtedly severely affected.
Maybe, it is not to the extent of 89%, given that
he still has the use of one arm, is young and as yet,
hopefully training (and
rehabilitating) himself adequately for some other calling. Nevertheless, the
assessment of disability cannot be 45%; it is assessed at 65% in the
circumstances of this case.

21 This court is also of the opinion that the courts below needlessly
discounted the evidence
presented by the appellant in respect of the income
earned by him. Working in the informal sector as
he did, i.e. as a typist/data
entry operator in court premises in Delhi, his assertion about earning
Rs.12,000/-
could not be discarded substantially, to the extent of bringing it down to Rs.
8,000/- per
month. Such self employed professionals, it is noticeable, were not
obliged to file income tax returns
for AY 2011-2012, when no levy existed for
anyone earning less than Rs. 1,60,000/- per annum.29 The
advocate who deposed
about the earnings of the appellant was believed to the extent that the tribunal
fixed the appellant s monthly earnings at Rs. 8,000/-. If one takes into account
contemporary
minimum wages for skilled workers (which was in the range of Rs.
8,500/-) the realistic figure would
be Rs.10,000/- per month. Adding future
prospects at 40%30, the income should be taken as
Rs.14,000 for the purpose of
calculation of compensation. Accordingly, this court finds that the
compensation payable for the disability of loss of an arm (assessed at 65%)
would be Rs.19,65,600/-
(i.e., Rs. 14,000/- x 12 x 65% x 18) or Rupees Nineteen
lakhs sixty five thousand six hundred only.

22 In parting, it needs to be underlined that Courts should be mindful that a

serious injury not only
permanently imposes physical limitations and disabilities
but too often inflicts deep mental and
emotional scars upon the victim. The
attendant trauma of the victim s having to live in a world entirely
different from
the one she or he is born into, as an invalid, and with degrees of dependence on
others,
robbed of complete personal choice or autonomy, should forever be in
the judge's mind, whenever
tasked to adjudge compensation claims. Severe
limitations inflicted due to such injuries undermine
the dignity (which is now
recognized as an intrinsic component of the right to life under Article 21) of
the
individual, thus depriving the person of the essence of the right to a wholesome
life which she or
he had lived, hitherto. From the world of the able bodied, the
victim is thrust into the world of the
disabled, itself most discomfiting and
unsettling. If courts nit-pick and award niggardly amounts
oblivious of these
circumstances, there is resultant affront to the injured victim.

23 The High Court s assessment of amounts payable under other heads (such
as compensation for
medical expenses, compensation for pain and suffering,
compensation for special diet and attendant,
conveyance charges, loss of
amenities and enjoyment of life, disfigurement and loss of income during
treatment), do not call for interference. In view of the above conclusions, the
impugned judgment is
hereby modified; the sum of Rs.19,65,600/- shall be
substituted in place of the amount of
Rs.7,77,600/-, considering the enhancement
towards loss of earning capacity and future prospects.
24 The appeal is partly allowed; the impugned judgment stands modified in
the above terms. There
shall be no order on costs.
 5

2020 (0) AIJEL-SC 66509

SUPREME COURT OF INDIA

Hon'ble Judges:Ashok Bhushan and R.Subhash Reddy JJ.

New India Assurance Company Limited Versus Somwati : Sangita : Azmati Khatoon : Umarani : Pinki :
Nanak Chand : Rinku Devi

CIVIL APPEAL No. 3093 of 2020 ; 3094 of 2020 ; 3095 of 2020 ; 3096 of 2020 ; 3097 of 2020 ; 3098 of
2020 ; 3099 of 2020 ; *J.Date :- SEPTEMBER 07, 2020

MOTOR VEHICLES ACT, 1988 Section - 166 , 168

(a) Motor Vehicles Act, 1988 - S. 166, 168 - motor accident - compensation - expression
'compensation' is a comprehensive term which includes a claim for the damages - compensation is
by way of atonement for the injury caused - claimant in a claim for award of compensation u/s. 166,
is entitled for just compensation - just compensation has to be equitable and fair - loss of life and
limb can never be compensated in an equal measure - but statutory provisions under Motor Vehicles
Act is a social piece of legislation which has been enacted with intent and object to facilitate the
claimants to get redress for the loss of the member of family, compensate the loss in some measure
and to compensate the claimant to a reasonable extent. (Para 22,23)

(b) Motor Vehicles Act, 1988 - S. 166, 168 - motor accident - award of compensation under different
heads - loss of consortium - loss of love and affection - expression 'consortium' to include spousal
consortium, parental consortium as well as filial consortium - loss of love and affection is
comprehended in loss of consortium , hence, there is no justification to award compensation
towards loss of love and affection as a separate head - thus, impugned judgments of High Court
awarding consortium to each of the claimants in accordance with law which does not warrant any
interference in this appeal - however, there is no justification for award of compensation under
separate head loss of love and affection - thus, appeal filed by appellant deserves to be allowed
insofar as award of compensation under the head loss of love and affection - award of compensation
under the conventional head loss of love and affection set aside - Motor Accident Claims Tribunals
directed to recompute the amount payable and take further steps in accordance with law - appeals
partly allowed. (Para 33,34,38,40)

Imp.Para: [ 22 ] [ 23 ] [ 33 ] [ 34 ] [ 38 ] [ 40 ]

Cases Referred To :

1. General Manager Kerala State Road Transport Corporation, Trivandrum Vs Susamma

Thomas(Mrs) And Others, 1994 2 SCC 176 : 1994 AIR SC 1631 : 1993 (4) Scale 643 : JT 1993
(Supp) 573 : 1994 AIR SCW 1356
2. Sangita Arya And Others Vs. Oriental Insurance Company Ltd. And Others, 2020 0 SCC(Online)
513
Cases Relied on :

1. Magma General Insurance Company Ltd. Vs. Nanu Ram @ Chuhru Ram And Ors., 2018 18 SCC
130 : 2018 (11) Scale 247 : JT 2018 (9) 195 : 2019 (1) Supreme 262 : 2019 (3) SCC(Cri) 153
2. National Insurance Company Ltd. Vs. Pranay Sethi And Others, 2017 16 SCC 680 : 2017 AIR SC
5157 : 2017 (13) Scale 12 : JT 2017 (10) 450 : 2017 (8) Supreme 107
3. Sarla Verma (Smt) And Others Vs. Delhi Transport Corporation And Another, 2009 6 SCC 121 :
2009 AIR SC 3104 : 2009 (6) Scale 129 : JT 2009 (6) 495 : 2009 (5) SCR 1098
4. United India Insurance Company Ltd. Vs. Satinder Kaur Alias Satvinder Kaur And Others, 2020 0
SCC(Online) 410

Equivalent Citation(s):
2020 (9) SCC 644 : 2020 (10) Scale 728

JUDGMENT :-

ASHOK BHUSHAN, J.

1 Leave granted.

2 These appeals raising common questions of law

have been heard together and are being decided by
this common judgment. For deciding these appeals,
it is sufficient to notice the facts in detail in
Civil
Appeal No /2020(arising out of
SLP(C)No.23478 of 2019), New India Assurance
Company Limited
Versus Smt. Somwati and Others and
brief facts in other appeals.

3 All these appeals have been filed by three

Insurance Companies, i.e., New India Assurance
Company
Limited, Cholamandalam MS General Insurance
Company Ltd. and The Oriental Insurance Company
Ltd. questioning the judgments of the High Courts
arising out of the award by Motor Accident Claims
Tribunal (MACT) with regard to the compensation
awarded in favour of the claimants under two
heads,
i.e., Loss of Consortium and loss of love and
affection.

Civil Appeal NO /2020(arising out of

SLP(C)No.23478 of 2019), New India Assurance
Company
Limited versus Smt. Somwati and Others

4 Ram Jiyawan, the husband of Smt. Somwati died

in a Motor Vehicle accident on 06.12.2001 leaving
behind his widow Smt. Somwati and seven minor
children. Claim petition No.7 of 2002 was filed
under
Section 166 of Motor Vehicles Act, 1988 ,
claiming compensation of Rs.15,25,000/-. The MACT
by
award dated 22.03.2003 allowed a claim of Rs.
1,67,000/- with 9% interest. An appeal was filed
by
Smt. Somwati Devi and others in the High Court
being F.A.F.O.No.1894 of 2003. The High Court
allowed the appeal of the claimants and awarded a
compensation of Rs.12,54,000/-. Against the
judgment of the High Court dated 25.02.2019, this
appeal has been filed by the Insurance Company.
The
grant of compensation under two heads has been
challenged in this appeal, i.e., item No. (vi) and
(viii), which are to the following effect:-

(vi)Loss of love and affection=

Rs.4,00,000/-(Rs.50,000/- to each of the
eight claimants).

(viii) Loss of Parental Consortium to

claimant/appellant nos.2 to 8=
Rs.2,80,000/-(Rs.40,000/- to
each of the
claimants).

5 This Court while issuing notice on 24.04.2019

passed following order:-
 ORDER

Delay condoned.

Issue notice returnable in four weeks

limited to the issue whether both
consortium and loss of
love and affection
could have been awarded by the High Court
in this case.

Dasti service, in addition, is

permitted.

Until further orders, there shall be

stay of 2 payment of the compensation
amount payable to the
claimants towards
clause (vi) of the impugned judgment which
reads as under :

Loss of love and affection=Rs.

4,00,000/- (Rs. 50,000/- to each of the
eight claimants)

6 In pursuance of notice issued by this Court,

the respondents have appeared and filed reply as
well as
written submissions.

Civil Appeal No ../2020(arising out of

SLP(C)No.4801 of 2020), New India Assurance Company
Limited Versus Sangita Devi and Others

7 Sanjay Kumar, husband of the respondent

Sangeeta Devi died of Motor Vehicle accident on
12.01.2015. Claim Petition bearing MACP No.862 of
2016 was filed by the respondents, which claim
petition was allowed by Motor Accident Claims
Tribunal, granting a compensation of Rs.17,71,000/-
with interest of 9%. Claimants filed an appeal in
the High Court. The High Court following the
judgment of this Court in Magma General Insurance
Company ltd. Versus Nanu Ram @ Chuhru Ram
and Ors.,
(2018) 18 SCC 130, granted compensation for 'loss
of love and affection' at the rate of
Rs.50,000/-
to each of eight claimants and similarly, under the
head Loss of consortium at the rate of
Rs.40,000/- to all the eight claimants. Aggrieved
by the judgment of the Delhi High Court, Insurance
Company has filed appeal challenging the order of
the High Court.

Civil Appeal No /2020(arising out of

SLP(C)No.4643 of 2020),New India Assurance Company
Limited Versus Azmati Khatoon and Others

8 Mohd. Hasibul Bassan, died in a Motor Vehicle

accident on 29.10.2007. Claim Petition was filed by
respondents which has been allowed by Motor
Accident Claims Tribunal granting a compensation of
Rs.17,32,776/- with interest. The appellant filed
an appeal in the High Court. The High Court granted
compensation under the head loss of love and
affection at the rate of Rs.50,000/- to each seven
claimants and Rs.40,000/- each to seven claimants
under the head loss of consortium . Aggrieved by
the judgment of the Delhi High Court, Insurance
Company is in appeal.

Civil Appeal No /2020 (arising out of

SLP(C)No.5441 of 2020), Cholamandalam Ms General
Insurance Company Limited Versus Umarani and Others

9 The deceased Krishnasamy met with a vehicular

accident on 07.09.2014 who subsequently died.
Claim
petition was filed by the respondents which has
been allowed by Motor Vehicle Accident
Compensation
Tribunal granting compensation of Rs.13,60,000/-.
Appeal was filed by the Insurance
Company. The
award under the head loss of consortium , an
amount of Rs.One Lakh and award under
the head
loss of love and affection an amount of Rs. Three
Lakhs was confirmed by the High Court,
which is
challenged by Insurance Company in this appeal.

Civil Appeal No /2020(arising out of

SLP(C)No.6381 of 2020),New India Assurance Company
Limited Versus Smt. Pinki and Others
10 One Dinesh Kumar met with a motor vehicle
accident on 11.06.2014 and died. Claim Petition
filed
by the respondents was allowed by the Motor
Accident Claims Tribunal granting an amount of
Rs.13,01,776/-. Claimants filed an appeal before
the High Court which enhanced the compensation.
The
High Court granted compensation under the head
loss of love and affection Rs.50,000/- each to
four claimants and under the head loss of
consortium at the rate of Rs.40,000/- each to four
claimants. Aggrieved by the judgment of the High
Court, Insurance Company is in this appeal.

Civil Appeal No /2020(arising out of

SLP(C)No.7556 of 2020), New India Assurance Company
Limited Versus Nanak Chand and Others

11 Gaurav died in a motor vehicle accident on

23.09.2010. Claim petition was filed by the parents
of
the deceased, which was allowed granting
compensation of Rs.4,83,348/-. Claimants filed an
appeal
in the High Court which was allowed. The
High Court granted compensation of Rs.50,000/- each
to
both the claimants under the head loss of love
and affection and Rs.40,000/- each to both the
claimants under the head loss of consortium .
Aggrieved by the judgment of the High Court, this
appeal has been filed.

Civil Appeal No /2020(arising out of

SLP(C)No.8250 of 2020),The Oriental Insurance
Company
Limited Versus Smt. Rinku Devi and Others

12 Birbal Kumar met with an accident on

27.07.2008 resulting in his death. Claim petition
filed by the
respondents claiming Rs.Twenty lakhs
was allowed by the Motor Accident Claims Tribunal
granting
compensation of Rs.5,80,000/-. Insurance
company filed an appeal. The Tribunal has awarded
filial
consortium at the rate of Rs.40,000/- to
each of the claimants, i.e., wife, two children and
father
totaling Rs.1,60,000/-. The High Court in
the appeal filed by the Insurance Company further
enhanced
the compensation under the head loss of
love and affection at the rate of Rs.50,000/- to
each of four
claimants, i.e., enhancing total
amount by Rs. Two Lakhs. Insurance Company
aggrieved by the
judgment of the High Court has
come up with this appeal.

13 We have heard learned counsel for the

appellant as well as learned counsel for the
claimants.

14 In all the appeals, only issue to be

considered is with regard to award of compensation
to the
claimant under two heads, i.e., (a)loss of
consortium and (b) loss of love and affection. With
regard to
consortium , the question is as to
whether it is only the wife who is entitled for
consortium or the
consortium can be awarded to
children and parents also.

15 Learned counsel for the appellants contends

that the Constitution Bench of this Court in
National
Insurance Company Ltd. Versus Pranay Sethi
and Others, (2017) 16 SCC 680, has laid down that
there
are only three conventional heads namely
(i) loss of estate , (ii) loss of consortium and
(iii) funeral
expenses , for which the amount
determined by the Constitution Bench is
Rs.15,000/-, Rs.40,000/- and
Rs.15,000/-
respectively. Thus, the total amount under
conventional head was Rs.70,000/- and the
amount
under conventional heads could not exceed
Rs.70,000/-.

16 It is submitted that the amount granted under

the head loss of love and affection is wholly
without
jurisdiction and further amount granted
under the head consortium could not be more than
Rs.40,000/- and the amount of consortium is only
payable to wife who is entitled to Rs.40,000/- and
the Tribunals and the High Courts committed error
in awarding amount of consortium to each of the
claimant, i.e., wife, children and parents.

17 It is submitted that even after the

Constitution Bench Judgment, this Court has allowed
amounts
under conventional heads as loss of state Rs.15,000/-, consortium Rs.40,000/- and funeral
expenses
Rs.15,000/-. It is submitted that after
the judgment of Pranay Sethi, this Court had
confined the
payment under conventional heads as
per judgment of Pranay Sethi, the impugned judgment
of the
High Court awarding compensation under the
head loss of love and affection as well as
consortium to
each of the claimant is contrary to
the law laid down by this Court and has to be set
aside.

18 An additional submission has been made by

learned counsel appearing for the appellant in The
Oriental Insurance Company ltd. Versus Smt. Rinku
Devi and others. Learned counsel submits that
although MACT has erred in allowing consortium to
four claimants at the rate of Rs.40,000/- but the
High Court in the appeal filed by the Insurance
Company further enhanced the compensation under
the
head loss of love and affection . The compensation
could not have been enhanced on the appeal
filed by
the insurance company when the claimants have not
filed an appeal. Learned counsel further
submits
that the High Court further committed an error in
directing the statutory amount deposited by
the
appellant along with the appeal to be deposited in
AASRA fund opened in Delhi High Court which
ought
not to have been directed since the appellant has
raised substantial questions of law and the
appeal
deserves to be allowed.

19 Learned counsel appearing for the claimants

refuting the submissions of counsel for the
appellant
contends that the award to each of the
claimants at the rate of Rs.40,000/- under the head
consortium
is in accordance with law laid down by
this Court. It is submitted that the award of
compensation
under the head consortium cannot be
given a narrow interpretation. The amount under the
head
consortium has rightly been given not only
to wife but children and parents. Learned counsel
for the
claimant has supported the judgments of the
High Court.

20 Learned counsel for the parties have also

placed reliance on various judgments of this Court,
which shall be referred to while considering the
submissions in detail.

21 We have considered the submission of the

learned counsel for the parties and have perused
the
record.

22 The expression compensation is a

comprehensive term which includes a claim for the
damages.
Compensation is by way of atonement for
the injury caused.

23 The claimant in a claim for award of

compensation under Section 166 of Motor Vehicles
Act, 1988,
is entitled for just compensation. The
just compensation has to be equitable and fair. The
loss of life
and limb can never be compensated in
an equal measure but the statutory provisions under
Motor
Vehicles Act is a social piece of legislation
which has been enacted with intent and object to
facilitate
the claimants to get redress for the
loss of the member of family, compensate the loss
in some
measure and to compensate the claimant to a
reasonable extent.

24 We may refer to the judgment of this Court in

General Manager Kerala State Road Transport
Corporation, Trivandrum Versus Susamma Thomas(Mrs)
and others, (1994) 2 SCC 176. This court
considering the concept of compensation under Motor
Vehicle Act, 1939, laid down following in
paragraph
5:-

"5....The determination of the quantum

must answer what contemporary society
would deem to
be a fair sum such as would
allow the wrongdoer to hold up his head
among his among his
neighbours and say
with their approval that he has done the
fair thing . The amount awarded
must not
be niggardly since the law values life
and limb in a free society in generous
scales . All
this means that the sum
awarded must be fair and reasonable by
accepted legal standards.

25 In the above case also, this Court awarded the

amount under the conventional head of loss of
consortium .

26 Another judgment which needs to be noted is

the judgment of this Court in Sarla Verma (Smt) and
Others Versus Delhi Transport Corporation and
Another, (2009) 6 SCC 121, in which judgment in
paragraph 16, this Court while elaborating the
just compensation laid down following: -

"5.... Just compensation is adequate

compensation which is fair and equitable,
on the facts and
circumstances of the
case, to make good the loss suffered as a
result of the wrong, as far as
money can
do so, by applying the well-settled
principles relating to award of
compensation. It is
not intended to be a
bonanza, largesse or source of profit.

27 This court also awarded an amount under the

head loss of consortium to the wife.

28 We need to notice the Constitution Bench

judgment in National Insurance Company Ltd.(supra)
which case notices the earlier judgments of this
Court where compensation was awarded towards
loss
of consortium. In paragraph 46, the following was
laid down: -

"46. Another aspect which has created

confusion pertains to grant of loss of
estate, loss of
consortium and funeral
expenses. In Santosh Devi, the two-Judge
Bench followed the traditional
method and
granted Rs.5000/- for transportation of
the body, Rs.10,000/- as funeral expenses
and Rs.10,000/- as regards the loss of
consortium. In Sarla Verma, the Court
granted Rs.5000/-
under the head of loss
of estate, Rs.5000/- towards funeral
expenses and Rs.10,000/- towards
loss of
consortium. In Rajesh (2013) 9 SCC 54, the
Court granted Rs.1,00,000/- towards loss
of
consortium and Rs.25,000/- towards
funeral expenses. It also granted
Rs.1,00,000/- towards
loss of care and
guidance for minor children. The Court
enhanced the same on the principle that
a
formula framed to achieve uniformity and
consistency on a socio-economic issue has
to be
contrasted from a legal principle
and ought to be periodically revisited as
has been held in
Santosh Devi (2012) 6 SCC
421. On the principle of revisit, it fixed
different amount on
conventional heads.
What weighed with the Court is factum of
inflation and the price index. It
has also
been moved by the concept of loss of
consortium. We are inclined to think so,
for what
it states in that regard. We
quote: (Rajesh case):-

17...In legal parlance,

consortium is the right of the
spouse to the company, care, help,
comfort,
guidance, society,
solace, affection and sexual
relations with his or her mate.
That non-pecuniary
head of damages
has not been properly understood
by our courts. The loss of
companionship,
love, care and
protection, etc., the spouse is
entitled to get, has to be
compensated
appropriately. The
concept of non-pecuniary damage
for loss of consortium is one of
the major
heads of award of
compensation in other parts of the
world more particularly in the
United
States of America,
Australia, etc. English courts
have also recognised the right of
a spouse to
get compensation even
during the period of temporary
disablement. By loss of
consortium, the
courts have made
an attempt to compensate the loss
of spouse's affection, comfort,
solace,
companionship, society,
assistance, protection, care and
sexual relations during the future
years.
Unlike the compensation
awarded in other countries and
other jurisdictions, since the
legal heirs
are otherwise
adequately compensated for the
pecuniary loss, it would not be
proper to award a
major amount
under this head. Hence, we are of
the view that it would only be
just and
reasonable that the
courts award at least rupees one
lakh for loss of consortium.

29 In paragraph 52, the Constitution Bench opined

that reasonable figures on conventional head
namely
loss of estate , loss of consortium and funeral
expenses should be Rs.15,000/-, Rs.40,000/-
and
Rs.15,000/- respectively. In paragraph 52,
following has been laid down: -

52. As far as the conventional heads

are concerned, we find it difficult to
agree with the view
expressed in Rajesh.
It has granted Rs. 25,000/- towards
funeral expenses, Rs. 1,00,000/- loss of
consortium and Rs. 1,00,000/- towards loss
of care and guidance for minor children.
The head
relating to loss of care and
minor children does not exist. Though
Rajesh refers to Santosh Devi,
it does not
seem to follow the same. The conventional
and traditional heads, needless to say,
 cannot be determined on percentage basis
because that would not be an acceptable
criterion.
Unlike determination of income,
the said heads have to be quantified. Any
quantification must
have a reasonable
foundation. There can be no dispute over
the fact that price index, fall in bank
interest, escalation of rates in many a
field have to be noticed. The court cannot
remain oblivious
to the same. There has
been a thumb rule in this aspect.
Otherwise, there will be extreme
difficulty in determination of the same
and unless the thumb rule is applied,
there will be
immense variation lacking
any kind of consistency as a consequence
of which, the orders
passed by the
tribunals and courts are likely to be
unguided. Therefore, we think it seemly to
fix
reasonable sums. It seems to us that
reasonable figures on conventional heads,
namely, loss of
estate, loss of consortium
and funeral expenses should be Rs.
15,000/-, Rs. 40,000/- and Rs.
15,000/-
respectively. The principle of revisiting
the said heads is an acceptable principle.
But
the revisit should not be fact-centric
or quantum-centric. We think that it would
be condign that
the amount that we have
quantified should be enhanced on
percentage basis in every three
years and
the enhancement should be at the rate of
10% in a span of three years. We are
disposed to hold so because that will
bring in consistency in respect of those
heads.

30 In paragraph 59.8, the Court further held that

the amount of conventional head should be enhanced
at the rate of 10% every three year. In paragraph
59.8, following was held:-

"59.8. Reasonable figures on conventional

heads, namely, loss of estate, loss of
consortium and
funeral expenses should be
Rs. 15,000/-, Rs. 40,000/- and Rs.
15,000/- respectively. The
aforesaid
amounts should be enhanced at the rate of
10% in every three years.

31 The next judgment which needs to be noted is

Magma General Insurance Company Limited versus
Nanu
Ram alias Chuhru Ram and others, (2018) 18 SCC 130,
the concept of consortium was
explained in
paragraphs 21,22 and 23 which are as follows: -

"21. A Constitution Bench of this Court

in Pranay Sethi (supra) dealt with the
various heads
under which compensation is
to be awarded in a death case. One of
these heads is Loss of
Consortium. In
legal parlance, consortium is a
compendious term which encompasses
spousal
consortium , parental
consortium ,and filial consortium . The
right to consortium would include
the
company, care, help, comfort, guidance,
solace and affection of the deceased,
which is a
loss to his family. With
respect to a spouse, it would include
sexual relations with the deceased
spouse.

21.1. Spousal consortium is generally

defined as rights pertaining to the
relationship of a
husband-wife which
allows compensation to the surviving
spouse for loss of company, society,
cooperation, affection, and aid of the
other in every conjugal relation.

21.2. Parental consortium is granted to

the child upon the premature death of a
parent, for loss
of parental aid,
protection, affection, society,
discipline, guidance and training.

21.3. Filial consortium is the right of

the parents to compensation in the case of
an accidental
death of a child. An
accident leading to the death of a child
causes great shock and agony to the
parents and family of the deceased. The
greatest agony for a parent is to lose
their child during
their lifetime.
Children are valued for their love,
affection, companionship and their role in
the
family unit.

22. Consortium is a special prism

reflecting changing norms about the
status and worth of
actual
relationships. Modern jurisdictions
world over have recognized that the
value of a child s
consortium far exceeds
the economic value of the
compensation awarded in the case
of the
death of a child. Most
jurisdictions therefore permit parents to
be awarded compensation under
 loss of
consortium on the death of a child.
The amount awarded to the
parents is a
compensation for loss of
the love, affection, care and
companionship of the deceased child.

23. The Motor Vehicles Act is a beneficial

legislation aimed at providing
relief to the victims or
their
families, in cases of genuine claims. In
case where a parent has lost their minor
child, or
unmarried son or daughter, the
parents are entitled to be awarded loss of
consortium under the
head of Filial
Consortium. Parental Consortium is awarded
to children who lose their parents in
motor vehicle accidents under the Act. A
few High Courts have awarded compensation
on this
count. However, there was no
clarity with respect to the principles on
which compensation could
be awarded on
loss of Filial Consortium.

32 A two-Judge Bench in Magma General Insurance

Company Limited awarded the amount of
Rs.40,000/-
to father and sister of the deceased. Paragraph 24
is as follows: -

24. The amount of compensation to be

awarded as consortium will be
governed by the
principles of
awarding compensation under Loss of
Consortium as laid down in Pranay Sethi
(supra). In the present case, we deem it
appropriate to award the father and the
sister of the
deceased, an amount of
Rs. 40,000 each for loss of
Filial Consortium.

33 A three-Judge Bench in United India Insurance

Company Ltd. versus Satinder Kaur alias Satvinder
Kaur and others, (2020) SCC Online 410, had
reaffirmed the view of two-Judge Bench in Magma
General insurance Company Ltd. Three-Judge Bench
from paragraph 53 to 65, dealt with three
conventional heads. The entire discussion on three
conventional heads of three-Judge Bench is as
follows: -

"53. In Pranay Sethi (supra), the

Constitution Bench held that in death
cases, compensation
would be awarded only
under three conventional heads viz. loss
of estate, loss of consortium
and funeral
expenses.

54. The Court held that the conventional

and traditional heads, cannot be
determined on
percentage basis, because
that would not be an acceptable criterion.
Unlike determination of
income, the said
heads have to be quantified, which has to
be based on a reasonable foundation.
It
was observed that factors such as price
index, fall in bank interest, escalation
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 be
Rs. 15,000/-, Rs.
40,000/- and Rs. 15,000/- respectively.
The Court was of the view that the
amounts
to be awarded under these conventional
heads should be enhanced by 10% every
three
years, which will bring consistency
in respect of these heads.

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

awarded

b) Loss of Consortium

55. Loss of Consortium, in legal parlance,

was historically given a narrow meaning to
be
awarded only to the spouse i.e. the
right of the spouse to the company, care,
help, comfort,
guidance, society, solace,
affection and sexual relations with his or
her mate. The loss of
companionship, love,
care and protection, etc., the spouse is
entitled to get, has to be
compensated
appropriately. The concept of nonpecuniary
damage for loss of consortium is one
of
the major heads for awarding compensation
in various jurisdictions such as the
United States
of America, Australia, etc.
English courts have recognised the right
of a spouse to get
compensation even
during the period of temporary
disablement.
 56. In Magma General Insurance Co. Ltd. v.
Nanu Ram & Ors., this Court interpreted
consortium
to be a compendious term,
which encompasses spousal consortium,
parental consortium, as
well as filial
consortium. The right to consortium would
include the company, care, help, comfort,
guidance, solace and affection of the
deceased, which is a loss to his family.
With respect to a
spouse, it would include
sexual relations with the deceased spouse.

57. Parental consortium is granted to the

child upon the premature death of a
parent, for loss of
parental aid,
protection, affection, society,
discipline, guidance and training.

58. Filial consortium is the right of the

parents to compensation in the case of an
accidental
death of a child. An accident
leading to the death of a child causes
great shock and agony to the
parents and
family of the deceased. The greatest agony
for a parent is to lose their child during
their lifetime. Children are valued for
their love and affection, and their role
in the family unit.

59. Modern jurisdictions world-over have

recognized that the value of a child s
consortium far
exceeds the economic value
of the compensation awarded in the case of
the death of a child.
Most jurisdictions
permit parents to be awarded compensation
under loss of consortium on the
death of a
child. The amount awarded to the parents
is the compensation for loss of love and
affection, care and companionship of the
deceased child.

60. The Motor Vehicles Act, 1988 is a

beneficial legislation which has been
framed with the
object of providing relief
to the victims, or their families, in
cases of genuine claims. In case
where a
parent has lost their minor child, or
unmarried son or daughter, the parents are
entitled
to be awarded loss of consortium
under the head of Filial Consortium.

61. Parental Consortium is awarded to the

children who lose the care and protection
of their
parents in motor vehicle
accidents.

62. The amount to be awarded for loss

consortium will be as per the amount fixed
in Pranay
Sethi (supra).

63. At this stage, we consider it

necessary to provide uniformity with
respect to the grant of
consortium, and
loss of love and affection. Several
Tribunals and High Courts have been
awarding compensation for both loss of
consortium and loss of love and affection.
The
Constitution Bench in Pranay Sethi
(supra), has recognized only three
conventional heads under
which
compensation can be awarded viz. loss of
estate, loss of consortium and funeral
expenses.

64. In Magma General (supra), this Court

gave a comprehensive interpretation to
consortium to
include spousal consortium,
parental consortium, as well as filial
consortium. Loss of love and
affection is
comprehended in loss of consortium.

65. The Tribunals and High Courts are

directed to award compensation for loss of
consortium,
which is a legitimate
conventional head. There is no
justification to award compensation
towards loss of love and affection as a
separate head.

c) Funeral Expenses Rs. 15,000 to be

awarded

34 The Three-Judge Bench in the above case

approved the comprehensive interpretation given to
the
expression consortium to include spousal
consortium, parental consortium as well as filial
consortium. Three-Judge Bench however further laid
down that loss of love and affection is
comprehended in loss of consortium , hence, there
is no justification to award compensation towards
loss of love and affection as a separate head.
35 The Constitution Bench in Pranay Sethi has
also not under conventional head included any
compensation towards loss of love and affection which have been now further reiterated by three-
Judge Bench in United India Insurance Company Ltd.
(supra). It is thus now authoritatively well
settled
that no compensation can be awarded under
the head loss of love and affection .

36 The word consortium has been defined in

Black s law Dictionary, 10th edition. The Black s
law
dictionary also simultaneously notices the
filial consortium, parental consortium and spousal
consortium in following manner:-

"Consortium 1. The benefits that one

person, esp. A spouse, is entitled to
receive from another,
including
companionship, cooperation, affection,
aid, financial support, and (between
spouses)
sexual relations a claim for loss
of consortium.

Filial consortium A child's society,

affection, and companionship given
to a parent.

Parental consortium A parent's

society, affection and companionship
given to a child.

Spousal consortium A spouse's

society, affection and companionship
given to the other spouse.

37 The Magma General Insurance Company Ltd.

(Supra) as well as United India Insurance Company
ltd.(Supra), Three-Judge Bench laid down that the
consortium is not limited to spousal consortium
and
it also includes parental consortium as well as
filial consortium. In paragraph 87 of United India
Insurance Company Ltd. (supra), consortium to all
the three claimants was thus awarded. Paragraph
87
is quoted below:-

"87. Insofar as the conventional heads are

concerned, the deceased Satpal Singh left
behind a
widow and three children as his
dependants. On the basis of the judgments
in Pranay Sethi
(supra) and Magma General
(supra), the following amounts 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

38 Learned counsel for the appellant has

submitted that Pranay Sethi has only referred to
spousal
consortium and no other consortium was
referred to in the judgment of Pranay Sethi, hence,
there is
no justification for allowing the parental
consortium and filial consortium. The Constitution
Bench in
Pranay Sethi has referred to amount of
Rs.40,000/- to the loss of consortium but the
Constitution
Bench had not addressed the issue as
to whether consortium of Rs.40,000/- is only
payable as
spousal consortium. The judgment of
Pranay Sethi cannot be read to mean that it lays
down the
proposition that the consortium is payable
only to the wife.

39 The Three-Judge Bench in United India

Insurance Company Ltd. (Supra) has categorically
laid
down that apart from spousal consortium,
parental and filial consortium is payable. We feel
ourselves
bound by the above judgment of Three
Judge Bench. We, thus, cannot accept the submission
of the
learned counsel for the appellant that the
amount of consortium awarded to each of the
claimants is
not sustainable.
40 We, thus, found the impugned judgments of the
High Court awarding consortium to each of the
claimants in accordance with law which does not
warrant any interference in this appeal. We,
however,
accept the submissions of learned counsel
for the appellant that there is no justification
for award of
compensation under separate head loss
of love and affection . The appeal filed by the
appellant
deserves to be allowed insofar as the
award of compensation under the head loss of love
and
affection .

41 We may also notice Three-Judge Bench judgment

of this Court relied by learned counsel for the
appellant i.e. Sangita Arya and others versus
Oriental Insurance Company ltd. and others, (2020)
SCC
Online 513. Counsel for the appellant submits
that this Court has granted only Rs.40,000/-
towards
loss of consortium which is an indication
that consortium cannot be granted to children. In
the above
case, Motor Accident Claims Tribunal has
awarded Rs.20,000/- to the widow towards loss of
consortium and Rs.10,000/- to the minor daughter
towards loss of love and affection . The High
Court
has reduced the amount of consortium from
Rs.20,000/- to Rs.10,000/-. Paragraph 16 of the
judgment
is to the following effect: -

"16. The consortium payable to the widow

was reduced by the High Court from Rs.
20,000 (as
awarded by the MACT) to
Rs.10,000; the amount awarded
towards loss of love and affection
to
the minor daughters was
reduced from Rs.10,000 to Rs.
5,000. However, the amount of
Rs. 5,000
awarded by the MACT
towards funeral expenses was
maintained.

42 This Court in the above case confined its

consideration towards the income of the deceased
and
there was neither any claim nor any
consideration that the consortium should have been
paid to other
legal heirs also. There being no
claim for payment of consortium to other legal
heirs, this Court
awarded Rs.40,000/- towards
consortium. No such ratio can be deciphered from
the above judgment
that this Court held that
consortium is only payable as a spousal consortium
and consortium is not
payable to children and
parents.

43 It is relevant to notice the judgment of this

Court in United India Insurance Ltd. which was
delivered
shortly after the above Three-Judge Bench
judgment of Sangeeta Arya specifically laid down
that both
spousal and parental consortium are
payable which judgment we have already noticed
above.

44 We may also notice one more Three-Judge Bench

judgment of this Court in Civil Appeal No.2885
of
2020, M.H.Uma Maheshwari and others versus United
India Insurance Company Ltd. decided on
12.06.2020.
In the above case, the Tribunal had granted the
amount of Rs.One Lakh towards loss of
consortium to
the wife and Rs.Three Lakhs for all the appellants
towards loss of love and affection.
The High Court
in the above case had reduced the amount of
compensation in the appeal filed by the
Insurance
Company. The High Court held that by awarding the
amount of Rs.One Lakh towards loss of
consortium to
the wife, Tribunal had committed error while
awarding Rs.One Lakh to the first appellant
towards
the head of loss of love and affection . Allowing
the appeal filed by the claimant, this Court
maintained the order of MACT.

45 In the above judgment although rendered by

Three-Judge Bench, there was no challenge to award
of compensation of Rs.One Lakh towards the
consortium and Rs.Three Lakhs towards the loss of
love
and affection. The appeal was filed only by
the claimants and not by the Insurance Company. The
Court did not pronounce on the correctness of the
amount awarded under the head loss of love and
affection .

46 We may also notice the additional submission

advanced in Civil Appeal No .../2020 (arising out
of
SLP(C)No.8250 of 2020), Oriental Insurance
Company Ltd. versus Smt.Rinku Devi & Ors. As noted
above, we have taken the view that the order of the
High Court awarding compensation towards loss
of
love and affection at the rate of Rs.50,000/- to
each of the claimants is unjustified which is
being
set aside in this appeal. We, further, in the
above appeal also set aside the directions of the
High Court
in paragraph 9 by which statutory amount
along with interest accrued thereon was directed to
be
deposited in AASRA fund.

47 In result, all the appeals are partly allowed.

The award of compensation under the conventional
head loss of love and affection is set aside. The
Motor Accident Claims Tribunals shall recompute the
amount payable and take further steps in accordance
with law.

48 All the appeals are partly allowed

accordingly. No costs.
 6

2020 (0) AIJEL-SC 66528

SUPREME COURT OF INDIA

(KERALA HIGH COURT)

Hon'ble Judges:Sanjay Kishan Kaul, Ajay Rastogi and Aniruddha Bose JJ.

Lalan D.@ Lal Versus Oriental Insurance Company Ltd.

CIVIL APPEAL No. 2855 of 2020 ; *J.Date :- SEPTEMBER 17, 2020

MOTOR VEHICLES ACT, 1988 Section - 166 , 173

(a) Motor Vehicles Act, 1988 - S. 166 - motor accident - permanent disablement - compensation -
argument raised that victim was a construction worker, he must have had received compensation
under Building and other Construction Workers Welfare Cess Act and that personal expenses of
victim ought to have been taken to be one-fourth of loss of income assessed - further, plea for
attendant charges has been resisted on ground that no service by any bystander had been proved
and no bill for expenses for surgery or hospitalisation during last 17 years had been produced - held,
insurance company, however, has not come up in appeal questioning High Court's finding on heads
of compensation and quantum of compensation awarded under these heads - therefore,
submissions of insurance company cannot be entertained at this stage while dealing with victim's
appeal for enhancement of compensation - otherwise also these submissions do not have any legal
basis. (Para 6)

(b) Motor Vehicles Act, 1988 - S. 166 - motor accident - injury case - appeal for enhancement of
compensation - no compensation awarded towards expenses for a caregiver barring a paltry sum of
Rs. 6,000/- as bystander expenses - defence of insurance company that no evidence led as regards
expenses incurred towards any medical attendant - held, but going by work victim was doing and his
physical state of being resulting from his injuries, conclusion has to be inevitable that he required
and still requires caregiver round the clock and round year to remain barely functional - judging by
stratum of society he comes from, it would be irrational to expect that he would have been in a
position to directly engage a caregiver after his accident - it would not be an unreasonable
assumption that his family members must have had to fit into that role - they could perform role of
caregiver only by diverting their own time from any form of gainful employment which could have
generated some income - proceeding on same assumption on his requirement of continued medical
treatment post-discharge from hospital - Rs. 7,00,000 ought to be awarded as lum psum, composite
amount for medical attendant charges and future medical treatment - in facts of given case, award
of lump sum would be proper course considering fact that first appellant was a daily labourer - in
traumatic times after his accident, his family was unlikely to maintain detailed records of expenses
incurred. (Para 8)

(c) Motor Vehicles Act, 1988 - S. 166, 173 - motor accident - permanent disablement -
compensation - appellant is a victim of a road accident along with his wife - filed claim application
along with his wife - accident occurred while he was riding his bicycle along side of highway - victim
had permanent locomotor disability of right hemiplegia sequelae of head injury which was not likely
to improve - he virtually lying as vegetable - High Court attributed percentage of his disability to be
100% - High Court enhanced his notional monthly income to Rs. 3500/ per month - held, the same
need not be disturbed - 40% added as future prospect as there is no material to prove that victim had
a permanent job - annual income of victim assessed at Rs. 58,800 - applying multiplier 16 future
earning come to Rs. 9,40,800 - considering degree of disability is 100% and victim has survived
though at present in almost "coma stage" no deduction made towards personal living expenses - for
medical expenses and future treatment Rs. 7,00000 awarded - but this very fact cannot altogether
deprive the victim from compensation under the head pain and suffering - High Court had awarded
Rs. 10,000 only under same is assessed to Rs. 3,00,000 - further, adding sums toward Medicines
and Treatment charges Rs. 68,000, transportation charges Rs. 6,000, Extra Nourishment Rs. 1500,
Damage to Clothing Rs. 500 and loss of Amenities Rs.10,000 - total compensation awarded is Rs.
20,26,800 - impugned award modified accordingly. (Para 9,10)

Imp.Para: [ 6 ] [ 8 ] [ 9 ] [ 10 ]

Cases Referred To :

1. Arvind Kumar Mishra Vs. New India Assurance Co. Ltd. & Anr., 2010 10 SCC 254 : 2010 (10)
Scale 298 : JT 2010 (10) 254 : 2010 (11) SCR 857 : 2010 AIR SCW 6085
2. Kajal Vs. Jagdish Chand & Ors., 2020 4 SCC 413 : 2020 AIR SC 776 : 2020 (3) Scale 154 : JT
2020 (2) 126 : 2020 (2) Supreme 210
3. Mallikaarjun Vs. Divisional Manager, National Insurance Company Ltd. & Anr., 2014 14 SCC 396 :
2014 AIR SC 736 : 2013 (10) Scale 668 : JT 2013 (13) 465 : 2013 (8) SCR 268
4. Mohan Soni Vs. Ram Avatar Tomar & Ors., 2012 2 SCC 267 : 2012 AIR SC 782 : 2012 (1) Scale
135 : 2012 (2) SCR 921 : 2012 AIR SCW 555
5. National Insurance Company Ltd. Vs. Kusuma And Anr., 2011 13 SCC 306 : 2011 (9) Scale 305 :
JT 2011 (9) 356 : 2011 (10) SCR 546 : 2012 AIR SCW 266
6. Priya Vasant Kalgutkar Vs. Murad Shaikh & Ors., 2009 15 SCC 54 : 2010 AIR SC 40 : 2009 (10)
Scale 345 : JT 2009 (14) 41 : 2009 (11) SCR 591
7. Sri Ramachandrappa Vs. The Manager, Royal Sundaram Alliance Insurance Company Ltd., 2011
13 SCC 236 : 2011 AIR SC 2951 : 2011 (8) Scale 399 : JT 2011 (8) 628 : 2011 (9) SCR 922

Cases Relied on :

1. National Insurance Company Ltd. Vs. Pranay Sethi & Ors., 2017 16 SCC 680 : 2017 AIR SC 5157 :
2017 (13) Scale 12 : JT 2017 (10) 450 : 2017 (8) Supreme 107
2. Parminder Singh Vs. New India Assurance Co. Ltd. & Ors., 2019 7 SCC 217 : 2019 AIR SC 3128 :
2019 (9) Scale 200 : 2019 (8) SCR 986 : 2019 (6) Supreme 286
3. Raj Kumar Vs. Ajay Kumar & Anr., 2011 1 SCC 343 : 2010 (12) Scale 265 : 2010 (13) SCR 179 :
2011 (1) SCC(Cri) 1161 : 2011 (98) AIC 251
4. Sanjay Verma Vs. Haryana Roadways, 2014 3 SCC 210 : 2014 AIR SC 995 : 2014 (1) Scale 682 :
JT 2014 (2) 384 : 2014 (1) SCR 924
5. Sarla Verma & Ors. Vs. Delhi Transport Corporation & Anr., 2009 6 SCC 121 : 2009 AIR SC 3104 :
2009 (6) Scale 129 : JT 2009 (6) 495 : 2009 (5) SCR 1098

Equivalent Citation(s):
2020 (9) SCC 805 : AIR 2020 SC 4508
JUDGMENT :-

ANIRUDDHA BOSE, J.

1 The appellants before us are a victim of a road accident and

his wife. The first appellant is the
victim. The accident occurred
on 31st December 2003 while the victim was riding his bicycle
along
the side of Alappuzha-Kolam highway. At the time of
institution of the claim petition before the Motor
Accidents
Claims Tribunal, Alappuzha under Section 166 of the Motor
Vehicles Act, 1988 (the Act), out
of which this appeal arises, the
first appellant was unconscious and was represented by his wife
as
the legal guardian and next friend. She was also a co
applicant before the Tribunal. It was claimed
before the forum of
first instance that the victim was skilled labourer in a building
construction
project. His date of birth is 20th May 1969. Before
the Tribunal, his age at the time of accident was
found to be
above 34 years. He suffered, interalia, head injury causing brain
concussion, brain stems
injury, diffuse axonial injury on left side.
He had to undergo extensive treatment in two hospitals, being
Medical College Hospital, Vandanam, Alappuzha and thereafter
at Medical Trust Hospital, Ernakulam.
He had to spend about six
weeks in these two hospitals. Thereafter also his treatment
continued. The
claim was not contested by the first respondent the owner of the vehicle and was decided exparte
against him.
Before us also, it was only the insurance company who contested
the appeal. The first
respondent was deleted from the array of the
parties by an order of this Court passed on 9th April,
2019. The
Tribunal found involvement of the vehicle registered as KL2/- No.9779. Rash and negligent
driving by the driver of that
vehicle was also proved. As regards condition of the first
appellant, the
Tribunal, in its award, found that the victim had
right aided Hemiparalesis and there is weakness on
the other
side also. He is completely bed ridden and he could not speak
properly and he has some
mental problem also. Tube was fitted
for the passage of urine . The Tribunal in its award made on
20th January, 2009 assessed permanent disability of the
appellant to be 50%.

2 Compensation was awarded by the Tribunal under following

heads, applying the multiplier of 17:

Compensation for loss of earning Rs.20,000/-

Cost of medicine and treatment charges Rs.68,000/-
Transportation charges Rs. 6,000/-
Bystander expenses Rs. 6,000/-
Extra nourishment Rs. 1,500/-
Damage to clothing Rs. 500/-
Compensation for pain and suffering Rs.30,000/-
Compensation for permanent disability And loss of Rs.2,55,500/-
earning power
Compensation for loss of amenities Rs.10,000/-

Compensation for future treatment Rs. 2,500/-

Total Rs.4,00,000/-

3 The victim and his wife appealed to the High Court of Kerala
at Ernakulam seeking enhancement of
compensation. The High
Court considered certain additional documents. The appellant
established
before the High Court the need to continue his
treatment subsequent to the award of the Tribunal. It
was opined
in the judgment of the High Court delivered on 16th March, 2017,
that the condition of the
appellant was such that it was more
than sufficient to arrive at a finding that he was virtually lying as
vegetable. The victim had permanent locomotor disability of right
hemiplegia sequelae of head injury
which was not likely to
improve. The High Court found that the victim needed a fulltime
caregiver as
he was not in a position to move around on free will.
The High Court assessed the degree of disability
to be reckoned
as 100% for working out proper compensation and applied the
multiplier of 16
considering his age. We shall reproduce the High
Court s decision on quantum of compensation in the
next
paragraph of this judgment.

4 The Medical Board at the Medical College Hospital,

Alappuzha had certified the victim s permanent
disability to be
50%, which was the basis for assessment of degree of his
disability by the Tribunal.
The Tribunal s award was made, as we
have already indicated, in the year 2009. But considering the
position of the victim, while hearing the appeal in the year 2017,
the High Court attributed the
percentage of his disability to be
100%. The High Court enhanced his notional monthly income to
Rs.3500/per
month. In the judgment under appeal, it was
observed and held:

It is true that the accident was in the

year 2003, but it was on the last day of the
year and by the
dawn of the next day, it was to
begin with the year 2004. Evidently, the
injured was maintaining a
family of his own,
consisting of his wife, who is the second
appellant/second claimant. By virtue
of the
present state of affairs, it can be reasonably
presumed that the wife will not be in a
position
to move about for getting some job and she has
to be near her husband throughout, to
give
constant care and attention, even for meeting
the calls of nature, for administration of
medicines and for food intake. In the said
circumstance, we find that the notional
monthly
income fixed by the Tribunal requires
some modification. We enhance the same to
Rs.3500/per
month. The proper multiplier, as
rightly pointed out by the learned Sr. counsel
appearing for the
Insurer is 16 ; in view of the
date of birth of the injured being 25.9.1969.
On reworking
the
compensation towards
disability, it comes to Rs.6,72,000/(
3500 x 12
x 16 x 100/100). After
giving credit to the sum
of Rs.2,55,000/awarded
by the Tribunal, the
balance comes to
Rs.4,17,000/.
Since we have
awarded compensation for disability, reckoning
it as 100%, the
compensation of loss of earning
awarded by the Tribunal becomes irrelevant
and insignificant
and hence the said amount of
Rs.20000/is
deleted. Hence the balance
payable comes to
Rs.3,97,000/.
The compensation under the heads pain and
suffering and towards loss of
amenities and
Page 5 of 16
enjoyment in life also require some
modification. Taking into the
totality of the
facts and circumstances, we award a further
sum of Rs.10,000/under
the head
pain and
suffering and a sum of Rs.40,000/towards
loss of amenities and enjoyment in life.
Thus,
the total balance compensation comes to
Rs.4,47,000/(
Rupees four lakhs forty seven
thousand only), which shall be satisfied with
interest at the rate of 9% from the date of
petition
till realisation, within one month from
the date of receipt of a copy of the judgment.

5 The appellants have asked for further enhancement of

compensation before us. Grievance of the
appellants is that the
victim has been undercompensated,
having regard to the degree
of injury
suffered by him. He has specifically raised the plea for
award of compensation under the head of loss
of future
prospects. It is also his case that the High Court erred in law in
applying the multiplier of 16.
It has been urged on behalf of the
appellants that the multiplier 17 as per the award of the
Tribunal,
should have been retained.

6 On behalf of the insurance company, prayer of the

appellants for enhancement of compensation has
been opposed.
It has been argued that there was contributory negligence on the
part of the first
appellant in that he was under the influence of
liquor at the time of accident. On that count, they want
reduction
of 50% of the compensation from the judgment and order under
appeal. Quantification of
his monthly income as Rs.3,500/has
also been questioned by the insurance company in their
counteraffidavit.
The case of Sri Ramachandrappa vs. The Manager,
Royal Sundaram Alliance
Insurance Company Ltd. [(2011) 13
SCC 236] has been referred to in this regard. On the question as
to
what would constitute just compensation, the cases of Arvind
Kumar Mishra vs. New India Assurance
Co. Ltd. & Anr. [(2010)
10 SCC 254] and National Insurance Company Ltd. vs.
Kusuma and Anr. [(2011)
13 SCC 306] have been cited on their
behalf. It has also been argued that as he was a construction
worker, he must have had received compensation under the
Building and other Construction Workers
Welfare Cess Act, 1966
as also Workmen Compensation Act, 1923. The insurance
company s case is
that personal expenses of the victim ought to
have been taken to be onefourth
of the loss of income
assessed.
The plea for attendant charges has been resisted on the ground
that no service by any
bystander had been proved and no bill for
expenses for surgery or hospitalisation during the last 17
years
had been produced. The insurance company, however, has not
come up in appeal questioning
the High Court s finding on the
heads of compensation and quantum of compensation awarded
under
these heads. These submissions of the insurance
company we cannot entertain at this stage while
dealing with the
victim s appeal for enhancement of compensation. Otherwise
also, we do not think
these submissions have any legal basis in
the context of the present appeal. The forum of first
instance or
the High Court did not return any finding on the first appellant
being under influence of
alcohol. In the victim s appeal, we
cannot permit the insurance company to raise this plea at this
stage. Moreover, submission that the appellant must have drawn
compensation under different
welfare statutes is inferential. The
insurance company has not disclosed any evidence to sustain
their
stand on this count.

7 The High Court has assessed monthly income of the victim

to be Rs.3500/.
This was enhanced from
the Tribunal s
quantification of Rs.2,500/per
month. We do not want to
disturb the finding of the High
Court on this point. This is
essentially a finding on question of fact. The respondent
insurance
company has cited the case of Mohan Soni vs. Ram
Avatar Tomar & Ors. [(2012) 2 SCC 267] to
contend that in the
context of loss of future earning, physical disability resulting
from an accident
ought to be judged with reference to the nature
of work being performed by the person suffering the
disability.
The approach of the Tribunal as also the High Court in the case
of the victim has been in
that line only. The respondents also
sought to rely upon the decision of this Court in the case of Priya
Vasant Kalgutkar vs. Murad Shaikh & Ors. [(2009) 15 SCC 54].
This case, however, relates to
computation of compensation for
injuries suffered by a minor. Ratio of this decision has no
application in the facts of this case. We are, however, also of the
opinion that the High Court went
wrong in not awarding any sum
under the head of loss of future prospects. In the case of
National
Insurance Company Ltd. vs. Pranay Sethi & Ors.
[(2017) 16 SCC 680], a Constitution Bench has opined
that the
standardisation of just compensation is to include addition of
future prospects to the income
of the victim at the time of
occurrence of the accident. This was a case where the victim had
succumbed to the injuries. The present appeal relates to a victim,
who has survived the accident but
his disability has been
assessed to be 100% by the High Court. We confirm this finding
of the High
Court. In the case of Parminder Singh vs. New
India Assurance Co. Ltd. & Ors. [(2019) 7 SCC 217], a
Bench
comprising of two Judges of this Court found 50% of the income
of the victim was to be
assessed as loss of future prospects.
Earlier, this Court broadly took the same view in the case of
Sanjay Verma vs. Haryana Roadways [(2014) 3 SCC 210]. The
course mandated by this Court in the
case of Parminder Singh
(supra) is addition to the monthly income of the victim, 50%
thereof as loss
of future prospects to arrive at compensation for
loss of income for the purpose of application of the
multiplier.
This method of computation is based on sound logic and we
choose to apply the same
methodology in this appeal also. The
loss of earning capacity of the first appellant is 100%. On this
basis, his loss of future earning would have to be calculated
treating income of the victim to be
Rs.3,500/per
month, to
which loss of future prospects at the rate of 40% thereof is to be
added, which
would make it Rs.4900/per
month. This is the
computation method directed by the Constitution Bench
in the
case of Pranay Sethi (supra) so far as selfemployed
persons are
concerned. We direct addition
of 40% as there is no material
before us to prove that the victim had a permanent job. Evidence
before
the Tribunal was that he was a skilled labourer in a
building construction project. There was no
evidence that he was
on their permanent roll. The multiplier to be applicable in this
case would be 16
following the specification contained in the case
of Sarla Verma & Ors. vs. Delhi Transport Corporation
& Anr.
[(2009) 6 SCC 121]. Accordingly, his loss of future earning would
have to be calculated first by
multiplying Rs.4,900/- by
12,
which would come to Rs.58,800/- This
would be his annual
income. Once
multiplier of 16 is applied, his loss of future
earning would come to Rs.9,40,800/- ,
considering that
degree of
his disability is 100%. As the appellant has survived though at
present in almost coma stage
as observed by the High Court, we
reject the insurance company s plea for making any deduction
towards personal living expenses.

8 We also find that there was no compensation awarded

towards expenses for a caregiver barring a
paltry sum of
Rs.6,000/- as
bystander expenses. The defence of the insurance
company for keeping
the said sum at that negligible level is that
no evidence had been led as regards expenses incurred
towards
any medical attendant. But going by the work the victim was
doing and his physical state of
being resulting from his injuries,
conclusion has to be inevitable that he required and still requires
caregiver roundtheclock
and round the year to remain barely
functional. Judging by the stratum of the
society he comes from,
it would be irrational to expect that he would have been in a
position to
directly engage a caregiver after his accident. It would
not be an unreasonable assumption that his
family members
must have had to fit into that role. They could perform the role of
caregiver only by
diverting their own time from any form of
gainful employment which could have generated some
income.
We proceed on the same assumption on his requirement of
continued medical treatment
postdischarge
from the hospital.
There is observation in the judgment of the High Court that he
was
undergoing treatment in Aarogya Keralam Palliative Caring
Scheme. We are of the opinion that
Rs.7,00,000/- ought
to be
awarded as lumpsum, composite amount for medical attendant
charges
and future medical treatment. In the case of Kajal vs.
Jagdish Chand & Ors. [(2020) 4 SCC 413] for
attendant charges,
a Bench of twoJudges
of this Court has held that the multiplier
methodology ought
to be applied. On the other hand, in the case
of Parminder Singh (supra) a lumpsum amount has been
awarded. In the facts of the given case, we are of the opinion that
award of lumpsum would be the
proper course considering the
fact that the first appellant was a daily labourer. In traumatic
times after
his accident, his family was unlikely to maintain
detailed records of the expenses incurred.

9 Under the head pain and suffering the High Court has
awarded a sum of Rs.40,000/- .
The appellants
want this sum to
be raised to Rs.6,00,000/- relying
on a judgment of this Court in
the case of
Mallikaarjun Vs. Divisional Manager, National
Insurance Company Ltd. & Anr. [(2014) 14 SCC 396]. In
the
case of Kajal (supra), where the victim was a young girl of 12
years having suffered 100%
disability, the amount awarded was
Rs.15,00,000/- under
the heads pain and suffering and loss of
amenities. But this judgment qualified such award with a caveat
that the sum was awarded in peculiar
facts and circumstances of
the case. In the case of Raj Kumar vs. Ajay Kumar & Anr.
[(2011) 1 SCC
343] it has been observed that when compensation
is awarded by treating loss of future earning
capacity to be 100%
or even anything more than 50% the need to award
compensation separately
under the head of loss of amenities or
loss of expectation of life may disappear. As a result, only a
token
or nominal amount may have to be awarded under those heads.
It is a fact that in the cases of
Kajal (supra) and
Mallikaarjun (supra), the victims were minor children. Their loss
of income and
permanent disability compensation were computed
treating their income to be Rs.15,000/- per
annum. So far as the
present appeal is concerned, the High Court has assessed the
annual income to
be Rs.42,000/- (
Rs.3500x12). But this very fact
cannot altogether deprive the victim from
compensation under
the head pain and suffering. The High Court had awarded
Rs.10,000/- only
under
this head. We assess the same to be
Rs.3,00,000/- .
Considering the observations made in the case of
Raj Kumar (supra), to which we have already referred, we reduce
the sum awarded by the High Court
under the head loss of
amenities from Rs.40,000/- to
Rs.10,000/- .

10 We accordingly modify the award as made by the High

Court and direct the respondentinsurance
company to make
payment as compensation under the following heads (which also
includes the
heads under which sums were awarded by the
Tribunal and the High Court) :
Compensation Heads Amount (in Rs.)
Compensation for permanent disability and loss of 9,40,800
future earning
Medical Attendant charges (Bystander charges) and 7,00,000
future Treatment cost
Pain and suffering 3,00,000
Medicines & Treatment charges 68,000
Transportation Charges 6,000
Extra Nourishment 1500
Damage to Clothing 500
Loss of Amenities 10,000
Total 20, 26,800

11 The aforesaid sum will carry interest @ 9% per annum.

Upon adjusting the sum already paid, the
amount we have
awarded shall be released to the appellants. Interest on the
differential sum shall be
computed from the date of filing of the
application under Section 166 of the Act. The said amount
shall
be invested in an interest bearing fixed deposit account of a
Nationalised Bank for a period of
one year in the name of the first
appellant within eight weeks. The appellants shall be entitled to
withdraw the interest therefrom on a regular basis during the
tenure of the fixed deposit. Thereafter,
the entire sum shall be
paid over to the appellants.

12 The appeal is disposed of in the above terms. Pending

applications, if any, shall stand disposed of.
There shall be no
order as to costs.
 7

2020 (0) AIJEL-SC 65611

SUPREME COURT OF INDIA

(PUNJAB & HARYANA HIGH COURT)

Hon'ble Judges:A.M.Khanwilkar and Dinesh Maheshwari JJ.

National Insurance Company Limited Versus Birender And Ors.

CIVIL APPEAL No. 242 of 2020 ; 243 of 2020 ;

CIVIL APPEAL No. 244 of 2020 ; *J.Date :- JANUARY 13, 2020

MOTOR VEHICLES ACT, 1988 Section - 166 , 166(1)(c)

HARYANA COMPASSIONATE ASSISTANCE TO THE DEPENDENTS OF THE DECEASED
GOVERNMENT EMPLOYEES RULES, 2006 Rule - 5(2)

(a) Motor Vehicles Act, 1988 - S. 166(1)(c) - motor accident - death - 'legal representative' - major
earning son of deceased - right to apply for compensation - whether major sons of deceased who
are married and gainfully employed or earning, can claim compensation under Act - whether such
legal representatives are entitled only for compensation under conventional heads - held, legal
representatives of deceased can move application for compensation by virtue of clause (c) of S.
166(1) - major married son who is also earning and not fully dependant on deceased, is still covered
by expression "legal representative" of deceased - hence, major married and earning sons of
deceased being legal representatives have a right to apply for compensation - it would be bounden
duty of Tribunal to consider application irrespective of the fact whether concerned legal
representative was fully dependant on deceased and not to limit claim towards conventional heads
only - in present case, evidence on record suggests that claimants were working as agricultural
labourers on contract basis and were earning meagre income - they were largely dependant on
earning of their deceased mother who met with an accident at the young age of 48 years. (Para
14,15)

(b) Motor Vehicles Act, 1988 - S. 166 - Haryana Compassionate Assistance to Dependants of
Deceased Government Employees Rules, 2006 - R. 5(2) - death claim - computation of
compensation - deduction - whether High Court was justified in deducting 50% of amount receivable
towards financial assistance under 2006 Rules from amount of compensation - held, no - no
evidence to show that claimants major sons were held to be eligible or that they were getting such
financial assistance under the 2006 Rules - deduction by High Court was not proper. (Para 18)

(c) Motor Vehicles Act, 1988 - S. 166 - compensation - loss of dependency - deduction of pension -
whether family pension received by deceased on death of her husband can be considered as income
for the purpose of computing amount of compensation - held, no - deceased was getting family
pension in her own right as widow of deceased and the same cannot be termed as her income for the
purpose of computation of compensation - appeals partly allowed. (Para 21)

Imp.Para: [ 14 ] [ 15 ] [ 17 ] [ 18 ] [ 21 ]
Cases Referred To :

1. Custodian Of Branches Of Banco National Ultramarino V. Nalini Bai Naique, 1989 Supp2 SCC 275
: 1989 AIR SC 1589 : 1989 (1) Scale 1413 : JT 1989 (Supp) 159 : 1989 (2) SCR 810
2. Gujarat Srtc V. Ramanbhai Prabhatbhai, 1987 3 SCC 234 : 1987 AIR SC 1690 : 1987 (1) Scale
1027 : JT 1987 (2) 384 : 1987 (3) SCR 404
3. Helen C. Rebello V. Maharashtra Srtc, 1999 1 SCC 90 : 1998 AIR SC 3191 : 1998 (5) Scale 339 :
JT 1998 (6) 418 : 1998 (Supp1) SCR 684
4. United India Insurance Co. Ltd. V. Patricia Jean Mahajan, 2002 6 SCC 281 : 2002 AIR SC 2607 :
2002 (5) Scale 56 : JT 2002 (5) 74 : 2002 (3) SCR 1176

Cases Relied on :

1. Manjuri Bera (Smt) V. Oriental Insurance Co. Ltd. & Anr., 2007 10 SCC 643 : 2007 AIR SC 1474 :
2007 (5) Scale 193 : JT 2007 (5) 78 : 2007 (4) SCR 590
2. National Insurance Company Limited V. Pranay Sethi & Ors., 2017 16 SCC 680 : 2017 AIR SC
5157 : 2017 (13) Scale 12 : JT 2017 (10) 450 : 2017 (8) Supreme 107
3. Reliance General Insurance Co. Ltd. V. Shashi Sharma And Ors., 2016 9 SCC 627 : 2016 AIR SC
4465 : 2016 (9) Scale 317 : JT 2016 (12) 409 : 2016 (7) Supreme 35
4. Sarla Verma (Smt.) & Ors. Vs. Delhi Transport Corporation & Anr., 2009 6 SCC 121 : 2009 AIR SC
3104 : 2009 (6) Scale 129 : JT 2009 (6) 495 : 2009 (5) SCR 1098

Equivalent Citation(s):
2020 (11) SCC 356 : AIR 2020 SC 434

JUDGMENT :-

A.M.Khanwilkar, J.

1 Delay condoned.

2 Leave granted.

3 These civil appeals emanate from the common judgment and

order dated 8.8.2018 passed by the
High Court of Punjab and
Haryana at Chandigarh (for short, the High Court ) in cross appeals
being
F.A.O. Nos. 1341 of 2016 (O&M) and 4023 of 2016 (O&M),
questioning the correctness of the award
dated 4.12.2015 passed by
the Motor Accidents Claims Tribunal, Jind (for short, the Tribunal ) in
M.A.C.T. Case No. 205 of 2014. The former appeal (arising out of
S.L.P.(C) No /2020 @ Diary No.
47693/2018) has been preferred
by the insurance company and the latter appeal (arising out of S.L.P.
(C) No ./2020 @ Diary No. 17683/2019) by the claimants-respondent Nos. 1 and 2. The parties are
referred to as per their status in the former appeal for the sake of convenience.

4 The claim petition was filed by the respondent Nos. 1 and 2

herein, who are the major sons of Smt.
Sunheri Devi (deceased). The
deceased was on her way to attend the office of Tehsildar, Uchana
(where she was working as a Peon) from Dharoli Khera village on
20.10.2014 at about 9.00 a.m.,
travelling as a pillion rider on a
motorcycle bearing No. HR-32-G-8749. At that time, a dumper/tipper
bearing registration No. HR-56-A-3260 coming from the opposite
direction, being driven in a rash and
negligent manner, collided with
the motorcycle, resulting in fatal injuries sustained to the deceased to
which she succumbed.
5 The respondent Nos. 1 and 2 claimed an amount of
Rs.50,00,000/- (Rupees fifty lakhs only) along
with interest at the rate
of 12% per annum on the assertion that the deceased was earning
Rs.28000/-
per month (Rs.21000/- as salary and Rs.7000/- as family
pension of her husband), she was hale and
healthy and was the only
bread earner of her entire family and that they were largely dependant
upon
her income and have also been deprived of her love and
affection. The appellant disputed the claim
and pleaded that the
accident did not occur with the offending vehicle (the dumper/tipper)
or due to
fault of its driver, and that the respondent Nos. 1 and 2
were majors and not dependant upon the
deceased and as such not
entitled for any compensation. Further, the vehicle in question was
being
plied in contravention of terms and conditions of the insurance
policy and the driver was not holding a
valid and effective driving
licence. Resultantly, the insurance company-appellant was not liable
to pay
compensation.

6 After analysing the evidence on record, the Tribunal held that

the accident of the deceased occurred
due to rash and negligent
driving of the offending vehicle. The Tribunal further noted that the
driver
and the owner of offending vehicle have placed on record the
driving licence of the driver, valid
insurance policy, public carrier
permit and the registration certificate of the offending vehicle and the
appellant having failed to lead any evidence to prove that the terms
and conditions of the insurance
policy were violated, cannot be
absolved of its liability. The Tribunal also noted that though the
respondent Nos. 1 and 2 were major and earning hands, the fact that
they were legal heirs of the
deceased and have been deprived of the
pecuniary benefits through the deceased cannot be denied.

7 Having decided the above issues in favour of the respondent

Nos. 1 and 2, the Tribunal while
determining the quantum of
compensation took note of the gross monthly salary of the deceased
as
on September, 2014, which according to her service record was
Rs.23,123/- and the net take home
salary was Rs.16,918/-. The
Tribunal did not consider the family pension for computation, as the
deceased was getting it in her own right as widow and the same could
not be reckoned. Her date of
birth was 1.4.1967 and date due for
retirement was 31.3.2027, for which multiplier of 13 was applied.
The deduction towards personal expenses was kept at 50% as the
respondent Nos. 1 and 2 were
major and earning hands. Thus, the
loss of dependency was determined at Rs. 17,15,532/-. In
addition,
an amount of Rs.25,000/- was awarded on account of funeral
expenses, etc. and the total
compensation was computed at
Rs.17,40,532/- along with interest at the rate of 9% per annum from
the date of institution of petition. The driver, owner and insurer of
the offending vehicle were held
jointly and severally liable.

8 Against the award passed by the Tribunal, cross appeals were

preferred being F.A.O. No. 1341 of
2016 (O&M) filed by the appellant
and F.A.O. No. 4023 of 2016 (O&M) filed by the respondent Nos. 1
and 2. The appellant (insurance company) primarily contended that
the respondent Nos. 1 and 2 are
not entitled to compensation for loss
of dependency as they are major and earning and also because
the
family of the deceased was entitled to receive financial assistance
under the Haryana
Compassionate Assistance to the Dependants of
Deceased Government Employees Rules, 2006 (in
short, the 2006
Rules ). The respondent Nos. 1 and 2 contended that being major and
also earning by
itself cannot be regarded as ineligibility to claim
compensation. Further, the Tribunal has wrongly
assessed loss of
dependency on take-home salary instead of the drawing salary and
without
considering the family pension received by the deceased had
she been alive. They further claimed that
the deduction of personal
expenses should be one-third (1/3rd) instead of 50%.

9 The High Court by considering the monthly salary for computing

compensation as Rs.23,123/-,
benefits of future prospects at 30%,
applying a multiplier of 13 and deduction for personal expenses at
50% held that the respondent Nos. 1 and 2 were entitled to loss of
dependency qua loss of income at
Rs.23,44,672/-. The High Court,
in addition, while considering the loss of dependency qua loss of
pension by taking monthly pension at Rs.7,000/-, applying a
multiplier of 13 and deduction for
personal expenses at 50%, held
that Rs.5,46,000/- would be payable towards this head. The
compensation under conventional heads was also increased from
Rs.25,000/- to Rs.30,000/-.
Therefore, the total compensation
payable was determined as Rs.29,20,672/-. The High Court further
noted that financial assistance available to the family of the deceased,
under the 2006 Rules would be
Rs.33,29,712/- and deducted 50% of
the said amount from compensation whilst relying upon a
judgment
of the same High Court in New India Assurance Co. Ltd. v. Ajmero
and others. The High
Court then deducted that amount of
Rs.16,64,856/- from the compensation amount of Rs.29,20,672/-
determined by it. Resultantly, the High Court reduced the
compensation awarded by the Tribunal to the
extent of Rs.4,84,716/-
and gave liberty to the appellant to recover the excess amount, if
already paid.

10 The former appeal is preferred by the appellant on the ground

that the High Court ought to have
deducted the entire amount of
financial assistance under the 2006 Rules, instead of deducting only
50% thereof. Reliance was placed on the judgment of this Court in
Reliance General Insurance Co. Ltd.
v. Shashi Sharma and Ors., (2016) 9 SCC 627.
It is urged that claim for loss of dependency is
unavailable to the
respondent Nos. 1 and 2 in the facts of the present case, they being
major sons of
the deceased who were married and also gainfully
employed. Reliance is placed on Manjuri Bera (Smt)
v. Oriental
Insurance Co. Ltd. & Anr., (2007) 10 SCC 643. It is urged that the respondent Nos. 1
& 2 may
be entitled only to compensation under conventional heads
as held in National Insurance Company
Limited v. Pranay Sethi
& Ors., (2017) 16 SCC 680.

11 The latter appeal has been preferred by the respondent Nos. 1

and 2, primarily on the ground that
the High Court erred in deducting
50% of the amount from compensation instead of one-third (1/3rd).
Further, deduction of 50% amount of the financial assistance
receivable under the 2006 Rules on the
assumption that the
respondent Nos. 1 and 2 are eligible therefor is a manifest error.
Reliance is also
placed on the decision of the High Court in Ajmero
(supra). It is urged that the High Court ought to
have considered that
the respondent Nos. 1 and 2 were dependant on the deceased and
that they
have been deprived of her love and affection and income and
thus entitled to compensation as
claimed in the original application in
that regard.

12 We have heard Mr. Amit Kumar Singh, learned counsel for the
insurance company (appellant) and
Ms. Abha R. Sharma, learned
counsel for the respondent Nos. 1 and 2. The principal issues which
arise for our consideration are as follows: -

(i) Whether the major sons of the deceased who are married and
gainfully employed or earning,
can claim compensation under
the Motor Vehicles Act, 1988 (for short, the Act )?

(ii) Whether such legal representatives are entitled only for

compensation under the
conventional heads?

(iii) Whether the amount receivable by the legal representatives of

the deceased under the 2006
Rules is required to be deducted as
a whole or only portion thereof?

13 Reverting to the first issue - that needs to be answered on the

basis of the scheme of the Act.
Section 166 of the Act provides for
filing of application for compensation by persons mentioned in
clauses (a) to (d) of sub-Section (1) thereof. Section 166 of the Act, as
applicable at the relevant time,
reads thus: -

Section 166. Application for compensation.-

(1) An
application for compensation arising out of an accident of
the nature specified in sub-
section (1) of section 165 may be made-

(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 of the legal representatives of the
deceased; or

(d) by any agent duly authorised by the person

injured or all or any of the legal representatives
of
the deceased, as the case may be:

Provided that where all the legal representatives of the

deceased have not joined in any such
application for
compensation, the application shall be made on behalf of or
for the benefit of all
the legal representatives of the deceased
and the legal representatives who have not so joined,
shall
be impleaded as respondents to the application.

(2) Every application under sub-section (1) shall be made,

at the option of the claimant, either to
the Claims Tribunal
having jurisdiction over the area in which the accident
occurred or to the
Claims Tribunal within the local limits of
whose jurisdiction the claimant resides or carries on
business or within the local limits of whose jurisdiction the
defendant resides, and shall be in
such form and contain
such particulars as may be prescribed:

Provided that where no claim for compensation under

Section 140 is made in such application,
the application
shall contain a separate statement to that effect immediately
before the
signature of the applicant.

(3) ***

(4) The Claims Tribunal shall treat any report of accidents

forwarded to it under sub-section (6)
of section 158 as an
application for compensation under this Act. (emphasis supplied)

14 The legal representatives of the deceased could move application

for compensation by virtue of
clause (c) of Section 166(1). The major
married son who is also earning and not fully dependant on
the
deceased, would be still covered by the expression legal
representative of the deceased. This
Court in Manjuri Bera (supra)
had expounded that liability to pay compensation under the Act does
not
cease because of absence of dependency of the concerned legal
representative. Notably, the
expression legal representative has not
been defined in the Act. In Manjuri Bera (supra), the Court
observed
thus:-

9. In terms of clause (c) of sub-section (1) of Section 166

of the Act in case of death, all or any
of the legal
representatives of the deceased become entitled to
compensation and any such
legal representative can file a
claim petition. The proviso to said sub-section makes the
position
clear that where all the legal representatives had not
joined, then application can be made on
behalf of the legal
representatives of the deceased by impleading those legal
representatives as
respondents. Therefore, the High Court
was justified in its view that the appellant could maintain
a
claim petition in terms of Section 166 of the Act.

10. ..The Tribunal has a duty to make an award,

determine the amount of compensation which is
just and
proper and specify the person or persons to whom such
compensation would be paid.
The latter part relates to the
entitlement of compensation by a person who claims for the
same.

11. According to Section 2(11) CPC, legal representative means a person who in law represents
the estate of a deceased person, and includes any person who intermeddles
with the estate of
the deceased and where a party sues or is
sued in a representative character the person on
whom the
estate devolves on the death of the party so suing or sued.
Almost in similar terms is
 the definition of legal representative under the Arbitration and Conciliation Act, 1996 i.e. under
Section 2(1)(g).

12. As observed by this Court in Custodian of Branches of

BANCO National Ultramarino v. Nalini
Bai Naique [1989 Supp
(2) SCC 275 the definition contained in Section 2(11) CPC is
inclusive in
character and 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 can
represent the estate of the deceased person. It includes heirs as well as persons who represent
the estate even without title either as executors or administrators in possession of the estate of
the deceased. All such persons would be covered by the expression legal representative . As
observed in Gujarat SRTC v. Ramanbhai Prabhatbhai [(1987) 3 SCC 234 a legal representative is
one who suffers on account of death of a person due to a motor vehicle accident and need not
necessarily be a wife, husband, parent and child.

In paragraph 15 of the said decision, while adverting to the provisions

of Section 140 of the Act, the
Court observed that even if there is no
loss of dependency, the claimant, if he was a legal
representative, will
be entitled to compensation. In the concurring judgment of Justice
S.H. Kapadia,
as His Lordship then was, it is observed that there is
distinction between right to apply for
compensation and entitlement
to compensation . The compensation constitutes part of the estate of
the deceased. As a result, the legal representative of the deceased
would inherit the estate. Indeed, in
that case, the Court was dealing
with the case of a married daughter of the deceased and the efficacy
of Section 140 of the Act. Nevertheless, the principle underlying the
exposition in this decision would
clearly come to the aid of the
respondent Nos. 1 and 2 (claimants) even though they are major sons
of
the deceased and also earning.

15 It is thus settled by now that the legal representatives of the

deceased have a right to apply for
compensation. Having said that, it
must necessarily follow that even the major married and earning
sons
of the deceased being legal representatives have a right to apply for
compensation and it would
be the bounden duty of the Tribunal to
consider the application irrespective of the fact whether the
concerned
legal representative was fully dependant on the deceased and not to
limit the claim
towards conventional heads only. The evidence on
record in the present case would suggest that the
claimants were
working as agricultural labourers on contract basis and were earning
meagre income
between Rs.1,00,000/- and Rs.1,50,000/- per annum.
In that sense, they were largely dependant on the
earning of their
mother and in fact, were staying with her, who met with an accident
at the young age
of 48 years.

16 The next issue is about the deduction of the amount receivable

by the legal representatives of the
deceased under the 2006 Rules
from the compensation amount determined by the Tribunal in terms
of the decision of three-Judge Bench of this Court in Shashi Sharma
(supra). This Court, after
analysing the relevant rules, opined as
follows: -

23. Reverting back to Rule 5, sub-rule (1) provides for the

period during which the dependants of
the deceased
employee may receive financial assistance equivalent to the
pay and other
allowances that was last drawn by the
deceased employee in the normal course without raising
a
specific claim. Sub-rule (2) provides that the family shall
be eligible to receive family pension
as per the normal
Rules only after the period during which they would
receive the financial
assistance in terms of sub-rule (1).
Sub-rule (3) guarantees the family of a deceased
government
employee of a government residence in occupation for a
period of one year from
the date of death of the employee,
upon payment of normal rent/licence fee. By virtue of subrule
(4), an ex gratia assistance of Rs 25,000 is provided to
the family of the deceased employee to
meet the immediate
needs on the loss of the bread earner. Sub-rule (5) clarifies
that house rent
allowance shall not be a part of allowance for
the purposes of calculation of assistance.
24. ..As regards the second part, it deals with income
from other source which any way is
receivable by the
dependants of the deceased government employee. That
cannot be deducted
from the claim amount for
determination of a just compensation under the 1988
Act.

25. The claimants are legitimately entitled to claim for the

loss of pay and wages of the
deceased government
employee against the tortfeasor or insurance company, as
the case may
be, covered by the first part of Rule 5 under the
1988 Act. The claimants or dependants of the
deceased
government employee (employed by the State of Haryana),
however, cannot set up a
claim for the same subject falling
under the first part of Rule 5 pay and allowances , which
are
receivable by them from employer (the State) under Rule
5(1) of the 2006 Rules. In that, if the
deceased employee was
to survive the motor accident injury, he would have
remained in
employment and earned his regular pay and
allowances. Any other interpretation of the said
Rules would
inevitably result in double payment towards the same head
of loss of pay and
wages of the deceased government
employee entailing in grant of bonanza, largesse or source
of
profit to the dependants/claimants ..

26. Indeed, similar statutory exclusion of claim receivable

under the 2006 Rules is absent. That,
however, does not
mean that the Claims Tribunal should remain oblivious to
the fact that the
claim towards loss of pay and wages of the
deceased has already been or will be compensated
by the
employer in the form of ex gratia financial assistance on
compassionate grounds under
Rule 5(1). The Claims Tribunal has to adjudicate the claim and determine the amount
of
compensation which appears to it to be just. The amount
receivable by the
dependants/claimants towards the head of
pay and allowances in the form of ex gratia financial
assistance, therefore, cannot be paid for the second time to the
claimants. True it is, that the
2006 Rules would come into
play if the government employee dies in harness even due to
natural death. At the same time, the 2006 Rules do not expressly enable the dependants of the
deceased government
employee to claim similar amount from the tortfeasor or insurance
company because of the accidental death of the deceased government employee. The
harmonious approach for
determining a just compensation payable under the 1988
Act,
therefore, is to exclude the amount received or receivable by the dependants of the deceased
government employee under the 2006 Rules towards the head financial assistance equivalent to
pay and other allowances that was
last drawn by the deceased government employee in the
normal course. This is not to say that the amount or payment
receivable by the dependants of
the deceased government
employee under Rule 5(1) of the Rules, is the total entitlement under
the head of loss of income . So far as the claim
towards loss of future escalation of income and
other benefits is concerned, if the deceased government employee had
survived the accident
can still be pursued by them in their
claim under the 1988 Act. For, it is not covered by the 2006
Rules. Similarly, other benefits extended to the dependants
of the deceased government
employee in terms of sub-rule
(2) to sub-rule (5) of Rule 5 including family pension, life
insurance, provident fund, etc., that must remain unaffected
and cannot be allowed to be
deducted, which, any way would
be paid to the dependants of the deceased government
employee, applying the principle expounded in Helen C. Rebello v. Maharashtra SRTC, (1999) 1
SCC 90 and United India Insurance Co. Ltd. v. Patricia Jean Mahajan, (2002) 6
SCC 281 cases.

27. A priori, the appellants must succeed only to the extent of amount receivable by the
dependants of the deceased
government employee in terms of Rule 5(1) of the 2006
Rules,
towards financial assistance equivalent to the loss of
pay and wages of the deceased employee
for the period specified. (emphasis supplied)
The learned Judge of the High Court has, however,
after adverting to
the decision of the same High Court in Ajmero (supra), went on to
observe that
50% of the amount receivable by the legal representatives of the deceased towards financial
assistance under
the 2006 Rules is required to be deducted from the compensation
amount. In
the relied upon decision, the same learned Judge had
occasion to observe as follows: -
 However, perusal of the judgment would reveal that
the Court has not adverted to the issue that
had the
Rules of 2006 extending assistance to family of a
deceased employee been not in
existence, family would
have been entitled to pension to the extent of 50% of
the last drawn pay.
As per the settled position in law, the
pensionary benefits available to family of a deceased
employee are not amenable for deduction for computing loss
of dependency. There is nothing
on record suggestive of the
fact that in addition to compassionate assistance under the
Rules,
family of the deceased is being paid pension till the
age of superannuation. Rather Rule 5(2) of
the 2006 Rules
specifically denies family pension as per normal rules... (emphasis supplied)

17 The view so taken by the High Court is not the correct reading of
the decision of three-Judge Bench
of this Court in Shashi Sharma
(supra) for more than one reason. First, this Court was conscious of
the fact that under Rule 5(2) of the 2006 Rules, the family pension
receivable by the family would be
payable, however, only after the
period, during which the financial assistance is received, is
completed.
In that context, in paragraph 24 of the reported decision,
the Court clearly noted that the amount
towards family pension
cannot be deducted from the claim amount for determination of a just
compensation under the Act. Further, the High Court has
erroneously assumed that the family of the
deceased would be
entitled for family pension amount immediately after the death of the
deceased
employee. That is in the teeth of the scheme of the 2006
Rules, in particular Rule 5(2) thereof. The
said Rules provide for
financial assistance on compassionate grounds, as also, other
benefits to the
family members of the deceased employee and as a
package thereof, Rule 5(2) stipulates that the
family pension as per
the normal rules would be payable to the family members only after
the period
of delivery of financial assistance is completed. The
validity of this provision is not put in issue.
Suffice it to say that the
view taken by the High Court in Ajmero (supra) is a departure from
the
scheme envisaged by the 2006 Rules, in particular, Rule 5(2).
That cannot be countenanced.

18 As a matter of fact, in the present case, the High Court

committed manifest error in assuming that
the respondent Nos. 1 and
2 would be eligible to receive financial assistance under the 2006
Rules.
The eligibility to receive such financial assistance has been
spelt out in Rule 3 of the 2006 Rules read
with the provision of
Pension/Family Pension Scheme, 1964. It appears that major sons
and married
daughters are not included in the definition. However,
we need not dilate on that aspect in the present
proceedings any
further. It has come in the evidence of Gobind Singh, Clerk in SDM
Office (PW-1) that
the legal representatives of the deceased have not
submitted any request for getting financial
assistance till he had
deposed. Indeed, respondent No. 1, who had entered the witness box,
did
depose that they had applied for getting salary of their deceased
mother. The fact remains that there
is no clear evidence on record
that respondent Nos. 1 and 2 are held to be eligible to get financial
assistance or in fact, they are getting such financial assistance under
the 2006 Rules. The High Court,
therefore, instead of providing for
deduction of the amount receivable by the legal representatives of
the
deceased on this count (under the 2006 Rules), from the
compensation amount, should have
independently determined the
compensation amount and ordered payment thereof subject to legal
representatives of the deceased filing affidavit/declaration before the
executing Court that they have
not received nor would they claim any
amount towards financial assistance under the 2006 Rules, so
as to
become entitled to withdraw the entire compensation amount.

19 Reverting to the determination of compensation amount, it is

noticed that the Tribunal proceeded
to determine the compensation
amount on the basis of net-salary drawn by the deceased for the
relevant period as Rs.16,918/- per month, while taking note of the
fact that her gross-salary was
Rs.23,123/- per month (presumably
below taxable income). Concededly, any deduction from the
grosssalary other than tax amount cannot be reckoned. In that, the actual
salary less tax amount
ought to have been taken into consideration
by the Tribunal for determining the compensation
amount, in light of
the dictum of the Constitution Bench of this Court in paragraph 59.3
of Pranay Sethi
(supra).
20 Similarly, the High Court despite having taken note of the
submission made by the respondent Nos.
1 and 2 that the deduction
for personal expenses of the deceased should be reckoned only as
one-
third (1/3rd) amount for determining loss of dependency,
maintained the deduction of 50% towards
that head as ordered by the
Tribunal. This Court in Pranay Sethi (supra), in paragraph 37,
adverted to
the dictum of this Court in Sarla Verma (Smt.) & Ors.
vs. Delhi Transport Corporation & Anr., (2009) 6
SCC 121 (para 30) with approval, wherein it
is held that if the dependant family members are 2 to 3, as
in this
case, the deduction towards personal and living expenses of the
deceased should be taken as
one-third (1/3rd). In other words, the
deduction towards personal expenses to the extent of 50% is
excessive and not just and proper considering the fact that the
respondent Nos. 1 and 2 alongwith
their respective families were
staying with the deceased at the relevant time and were largely
dependant on her income.

21 Be that as it may, the Tribunal, for excluding the amount

received by the deceased as family
pension due to demise of her
husband, had noted in paragraph 26, as under: -

26. Learned counsel for the claimants further requested

that about to family pension being
drawn by the deceased
also be calculated for the purpose of assessing the
compensation. This
contention and assertion of learned
counsel for the claimants does not carry any conviction with
the Tribunal because the deceased was getting family
pension in her own right as the widow of
the deceased and
cannot be termed as her income for the purpose of
computing the amount of
compensation.

The High Court, without reversing the said finding, proceeded to

include the amount of Rs.7,000/- per
month received by the deceased
as pension amount after demise of her husband. We are in
agreement with the view taken by the Tribunal and for the same
reason, have to reverse the
conclusion recorded by the High Court to
include the said amount as loss of dependency. That could
not have
been taken into account, as the same was payable only to the
deceased being widow and not
her income as such for the purpose of
computing the amount of compensation.

22 Considering the above, respondent Nos. 1 and 2 would be

entitled for compensation to be
reckoned on the basis of loss of
dependency, due to loss of gross salary (less tax amount, if any) of
the
deceased and future prospects and deduction of only one-third (1/3rd)
amount towards personal
expenses of the deceased. As regards the
multiplier 13 applied by the Tribunal and the High Court, the
same
needs no interference. As a result, on the facts and in the
circumstances of this case, the
amount payable towards
compensation will have to be recalculated on the following basis: -

Loss of dependency due to loss of income calculated at

Rs.31,26,229.60/- [(Rs.23,123/- x 12 x
13) + (30% future
prospects) (1/3rd deduction for personal expenses)]. In
addition, the claimants
would be entitled for a sum of
Rs.70,000/- towards conventional heads in terms of dictum
in
paragraph 59.8 of Pranay Sethi (supra). Thus, a total
sum of Rs.31,96,230/- (Rupees thirty-one
lakhs ninety-six
thousand two hundred thirty only), as rounded off, is
payable to the claimants.

However, this amount alongwith interest at the rate of 9% per annum

from the date of filing of the
claim petition till payment, will be
payable subject to the outcome of the application made by the
respondent Nos. 1 and 2 to the competent authority for grant of
financial assistance under the 2006
Rules. If that application is
allowed and the amount becomes payable towards financial
assistance
under the said Rules to the specified legal representatives
of the deceased, commensurate amount
will have to be deducted from
the compensation amount alongwith interest component thereon.
The
respondent Nos. 1 and 2, therefore, can be permitted to withdraw
the compensation amount only
upon filing of an affidavit-cumdeclaration before the executing Court that they have not received nor
would claim any amount towards financial assistance under the 2006
Rules and if already received or
to be received in future on that
account, the amount so received will be disclosed to the executing
Court, which will have to be deducted from the compensation amount
determined in terms of this
order. The compensation amount,
therefore, be paid to the respondent Nos. 1 and 2 subject to the
above
and upon giving an undertaking before the executing Court to
indemnify the insurance company
(appellant) to that extent.

23 The appeals are partly allowed in the aforementioned terms with

no order as to costs. Pending
interlocutory applications, if any, shall stand disposed of.
 8

2020 (0) AIJEL-SC 65725

SUPREME COURT OF INDIA

Hon'ble Judges:L.Nageswara Rao and Deepak Gupta JJ.

Kajal Versus Jagdish Chand

CIVIL APPEAL No. 735 of 2020 ; *J.Date :- FEBRUARY 5, 2020

MOTOR VEHICLES ACT, 1988 Section - 166 , 168

(a) Motor Vehicles Act, 1988 - S. 166, 168 - motor accident - serious injuries - principles with regard
to determination of just compensation - injuries cause deprivation to the body which entitles
claimant to claim damages - damages may vary according to gravity of injuries sustained by
claimant in an accident - on account of injuries, claimant may suffer consequential losses such as (i)
loss of earning, (ii) expenses on treatment which may include medical expenses, transportation,
special diet, attendant charges etc., (iii) loss or diminution to the pleasures of life by loss of a
particular part of the body, and (iv) loss of future earning capacity - damages can be pecuniary as
well as non pecuniary - Court has to make a judicious attempt to award damages, so as to
compensate claimant for the loss suffered by victim - on the one hand, compensation should not be
assessed very conservatively, but on other hand, compensation should also not be assessed in so
liberal a fashion so as to make it a bounty to claimant - Court while assessing compensation should
have regard to degree of deprivation and loss caused by such deprivation - compensation or
damages assessed for personal injuries should be substantial to compensate injured for deprivation
suffered throughout his/her life - they should not be just token damages - assessment of damages
in personal injury cases raises great difficulties - it is not easy to convert physical and mental loss
into monetary terms - there has to be a measure of calculated guess work and conjecture -
therefore, assessment, as best as can, should be made. (Para 5,6,12)

(b) Motor Vehicles Act, 1988 - S. 166, 168 - vehicular accident - expenses relating to medical
treatment due to accident - claimant remained in hospital for 51 days - some bills excluded by
courts below only on the ground that name of patient was not written on bills - whether
compensation should be restricted to bills paid in the name of claimant - held, there is no dispute
with regard to long period of treatment and hospitalisation of young girl aged 12 years - limiting the
amount only to the bills which have been paid in the name of claimant only, would not be reasonable
- therefore, amount payable for actual medical expenses is increased from Rs. 1,38,501/- to Rs.
2,00,000/- - amount awarded for transportation at Rs. 50,000/- is reasonable - therefore, under this
head Rs. 2,50,000/- awarded. (Para 19)

(c) Motor Vehicles Act, 1988 - S. 166, 168 - vehicular accident - loss of earning - both courts below
have concluded that since girl was a young child of 12 years only, notional income of Rs. 15,000/-
per annum can be taken into consideration - this young girl after studying could have worked and
would have earned much more than Rs. 15,000/- per annum - held, taking notional income to be Rs.
15,000/- per annum is not at all justified - minimum wages payable to a skilled workman is Rs.
4846/- per month - this would be the minimum amount which she would have earned on becoming a
major - therefore, adding 40% for future prospects, it works to be Rs. 6784.40/- per month, i.e.,
81,412.80 per annum - applying multiplier of 18 it works out to Rs. 14,65,430.40, which is rounded
off to Rs. 14,66,000/-. (Para 20)

(d) Motor Vehicles Act, 1988 - S. 166, 168 - motor accident - compensation - attendant charges -
attendant charges have been awarded by High Court @ Rs. 2,500/- per month for 44 years, which
works out to Rs. 13,20,000/- - this system is not a proper system - multiplier system should be
followed not only for determining compensation on account of loss of income but also for
determining attendant charges etc. (Para 21)

(e) Motor Vehicles Act, 1988 - S. 166, 168 - motor accident - just compensation - victim was
travelling on a tractor with her parents which was hit by a truck driven rashly - victim, a 12 year old
girl - in addition to 100% physical disability she is suffering from severe incontinence - she is
suffering from severe hysteria and she is left with a brain of a nine month old child - held, this is a
case where departure has to be made from normal rule and pain and suffering suffered by this child
is such that no amount of compensation can compensate - Tribunal has rightly awarded Rs.
3,00,000/- for loss of marriage prospects - claimant has been awarded only Rs. 2,00,000/- under
head of future medical treatment - this amount is a pittance - considering nature of her injuries and
the fact that she is bed ridden this child is bound to suffer from a lot of medical problems - in future
as this girl grows, she may face many other medical issues because of injuries suffered in accident -
it would not be unjust to award her Rs. 5,00,000/- for future medical expenses. (Para 24,26,28,29)

(f) Motor Vehicles Act, 1988 - S. 166, 168 - motor accident - just compensation - mode of payment -
award of interest - guidelines protect rights of minors, claimants who are under some disability and
also widows and illiterate person who may be deprived of compensation paid to them in lump sum by
unscrupulous elements - these victims may not be able to invest their monies properly and in such
cases MACT as well High courts must ensure that investments are made in nationalised banks to get
a high rate of interest - interest in most cases is sufficient to cover the monthly expenses - this court
directed that entire amount of compensation including amount enhanced shall carry an interest of
7.5% per annum from the date of filing of claim petition till payment/deposit of amount - this court
awarded sum of Rs. 62,27,000/- to claimant with interest @7.5% p.a. from the date of filing of claim
petition till payment/deposit of amount. (Para 30,31,32)

Imp.Para: [ 5 ] [ 6 ] [ 12 ] [ 19 ] [ 20 ] [ 21 ] [ 24 ] [ 26 ] [ 28 ] [ 29 ] [ 30 ] [ 31 ] [ 32 ]

Cases Referred To :

1. H. West & Son Ltd. V. Shephard, 1963 2 WLR 1359

2. K. Suresh V. New India Assurance Company Ltd. And Ors., 2012 12 SCC 274 : 2012 (10) Scale
516 : JT 2012 (10) 484 : 2012 (11) SCR 414 : 2012 (7) Supreme 577
3. M:s Concord Of India Insurance Co. Ltd. V. Nirmala Devi And Others, 1980 0 ACJ 55 : 1979 (4)
SCC 365 : 1979 AIR SC 1666 : 1979 (3) SCR 694 : 1979 SCC(Cri) 996
4. Municipal Corporation Of Delhi V. Subhagwati And Ors., 1966 0 ACJ 57 : 1966 AIR SC 1750 :
1966 (3) SCR 649 : 1967 (2) SCJ 361 : 1966 (2) SCA 96
5. Phillips V. Western Railway Co., 1874 4 QBD 406
6. Taylor V. O connor, 1971 0 AC 115
7. Ward V. James, 1965 1 AllER 563

Cases Relied on :
 1. General Manager, Kerala State Road Transport Corporation, Trivandrum V. Susamma Thomas
And Ors., 1994 2 SCC 176 : 1994 AIR SC 1631 : 1993 (4) Scale 643 : JT 1993 (Supp) 573 : 1994
AIR SCW 1356
2. Gobald Motor Service Ltd. V. R.M.K. Veluswami, AIR 1962 SC 1 : 1962 (1) SCR 929 : 1962 (1) SCJ
206 : 1962 (1) MLJ 105 : 1962 MLJ(Cri) 120
3. Mallikarjun V. Divisional Manager, The National Insurance Company Limited And Ors., 2013 10
SCALE 668 : 2014 (14) SCC 396 : 2014 AIR SC 736 : 2013 (10) Scale 668 : JT 2013 (13) 465
4. R.D. Hattangadi V. Pest Control (India) Pvt. Ltd., 1995 1 SCC 551 : 1995 AIR SC 755 : 1995 (1)
Scale 79 : JT 1995 (1) 304 : 1995 (1) SCR 75
5. Raj Kumar V. Ajay Kumar And Others, 2011 1 SCC 343 : 2010 (12) Scale 265 : 2010 (13) SCR 179
: 2011 (1) SCC(Cri) 1161 : 2011 (98) AIC 251
6. Sandeep Khanduja V. Atul Dande And Ors., 2017 3 SCC 351 : 2018 AIR SC(Supp) 1246 : 2017 (2)
Scale 314 : JT 2017 (2) 68 : 2017 (5) Supreme 29
7. U.P. State Road Transport Corporation And Ors. V. Trilok Chandra And Ors., 1996 4 SCC 362 :
1996 (4) Scale 522 : JT 1996 (5) 356 : 1996 (Supp2) SCR 443 : 1996 (4) Supreme 479

Cited in :

1. (Referred To) :- Lalan D.@ Lal Vs. Oriental Insurance Company Ltd., AIR 2020 SC 4508 : 2020
JX(SC) 583 : 2020 AIJEL_SC 66528
2. (Relied on) :- Pappu Deo Yadav Vs. Naresh Kumar, AIR 2020 SC 4424 : 2020 (11) Scale 192 : JT
2020 (9) SC 149 : 2021 (1) Supreme 425 : 2020 (4) RCR(Civ) 404 : 2020 (6) BLJud(SC) 359 :
2020 (5) CTC 926 : 2020 (5) ALT(SC) 211 : 2020 ACJ 2695 : 2020 JX(SC) 580 : 2020 AIJEL_SC
66525
3. (Referred To) :- Rajendra Singh Vs. National Insurance Company Limited, AIR 2020 SC 3144 :
2020 JX(SC) 443 : 2020 AIJEL_SC 66323
4. (Referred To) :- Kirti Vs. Oriental Insurance Company Ltd., AIR 2021 SC 353 : JT 2021 (1) SC 74 :
2021 JX(SC) 5 : 2021 AIJEL_SC 66912

Equivalent Citation(s):
2020 (4) SCC 413 : AIR 2020 SC 776

JUDGMENT :-

Deepak Gupta, J.

1 Kajal was a bright young girl. She used to attend school,

play with her friends and lead a normal life
like any other child.
Unfortunately, on 18th October, 2007, while Kajal was travelling
on a tractor with
her parents, the tractor was hit by a truck
which was driven rashly. In the said accident, Kajal suffered
serious injuries resulting in damage to her brain. This has had
very serious consequences on her. She
was examined at the Post
Graduate Institute of Medical Education and Research,
Chandigarh (PGI,
Chandigarh for short), for assessment of her
disability. According to the said report, because of head
injury
Kajal is left with a very low I.Q. and severe weakness in all her
four limbs, suffers from severe
hysteria and severe urinary
incontinence. Her disability has been assessed as 100%.

2 Dr. Chhabra (PW- 4), who was one of the members of the
Board which issued the disability
certificate (Ex.P6) stated that
as per the assessment her I.Q. is less than 20% of a child of her
age and
her social age is only of a 9 month old child. This means
that Kajal while lying on the bed will grow up
to be an adult with
all the physical and biological attributes which a woman would
get on attaining
adulthood, including menstruation etc., but her
mind will remain of a 9 month old child. Basically, she
will not
understand what is happening all around her.
3 How does one assess compensation in such a case? No
amount of money can compensate this
child for the injuries
suffered by her. She can never be put back in the same position.
However,
compensation has to be determined in terms of the
provisions of Motor Vehicles Act, 1988 (for short
the Act). The
Act requires determination of payment of just compensation and
it is the duty of the
court to ensure that she is paid compensation
which is just.

4 Kajal through her father filed a claim petition, under the

Act. The Motor Accident Claims Tribunal
(MACT for short)
awarded Rs.11,08,501/- and held that since there was violation
of the terms of policy
the insurance company would pay the
amount but would be entitled to recover the same from the
owner. The High Court enhanced the award amount to
Rs.25,78,501/- under the following heads:

Heads High Court

Age 12
Multiplier -
Income (taken to be) Rs. 15,000/-
Disability 100%
Loss of income and permanent disability Rs. 2.70.000/-
compensation
Pain, suffering loss of amenities Rs. 3.00.000/-
Attendant charges Rs. 3.20.000/-(Rs.2500
for 44 years)

Future medical expenses Rs. 2.00.000/-

Loss of marriage prospects Rs. 3.00.000/-
Medical Treatment Rs. 1.38.501/-

Transportation details / special diet Rs. 50.000/-

Total Rs.25,78,501/-

Aggrieved by the award the claimant is before this Court.

5 The principles with regard to determination of just

compensation contemplated under the Act are
well settled.
Injuries cause deprivation to the body which entitles the claimant
to claim damages. The
damages may vary according to the gravity
of the injuries sustained by the claimant in an accident. On
account of the injuries, the claimant may suffer consequential
losses such as (i) loss of earning; (ii)
expenses on treatment which
may include medical expenses, transportation, special diet,
attendant
charges etc., (iii) loss or diminution to the pleasures of
life by loss of a particular part of the body, and
(iv) loss of future
earning capacity. Damages can be pecuniary as well as nonpecuniary, but all have to
be assessed in Rupees and Paise.

6 It is impossible to equate human suffering and personal

deprivation with money. However, this is
what the Act enjoins
upon the courts to do. The court has to make a judicious attempt
to award
damages, so as to compensate the claimant for the loss
suffered by the victim. On the one hand, the
compensation
should not be assessed very conservatively, but on the other
hand, compensation
should also not be assessed in so liberal a
fashion so as to make it a bounty to the claimant. The
court while
assessing the compensation should have regard to the degree of
deprivation and the loss
caused by such deprivation. Such
compensation is what is termed as just compensation. The
compensation or damages assessed for personal injuries should
be substantial to compensate the
injured for the deprivation
suffered by the injured throughout his/her life. They should not
be just token
damages.

7 There are numerous cases where the principles for grant of

compensation have been enunciated. It
would be relevant to
quote pertinent observations from a few.

8 In Phillips v. Western Railway Co., 1874 4 QBD 406 Field, J., while
emphasizing that damages must
be full and adequate, held thus:

"You cannot put the plaintiff back again into his original
position, but you must bring your
reasonable common
sense to bear, and you must always recollect that this is
the only occasion
on which compensation can be given.
The plaintiff can never sue again for it. You have,
therefore, now to give him compensation once and for all.
He has done no wrong, he has
suffered a wrong at the
hands of the defendants and you must take care to give
him full fair
compensation for that which he has
suffered." Besides, the Tribunals should always
remember
that the measures of damages in all these
cases "should be such as to enable even a tortfeasor
to
say that he had amply atoned for his misadventure".

9 In the case of Mediana, 1900 AC 113 Lord Halsbury held:

"Of course the whole region of inquiry into damages is

one of extreme difficulty. You very often
cannot even lay
down any principle upon which you can give damages;
nevertheless, it is
remitted to the jury, or those who
stand in place of the jury, to consider what compensation
in
money shall be given for what is a wrongful act. Take
the most familiar and ordinary case: how
is anybody to
measure pain and suffering in moneys counted? Nobody
can suggest that you can
by any arithmetical calculation
establish what is the exact amount of money which
would
represent such a thing as the pain and suffering
which a person has undergone by reason of an
accident.
In truth, I think it would be very arguable to say that a
person would be entitled to no
damages for such thing.
What manly mind cares about pain and suffering that is
past? But,
nevertheless, the law recognizes that as a
topic upon which damages may be given."

10 The following observations of Lord Morris in his speech in H.

West & Son Ltd. v. Shephard, 1963 2
WLR 1359 are very pertinent:

"Money may be awarded so that something tangible may

be procured to replace something else
of the like nature
which has been destroyed or lost. But money cannot
renew a physical frame
that has been battered and
shattered. All that Judges and courts can do is to award
sums which
must be regarded as giving reasonable
compensation. In the process there must be the
endeavour to secure some uniformity in the general
method of approach. By common assent
awards must be
reasonable and must be assessed with moderation.
Furthermore, it is eminently
desirable that so far as
possible comparable injuries should be compensated by
comparable
awards."

In the same case Lord Devlin observed that the proper approach
to the problem was to adopt a test as
to what contemporary
society would deem to be a fair sum, such as would allow the
wrongdoer to
"hold up his head among his neighbours and say
with their approval that he has done the fair thing",
which
should be kept in mind by the court in determining
compensation in personal injury cases.

11 Lord Denning while speaking for the Court of Appeal in the

case of Ward v. James, 1965 1 All ER
563 laid down the following three basic
principles to be followed in such like cases:
 "Firstly, accessibility: In cases of grave injury, where the
body is wrecked or brain destroyed, it is
very difficult to
assess a fair compensation in money, so difficult that the
award must basically
be a conventional figure, derived
from experience or from awards in comparable cases.
Secondly, uniformity: There should be some measure of
uniformity in awards so that similar
decisions may be
given in similar cases; otherwise there will be great
dissatisfaction in the
community and much criticism of
the administration of justice. Thirdly, predictability:
Parties
should be able to predict with some measure of
accuracy the sum which is likely to be awarded
in a
particular case, for by this means cases can be settled
peaceably and not brought to court, a
thing very much to
the public good."

12 The assessment of damages in personal injury cases raises

great difficulties. It is not easy to
convert the physical and
mental loss into monetary terms. There has to be a measure of
calculated
guess work and conjecture. An assessment, as best
as can, in the circumstances, should be made.

13 In McGregor s Treatise on Damages, 14th Edn., para 1157,

referring to heads of damages in
personal injury actions states:

"The person physically injured may recover both for his

pecuniary losses and his non- pecuniary
losses. Of these
the pecuniary losses themselves comprise two separate
items, viz., the loss of
earnings and other gains which the
plaintiff would have made had he not been injured and
the
medical and other expenses to which he is put as a
result of the injury, and the courts have sub-
divided the
non- pecuniary losses into three categories, viz., pain and
suffering, loss of amenities
of life and loss of expectation
of life."

14 In M/s Concord of India Insurance Co. Ltd. v. Nirmala

Devi and others, 1980 ACJ 55 (SC) this Court
held:

"2 .The determination of the quantum must be liberal,

not niggardly since the law values life and
limb in a free
country in generous scales."

15 In R.D. Hattangadi v. Pest Control (India) Pvt. Ltd., 1995) 1 SCC 551
dealing with the different heads
of compensation in injury cases
this Court held thus:

"9. Broadly speaking, while fixing the amount of

compensation payable to a victim of an
accident, the
damages have to be assessed separately as pecuniary
damages and special
damages. Pecuniary damages are
those which the victim has actually incurred and which
are
capable of being calculated in terms of money;
whereas non- pecuniary damages are those
which are
incapable of being assessed by arithmetical calculations.
In order to appreciate two
concepts pecuniary damages
may include expenses incurred by the claimant: (i)
medical
attendance; (ii) loss of earning of profit up to the
date of trial; (iii) other material loss. So far as
nonpecuniary damages are concerned, they may include:
(i) damages for mental and physical
shock,
pain and suffering already suffered or likely to
be suffered in the future; (ii) damages to
compensate for the loss of amenities of life
which may include a variety of matters, i.e., on
account of injury the claimant may not be able
to walk, run or sit; (iii) damages for loss of
expectation of life, i.e. on account of injury the
normal longevity of the person concerned is
shortened; (iv) inconvenience, hardship,
discomfort, disappointment, frustration and
mental
stress in life."

16 In Raj Kumar v. Ajay Kumar and Others, (2011) 1 SCC 343 this Court laid
down the heads under
which compensation is to be awarded for
personal injuries.

"6. The heads under which compensation is awarded in

personal injury cases are the following:
Pecuniary damages (Special damages)
 (i)Expenses relating to treatment, hospitalization,
medicines, transportation, nourishing food,
and
miscellaneous expenditure.

(ii) Loss of earnings (and other gains) which the

injured would have made had he not been
injured, comprising:

(a) Loss of earning during the period of

treatment;

(b) Loss of future earnings on account of permanent disability.

(iii) Future medical expenses.

Non- pecuniary damages (General damages)

(iv) Damages for pain, suffering and trauma as a

consequence of the injuries.

(v) Loss of amenities (and/or loss of prospects of

marriage).

(vi) Loss of expectation of life (shortening of

normal longevity).

In routine personal injury cases, compensation will be

awarded only under heads (i), (ii) (a) and (iv). It
is only in
serious cases of injury, where there is specific medical
evidence corroborating the evidence
of the claimant,
that compensation will be granted under any of the
heads (ii)(b), (iii), (v) and (vi)
relating to loss of future
earnings on account of permanent disability, future
medical expenses, loss of
amenities (and/or loss of
prospects of marriage) and loss of expectation of life.

17 In K. Suresh v. New India Assurance Company Ltd.

and Ors., (2012) 12 SCC 274 this Court held as
follows :

2...There cannot be actual compensation for anguish of

the heart or for mental tribulations. The
quintessentiality lies in the pragmatic computation of the
loss sustained which has to be in the
realm of realistic
approximation. Therefore, Section 168 of the Motor
Vehicles Act, 1988 (for
brevity the Act ) stipulates that
there should be grant of just compensation . Thus, it
becomes a
challenge for a court of law to determine just
compensation which is neither a bonanza nor a
windfall,
and simultaneously, should not be a pittance.

18 Applying the aforesaid principles, we now proceed to assess

the compensation.

Expenses relating to treatment, hospitalization, medicines,

transportation etc.

19 The High Court under the two heads of medical treatment

and transport has awarded Rs.1,88,501/-
. Out of this an
amount of Rs.1,38,501/- is the actual expense incurred on the
treatment of Kajal. One
must remember that amongst people
who are not Government employees and belong to the poorer
strata of society, bills are not retained. Some of the bills have
been excluded by the courts below only
on the ground that the
name of the patient is not written on the bill. There is no
dispute with regard to
the long period of treatment and
hospitalisation of this young girl. Immediately after the accident
on
18.10.2007, she was admitted at a hospital in Karnal. From
there, she was referred to the PGI,
Chandigarh, where she
remained admitted from 21.10.2007 till 12.11.2007 and,
thereafter, she was
again admitted in the hospital from
12.11.2007 till 08.12.2007. She was in the hospital for almost
51
days, and both Dr. Sameer Aggarwal (PW- 3) from the hospital
at Karnal and Dr. Rajesh Chhabra (PW-
4), from PGI,
Chandigarh, have supported this. Limiting the amount only to
the bills which have been
paid in the name of the claimant only,
would not be reasonable. Therefore, the amount payable for
actual medical expenses is increased from Rs.1,38,501/- to
Rs.2,00,000/- . The amount awarded for
transportation at
Rs.50,000/- is reasonable. Therefore, under this head we award
Rs.2,50,000/- .
 Loss of earnings

20 Both the courts below have held that since the girl was a
young child of 12 years only notional
income of Rs.15,000/- per
annum can be taken into consideration. We do not think this is
a proper way
of assessing the future loss of income. This young
girl after studying could have worked and would
have earned
much more than Rs.15,000/- per annum. Each case has to be
decided on its own
evidence but taking notional income to be
Rs.15,000/- per annum is not at all justified. The appellant
has
placed before us material to show that the minimum wages
payable to a skilled workman is
Rs.4846/- per month. In our
opinion this would be the minimum amount which she would
have earned
on becoming a major. Adding 40% for the future
prospects, it works to be Rs.6784.40/- per month, i.e.,
81,412.80 per annum. Applying the multiplier of 18 it works out
to Rs.14,65,430.40, which is rounded
off to Rs.14,66,000/-

21 Though the claimant would have been entitled to separate

attendant charges for the period during
which she was
hospitalised, we are refraining from awarding the same because
we are going to award
her attendant charges for life. At the
same time, we are clearly of the view that the tortfeasor cannot
take benefit of the gratuitous service rendered by the family
members. When this small girl was taken
to PGI, Chandigarh,
or was in her village, 2- 3 family members must have
accompanied her. Even if we
are not paying them the attendant
charges they must be paid for loss of their wages and the
amount
they would have spent in hospital for food etc. These
family members left their work in the village to
attend to this
little girl in the hospital at Karnal or Chandigarh. In the hospital
the claimant would have
had at least two attendants, and taking
the cost of each at Rs.500/- per day for 51 days, we award her
Rs.51,000/- .

Attendant charges

22 The attendant charges have been awarded by the High

Court @ Rs.2,500/- per month for 44 years,
which works out to
Rs.13,20,000/- . Unfortunately, this system is not a proper
system. Multiplier
system is used to balance out various factors.
When compensation is awarded in lump sum, various
factors are
taken into consideration. When compensation is paid in lump
sum, this Court has always
followed the multiplier system. The
multiplier system should be followed not only for determining
the
compensation on account of loss of income but also for
determining the attendant charges etc. This
system was
recognised by this Court in Gobald Motor Service Ltd. v.
R.M.K. Veluswami, AIR 1962 SC
1. The multiplier system factors in the
inflation rate, the rate of interest payable on the lump sum
award, the longevity of the claimant, and also other issues such
as the uncertainties of life. Out of all
the various alternative
methods, the multiplier method has been recognised as the most
realistic and
reasonable method. It ensures better justice
between the parties and thus results in award of just
compensation within the meaning of the Act.

23 It would be apposite at this stage to refer to the observation

of Lord Reid in Taylor v. O Connor,
1971 AC 115:

"Damages to make good the loss of dependency over a

period of years must be awarded as a
lump sum and that
sum is generally calculated by applying a multiplier to
the amount of one
year's dependency. That is a perfectly
good method in the ordinary case but it conceals the fact
that there are two quite separate matters involved, the
present value of the series of future
payments, and the
discounting of that present value to allow for the fact that
for one reason or
another the person receiving the
damages might never have enjoyed the whole of the
benefit of
the dependency. It is quite unnecessary in the
ordinary case to deal with these matters
separately.
Judges and counsel have a wealth of experience which is
an adequate guide to the
selection of the multiplier and
any expert evidence is rightly discouraged. But in a case
where
the facts are special, I think, that these matters
must have separate consideration if even rough
 justice is
to be done and expert evidence may be valuable or even
almost essential. The special
factor in the present case is
the incidence of Income Tax and, it may be, surtax."

24 This Court has reaffirmed the multiplier method in various

cases like Municipal Corporation of
Delhi v. Subhagwati
and Ors., 1966 ACJ 57 U.P. State Road Transport Corporation and Ors.
v. Trilok
Chandra and Ors., (1996) 4 SCC 362 Sandeep Khanduja v. Atul
Dande and Ors., (2017) 3 SCC 351. This
Court has also recognised that
Schedule II of the Act can be used as a guide for the multiplier to
be
applied in each case. Keeping the claimant s age in mind, the
multiplier in this case should be 18 as
opposed to 44 taken by
the High Court.

25 Having held so, we are clearly of the view that the basic
amount taken for determining attendant
charges is very much
on the lower side. We must remember that this little girl is
severely suffering
from incontinence meaning that she does not
have control over her bodily functions like passing urine
and
faeces. As she grows older, she will not be able to handle her
periods. She requires an attendant
virtually 24 hours a day.
She requires an attendant who though may not be medically
trained but must
be capable of handling a child who is bed
ridden. She would require an attendant who would ensure
that
she does not suffer from bed sores. The claimant has placed
before us a notification of the State
of Haryana of the year 2010,
wherein the wages for skilled labourer is Rs.4846/- per month.
We,
therefore, assess the cost of one attendant at Rs.5,000/- and she will require two attendants which
works out to
Rs.10,000/- per month, which comes to Rs.1,20,000/- per
annum, and using the multiplier
of 18 it works out to
Rs.21,60,000/- for attendant charges for her entire life. This
takes care of all the
pecuniary damages.

Pain, Suffering and Loss of Amenities

26 Coming to the non- pecuniary damages under the head of

pain, suffering, loss of amenities, the
High Court has awarded
this girl only Rs.3,00,000/- . In Mallikarjun v. Divisional
Manager, The National
Insurance Company Limited and
Ors., 2013 (10) SCALE 668 this Court while dealing with the issue of
award under
this head held that it should be at least Rs.6,00,000/- , if the
disability is more than 90%.
As far as the present case is
concerned, in addition to the 100% physical disability the young
girl is
suffering from severe incontinence, she is suffering from
severe hysteria and above all she is left with
a brain of a nine
month old child. This is a case where departure has to be made
from the normal rule
and the pain and suffering suffered by this
child is such that no amount of compensation can
compensate.

27 One factor which must be kept in mind while assessing the

compensation in a case like the
present one is that the claim can
be awarded only once. The claimant cannot come back to court
for
enhancement of award at a later stage praying that
something extra has been spent. Therefore, the
courts or the
tribunals assessing the compensation in a case of 100%
disability, especially where
there is mental disability also, should
take a liberal view of the matter when awarding compensation.
While awarding this amount we are not only taking the physical
disability but also the mental disability
and various other
factors. This child will remain bed- ridden for life. Her mental
age will be that of a
nine month old child. Effectively, while her
body grows, she will remain a small baby. We are dealing
with a
girl who will physically become a woman but will mentally
remain a 9 month old child. This girl
will miss out playing with
her friends. She cannot communicate; she cannot enjoy the
pleasures of life;
she cannot even be amused by watching
cartoons or films; she will miss out the fun of childhood, the
excitement of youth; the pleasures of a marital life; she cannot
have children who she can love let
alone grandchildren. She will
have no pleasure. Her s is a vegetable existence. Therefore, we
feel in
the peculiar facts and circumstances of the case even
after taking a very conservative view of the
matter an amount
payable for the pain and suffering of this child should be at least
Rs.15,00,000/- .

Loss of marriage prospects

28 The Tribunal has awarded Rs.3,00,000/- for loss of
marriage prospects. We see no reason to
interfere with this
finding.

Future medical treatment

29 The claimant has been awarded only Rs.2,00,000/- under

this head. This amount is a pittance.
Keeping in view the
nature of her injuries and the fact that she is bed- ridden this
child is bound to
suffer from a lot of medical problems. True it
is that there is no evidence in this regard but there can
hardly
be such evidence. She may require special mattress which will
have to be changed frequently.
In future as this girl grows, she
may face many other medical issues because of the injuries
suffered
in the accident. Keeping in view her young age and
assuming she would live another 50- 60 years, it
would not be
unjust to award her Rs.5,00,000/- for future medical expenses. How the compensation
should be invested?

30 The tribunal while awarding the compensation had stated

that the amount payable to the share of
Kajal would be kept in a
Fixed Deposit till she attains the age of 18 years. The High
Court while
enhancing the amount of compensation has directed
that the enhanced amount be paid to the
appellant within 45
days. This is totally contrary to the guidelines laid down by this
Court in General
Manager, Kerala State Road Transport
Corporation, Trivandrum v. Susamma Thomas and Ors., (1994)
2 SCC 176
wherein it has been held clearly that the amount payable to the
minors should not be
normally released. The guidelines in this
case were as follows :

17 .

(i) The Claims Tribunal should, in the case of minors,

invariably order the amount of
compensation awarded to
the minor be invested in long term fixed deposits at least
till the date
of the minor attaining majority. The expenses
incurred by the guardian or next friend may,
however, be
allowed to be withdrawn;

(ii) In the case of illiterate claimants also the Claims Tribunal

should follow the procedure set out
in (i) above, but if
lump sum payment is required for effecting purchases of
any movable or
immovable property such as, agricultural
implements, rickshaw, etc., to earn a living, the Tribunal
may consider such a request after making sure that the
amount is actually spent for the purpose
and the demand
is not a ruse to withdraw money;

(iii) In the case of semi- literate persons the Tribunal should

ordinarily resort to the procedure set
out at (i) above
unless it is satisfied, for reasons to be stated in writing,
that the whole or part of
the amount is required for
expanding and existing business or for purchasing some
property as
mentioned in (ii) above for earning his
livelihood, in which case the Tribunal will ensure that the
amount is invested for the purpose for which it is
demanded and paid;

(iv) In the case of literate persons also the Tribunal may

resort to the procedure indicated in (i)
above, subject to
the relaxation set out in (ii) and (iii) above, if having regard
to the age, fiscal
background and strata of society to
which the claimant belongs and such other
considerations,
the Tribunal in the larger interest of the
claimant and with a view to ensuring the safety of the
compensation awarded to him thinks it necessary to do
order;

(v) In the case of widows the Claims Tribunal should

invariably follow the procedure set out in (i)
above;

(vi) In personal injury cases if further treatment is necessary

the Claims Tribunal on being
satisfied about the same,
which shall be recorded in writing, permit withdrawal of
such amount
as is necessary for incurring the expenses
for such treatment;
 (vii) In all cases in which investment in long term fixed
deposits is made it should be on
condition that the Bank
will not permit any loan or advance on the fixed deposit
and interest on
the amount invested is paid monthly
directly to the claimant or his guardian, as the case may
be;

(viii) In all cases Tribunal should grant to the claimants

liberty to apply for withdrawal in case of
an emergency. To
meet with such a contingency, if the amount awarded is
substantial, the
Claims Tribunal may invest it in more
than one Fixed Deposit so that if need be one such F.D.R.
can be liquidated .

These guidelines protect the rights of the minors, claimants who

are under some disability and also
widows and illiterate person
who may be deprived of the compensation paid to them in lump
sum by
unscrupulous elements. These victims may not be able
to invest their monies properly and in such
cases the MACT as
well the High courts must ensure that investments are made in
nationalised banks
to get a high rate of interest. The interest in
most cases is sufficient to cover the monthly expenses. In
special cases, for reasons to be given in writing, the MACT or the
trial court may release such amount
as is required. We reiterate
these guidelines and direct that they should be followed by all
the tribunals
and High Courts to ensure that the money of the
victims is not frittered away.

Interest

31 The High Court enhanced the amount of compensation by

Rs.14,70,000/- and awarded interest @
7.5% per annum but
directed that the interest of 7.5% shall be paid only from the
date of filing of the
appeal. This is also incorrect. We are
constrained to observe that the High Court was not right in
awarding interest on the enhanced amount only from the date of
filing of the appeal. Section 171 of
the Act reads as follows :

171. Award of interest where any claim is allowed. Where any Claims Tribunal allows a claim for
compensation made under this Act, such Tribunal may
direct that in addition to the amount of
compensation
simple interest shall also be paid at such rate and from
such date not earlier than
the date of making the claim
as it may specify in this behalf.

Normally interest should be granted from the date of filing of the

petition and if in appeal
enhancement is made the interest
should again be from the date of filing of the petition. It is only if
the appeal is filed after an inordinate delay by the claimants, or
the decision of the case has been
delayed on account of
negligence of the claimant, in such exceptional cases the interest
may be
awarded from a later date. However, while doing so, the
tribunals/High Courts must give reasons why
interest is not
being paid from the date of filing of the petition. Therefore, we
direct that the entire
amount of compensation including the
amount enhanced by us shall carry an interest of 7.5% per
annum from the date of filing of the claim petition till
payment/deposit of the amount.

Relief

32 In view of the above, we award a sum of Rs.62,27,000/- to the claimant under the following heads :

S.No Heads Amount

(i) Expenses relating to treatment, Rs. 2.50.000/-

hospitalisation and transportation

(ii) Loss of earnings (family members) Rs. 51.000/-

(iii) Loss of future earnings Rs. 14.66.000/

(iv) Attendant charges Rs.21.60.000/-

(v) Pain, suffering, loss of amenities Rs.15.00.000/-

(vi) Loss of Marriage prospects Rs. 3.00.000/-

(vii) Future medical treatment Rs. 5.00.000/-

This amount shall carry an interest @7.5% p.a. from the date of
filing of the claim petition till
payment/deposit of the amount.
Obviously, the insurance company shall be entitled to adjust the
amount already paid. Further, the insurance company shall
also be entitled to recover the amount from
the owner in terms of
the award of the MACT, which has not been challenged either
before the High
Court or us.

33 We are aware that the amount awarded by us is more than

the amount claimed. However, it is well
settled law that in
motor accident claim petitions, the Court must award just
compensation and, in
case, the just compensation is more than
the amount claimed, that must be awarded especially where
the
claimant is a minor.

34 The insurance company shall deposit the enhanced amount

before the MACT in terms of the
judgment after deducting the
amount already paid by the insurance company within a period
of 3
months from today. The MACT shall keep the entire
amount in a fixed deposit in a nationalised bank,
for a period of
5 years, giving highest rate of interest. The interest payable on
this amount shall be
released on quarterly basis to the father of
the child. This amount shall be spent for paying the
attendants
and for the care of the child alone. Even after 5 years since this
child for all intents and
purpose shall remain a person under a
disability, the MACT shall keep renewing the amount on these
terms. We, however, further direct that in case the parents or
the guardian moves an application for
release of some amount to
meet some special medical expenses, then MACT may consider
release of
the same.

35 The appeal is disposed of in the aforesaid terms. No order

as to costs. Pending application(s), if
any, also stand(s) disposed of.
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 1 Saturday, October 23, 2021
Printed For: J. C. Doshi
9
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 2 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 3 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 4 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 5 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 6 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 7 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 8 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 9 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 10 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 11 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 12 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 13 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 14 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 15 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 16 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
SCC Online Web Edition, © 2021 EBC Publishing Pvt. Ltd.
Page 17 Saturday, October 23, 2021
Printed For: J. C. Doshi
SCC Online Web Edition: https://www.scconline.com/
© 2021 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
 10

2020 (0) AIJEL-SC 66419

SUPREME COURT OF INDIA

Hon'ble Judges:Sanjay Kishan Kaul, Ajay Rastogi and Aniruddha Bose JJ.

Erudhaya Priya Versus State Express Transport Corporation Ltd.

CIVIL APPEAL No. 2811 of 2020 ; 2812 of 2020 ; *J.Date :- JULY 27, 2020

MOTOR VEHICLES ACT, 1988 Section - 168 , 173

(a) Motor Vehicles Act, 1988 - S. 168, 173 - Tamil Nadu Motor Vehicles Accident Claims Tribunal Rules, 1989 - R. 3 - motor
accident - grievous injury - selection of appropriate multiplier - increase of multiplier is sought on the basis of age of appellant -
held, in age group of 15-25 years, multiplier has to be '18' along with factoring in extent of disability - multiplier to be applied in
case of appellant has to be '18' and not '17'. (Para 7)

(b) Motor Vehicles Act, 1988 - S. 168, 173 - Tamil Nadu Motor Vehicles Accident Claims Tribunal Rules, 1989 - R. 3 - motor
accident - grievous injury - permanent disability - loss of earning capacity - future prospect - held, victim who suffers a permanent
or temporary disability occasioned by an accident is entitled to award of compensation - multiplier method was logically sound
and legally well established to quantify loss of income as result of death or permanent disability suffered in accident - disability
certi cate shows admission/hospitalization on 8 occasions for various number of days over 11/2 years - while applying multiplier
method, future prospects on advancement in life and career are also to be taken into consideration - future prospects must also
be applied in case of appellant taking permanent disability as 31.1% - quanti cation of the same on the basis of judgment in
National Insurance Co. Ltd. case vs. Pranay Sethi and Others, considering age of appellant, would be 50% of actual salary in
present case. (Para 7)

(c) Motor Vehicles Act, 1988 - S. 168, 173 - Tamil Nadu Motor Vehicles Accident Claims Tribunal Rules, 1989 - R. 3 - motor
accident - quantum of compensation - grievous personal injuries - determination of interest rate - however, claim was con ned to
9% in line with interest rates - held, appellant would be entitled to compensation of Rs. 41,69,831/as claimed along with simple
interest at rate of 9% per annum from date of application till date of payment - impugned order High Court set aside - appeals
allowed. (Para 7,8)

Imp.Para: [ 7 ] [ 8 ]

Cases Relied on :

1. Jagdish V. Mohan & Others, 2018 4 SCC 571 : 2018 AIR SC 1347 : 2018 (3) Scale 615 : JT 2018 (3) 112 : 2018 (2) Supreme
388
2. National Insurance Company Limited V. Pranay Sethi And Others, 2017 16 SCC 680 : 2017 AIR SC 5157 : 2017 (13) Scale 12 :
JT 2017 (10) 450 : 2017 (8) Supreme 107
3. Sandeep Khanuja V. Atul Dande & Another, 2017 3 SCC 351 : 2018 AIR SC(Supp) 1246 : 2017 (2) Scale 314 : JT 2017 (2) 68 :
2017 (5) Supreme 29
4. Sarla Verma (Smt) And Others. V. Delhi Transport Corporation And Another, 2009 6 SCC 121 : 2009 AIR SC 3104 : 2009 (6)
Scale 129 : JT 2009 (6) 495 : 2009 (5) SCR 1098

Cited in :

1. (Referred To) :- Karthik Subramanian Vs. B.Sarath Babu & Anr., 2021 JX(SC) 170 : 2021 AIJEL_SC 67111

Equivalent Citation(s):
AIR 2020 SC 4284 : 2020 (9) Scale 213

JUDGMENT :-

SANJAY KISHAN KAUL, J.

1 Leave granted.

2 On the fateful day of 16.08.2011, the appellant was travelling from Chennai to Bangalore in a bus owned by the respondent
State Corporation bearing registration No. TN-01-N-7531. At about 5.40 a.m., while the bus was moving on the Kolar Bangalore
National Highway, it ran into a stationary lorry. The collision resulted in multiple injuries to numerous passengers including the
appellant, and caused death of the bus conductor on the spot. The appellant was rushed to R.L. Jallappa Research & Medical
College Hospital, Tamak, Kolar and further treatment was administered at the Manipal Hospital, Bangalore where she remained
admitted for 8 months. The injuries to the appellant were grievous including fractures in the arms and legs and she suffered a
disability of 31.1% of the whole body.

3 An FIR was registered in pursuance of investigation naming the driver of the bus as an accused. Chargesheet was filed. But
what is relevant is that the appellant filed a claim petition before the Motor Accident Claims Tribunal ( MACT ), Madurai under
Section 166 of the Motor Vehicles Act, 1988 ( MV Act ) read with Rule 3(1) of the Tamil Nadu Motor Vehicles Accident Claims
Tribunal Rules, 1989 claiming a compensation of Rupees One Crore for injuries sustained in the accident. Evidence was led by
both the parties and the MACT, on a perusal of the documents and oral testimonies, including the rough sketch and the
chargesheet, came to the conclusion that the accident occurred due to the rash and negligent manner of driving of the bus driver
of the bus owned by the respondent State Corporation and, thus, held the respondent liable to pay compensation to the appellant.
In terms of the judgment dated 20.10.2014, the MACT opined that the permanent disability of 31.1% would have to be considered
and applied the multiplier method to calculate the loss of earning power. Since the appellant was 23 years of age, multiplier of 17
was applied on the monthly salary of the appellant as a software engineer and the compensation was worked out for loss of
earning power to Rs. 9,27,424/. The compensation was also attributed under various heads of extra nourishment, medical
expenses, physiotherapy, loss of matrimonial aspects, loss of comfort and amenities, mental agony, and pain and suffering. The
total quantification of the compensation by the MACT was of Rs. 35,24,288/-payable by the respondent State Corporation along
with interest @ 7.5% per annum from the date of petition till the date of realization with costs.

4 The respondent State Corporation filed an appeal against this order and the appellant filed cross objections. Both of them were
decided by the impugned judgment of the High Court dated 27.10.2017 by a common order. The High Court, confirming the
findings of negligence of the bus driver, reduced the compensation to Rs. 25,00,000/-primarily on the ground that the multiplier
method for quantifying loss of earning power has been wrongly applied as it had not come on record as to how the injuries
suffered by the appellant would have a bearing on her earning capacity as a software engineer. The interest rate was sustained.

5 The appellant has claimed before this Court that she is entitled to enhancement of compensation even over and above what
was granted by the MACT and has quantified the same as Rs. 41,69,831/-under various heads along with claiming a revised
interest rate @ 12% per annum.

6 We heard learned counsels for the parties. They have also filed short synopses of their respective claims and rebuttals thereof,
with the appellant enlisting the principles which can apply to her case, the law being now well settled in like cases.

7 There are three aspects which are required to be examined by us:

(a) the application of multiplier of 17 instead of 18 ;

The aforesaid increase of multiplier is sought on the basis of age of the appellant as 23 years relying on the judgment in
National Insurance Company Limited v. Pranay Sethi and Others, (2017) 16 SCC 680. In para 42 of the said judgment, the
Constitution Bench effectively affirmed the multiplier method to be used as mentioned in the table in the case of Sarla
Verma (Smt) and Others. v. Delhi Transport Corporation and Another, (2009) 6 SCC 121. In the age group of 1525 years, the
multiplier has to be 18 along with factoring in the extent of disability.

The aforesaid position is not really disputed by learned counsel for the respondent State Corporation and, thus, we come to
the conclusion that the multiplier to be applied in the case of the appellant has to be 18 and not 17 .

(b) Loss of earning capacity of the appellant with permanent disability of31.1% In respect of the aforesaid, the appellant has
claimed compensation on what is stated to be the settled principle set out in Jagdish v. Mohan & Others, 3 (2018) 4 SCC 571
and Sandeep Khanuja v. Atul Dande & Another, (2017) 3 SCC 351. We extract below the principle set out in the Jagdish case
(supra) in para 8:

8. In assessing the compensation payable the settled principles need to be borne in mind. A victim who suffers a permanent
or temporary disabilityoccasioned by an accident is entitled to the award ofcompensation. The award of compensation must
coveramong others, the following aspects:

(i) Pain, suffering and trauma resulting from the accident;

(ii) Loss of income including future income;

(iii) The inability of the victim to lead a normal life together with its amenities;

(iv) Medical expenses including those that the victim may be required to undertakein future; and

(v) Loss of expectation of life.

[emphasis supplied]

The aforesaid principle has also been emphasized in an earlier judgment, i.e. the Sandeep Khanuja case (supra) opining that
the multiplier method was logically sound and legally well established to quantify the loss of income as a result of death or
permanent disability suffered in an accident.

In the factual contours of the present case, if we examine the disability certificate, it shows the admission/hospitalization on 8
occasions for various number of days over 1 1/2 years from August 2011 to January 2013. The nature of injuries had been set out
as under:

Nature of injury:

(i) compound fracture shaft left humerus

 (ii) fracture both bones left forearm

(iii) compound fracture both bones right forearm

(iv) fracture 3rd, 4th & 5th metacarpals right hand

(v) subtrochanteric fracture right femur

(vi) fracture shaft left femur

(vii) fracture both bones left leg

We have also perused the photographs annexed to the petition showing the current physical state of the appellant, though it
is stated by learned counsel for the respondent State Corporation that the same was not on record in the trial court. Be that
as it may, this is the position even after treatment and the nature of injuries itself show their extent. Further, it has been
opined in para 12 of Sandeep Khanuja case (supra) that while applying the multiplier method, future prospects on
advancement in life and career are also to be taken into consideration.

We are, thus, unequivocally of the view that there is merit in the contention of the appellant and the aforesaid principles with
regard to future prospects must also be applied in the case of the appellant taking the permanent disability as 31.1%. The
quantification of the same on the basis of the judgment in National Insurance Co. Ltd. case (supra), more specifically para
59.3, considering the age of the appellant, would be 50% of the actual salary in the present case.

(c) The third and the last aspect is the interest rate claimed as 12% In respect of the aforesaid, the appellant has watered
down the interest rate during the course of hearing to 9% in view of the judicial pronouncements including in the Jagdish
case (supra). On this aspect, once again, there was no serious dispute raised by the learned counsel for the respondent once
the claim was confined to 9% in line with the interest rates applied by this Court.

CONCLUSION

8 The result of the aforesaid is that relying on the settled principles, the calculation of compensation by the appellant, as set out
in para 5 of the synopsis, would have to be adopted as follows:

HEADS AMOUNT (INR.)

LOSS OF EARNING POWER (14648*12*18*31.1/100) 9,81,978.76
TOWARDS FUTURE PROSPECTS (50% ADDITION) 4,90,989
MEDICAL EXPENSES INCLUDING TRANSPORT CHARGES, NOURISHMENT ETC. 18,46,864
LOSS OF MATRIMONIAL ASPECTS 5,00,000
LOSS OF COMFORT, AMENITIES AND MENTAL AGONY 1,50,000
PAIN AND SUFFERING 2,00,000
TOTAL 41,69,831

The appellant would, thus, be entitled to the compensation of Rs. 41,69,831/as claimed along with simple interest at the rate
of 9% per annum from the date of application till the date of payment.

9 The appeals are, accordingly, allowed with costs throughout.

10 The balance amount be transmitted by the respondent State Corporation to the appellant within a maximum period of six
weeks from today.
 11

2020 (0) AIJEL-SC 65585

SUPREME COURT OF INDIA

(RAJASTHAN HIGH COURT)

Hon'ble Judges:Ashok Bhushan and M.R.Shah JJ.

Ramkhiladi Versus United India Insurance Company

CIVIL APPEAL No. 9393 of 2019 ; *J.Date :- JANUARY 07, 2020

MOTOR VEHICLES ACT, 1988 Section - 163A

(a) Motor Vehicles Act, 1988 - S. 163A - motor accident - principle of no fault liability - in a
claim u/s. 163A, there is no need for claimants to plead or establish negligence and/or that
death in respect of which claim petition is sought to be established was due to wrongful act,
neglect or default of the owner of vehicle concerned - claim petition u/s. 163A is based on
principle of no fault liability - however, at the same time, deceased has to be a third party and
cannot maintain a claim u/s. 163A against owner/insurer of vehicle which is borrowed by
him as he will be in the shoes of owner and he cannot maintain a claim u/s. 163A against
owner and insurer of vehicle - parties are governed by contract of insurance and under
contract of insurance liability of insurance company would be qua third party only -
deceased cannot be said to be a third party with respect to insured vehicle - in present case,
as claim u/s. 163A was made only against owner and insurance company of vehicle which
was being driven by deceased himself as borrower of vehicle from owner of vehicle and he
would be in shoes of owner - High Court rightly observed and held that such a claim was not
maintainable and claimants ought to have joined and/or ought to have made the claim u/s.
163A of the Act against driver, owner and/or insurance company of offending vehicle being
a third party to said vehicle. (Para 5.5,5.6)

(b) Motor Vehicles Act, 1988 - S. 163A - motor accident - compensation - deceased was
borrower and permissible user of motor cycle which met accident on account of rash and
negligent driving of driver of another motorcycle - no compensation claimed from owner of
offending vehicle - claim petition was preferred only against owner of motorcycle borrowed
and its insurance company - neither driver nor owner or insurance company of another
vehicle were joined as opponents in claim petition - held, as deceased has stepped into
shoes of owner of vehicle and not being third party, claim is not maintainable - provisions of
S. 163A of Act not to have any application with regard to accident wherein owner of motor
vehicle himself is involved - no error in ndings of High Court - appeal partly allowed. (Para
5.4,5.9)

Imp.Para: [ 5 ]

Cases Referred To :
 1. Jitender Trivedi V. Kasam Daud, 2015 4 SCC 237 : 2015 AIR SC(Supp) 821 : 2015 (2)
Scale 172 : JT 2015 (1) 51302 : 2015 AIR SCW 1067
2. National Insurance Co. Ltd. V. Laxmi Narain Dhut, 2007 3 SCC 700 : 2007 AIR SC 1563 :
2007 (4) Scale 36 : JT 2007 (4) 169 : 2007 (3) SCR 579
3. Naveen Kumar V. Vijay Kumar, 2018 3 SCC 1 : 2018 AIR SC 983 : 2018 (2) Scale 263 :
JT 2018 (2) 136 : 2018 (1) SCC(Cri) 661
4. New India Assurance Co. Ltd. V. Sadanand Mukhi, 2009 2 SCC 417 : 2009 AIR SC 1788 :
2009 (1) Scale 252 : JT 2008 (13) 536 : 2009 AIR SCW 1372
5. Premkumari V. Prahlad Dev, 2008 3 SCC 193 : 2008 AIR SC 1073 : 2008 (1) Scale 531 :
2008 (1) SCR 874 : 2008 AIR SCW 682
6. Reshma Kumari V. Madan Mohan, 2013 9 SCC 65 : 2013 AIR SC(Supp) 474 : 2013 (5)
Scale 160 : JT 2013 (4) 362 : 2013 (2) SCR 706

Cases Relied on :

1. National Insurance Co. Ltd. V. Ashalata Bhowmik, 2018 9 SCC 801 : 2018 AIR SC 4133 :
2018 (10) Scale 383 : JT 2018 (8) 315 : 2019 (1) SCC(Cri) 399
2. Ningamma V. United India Insurance Co. Ltd., 2009 13 SCC 710 : 2009 AIR SC 3056 :
2009 (8) Scale 244 : JT 2009 (8) 262 : 2009 AIR SCW 4916
3. Oriental Insurance Co. Ltd. V. Rajni Devi, 2008 5 SCC 736 : 2008 (6) Scale 638 : 2008 (6)
SCR 822 : 2008 (3) Supreme 201 : 2008 (3) SCC(Cri) 67

Equivalent Citation(s):
2020 (2) SCC 550 : AIR 2020 SC 527

JUDGMENT :-

M.R.Shah, J.

1 Feeling aggrieved and dissatisfied with the impugned

Judgment and Order dated
10.05.2018 passed by the High Court of
Judicature for Rajasthan at Jaipur in SBCMA No.
2614 of 2009, by
which the High Court has allowed the said appeal preferred by the
respondent-insurance company by quashing and setting aside the
Judgment and Award
passed by the learned Motor Accident Claims
Tribunal and consequently has dismissed the
claim petition
preferred by the original claimants, the original claimants have
preferred the
present appeal.

2 The facts leading to the present appeal in nutshell are as

under:

2.1 That in a vehicular accident which occurred on 02.10.2006,

one Chotelal alias
Shivram died. The deceased was travelling on
motorcycle bearing registration No. RJ
02 SA 7811. At this stage, it
is required to be noted that, even as per the claimants, the
accident
occurred on account of rash and negligent driving of the driver of
another
motorcycle bearing registration No. RJ 29 2M 9223. That
the appellants herein filed a
claim petition before the Motor
Accident Claims Tribunal, Laxmangarh (Alwar),
Rajasthan
(hereinafter referred to as the learned Tribunal) under Section 163A
of the
Motor Vehicles Act (hereinafter referred to as the Act). At this
stage, it is required to be
noted that the claim petition was preferred
only against the owner of the motorcycle
bearing registration No. RJ
02 SA 7811 and its insurance company. Neither the driver
nor the
owner or the insurance company of the vehicle bearing registration
No. RJ 29
2M 9223 were joined as opponents in the claim petition.
Therefore, as such, no claim petition was filed against the driver,
owner and the
insurance company of the vehicle involved in the
accident i.e. motorcycle bearing
registration No. RJ 29 2M 9223.
That an objection was raised by the respondent-
insurance
company-insurer of motorcycle bearing registration No. RJ 02 SA
7811 that
as according to the claimants and even so stated in the
FIR, the driver of the
motorcycle bearing registration No. RJ 29 2M
9223 was rash and negligent and the
claimants have not filed the
claim petition against the owner of the said vehicle, the
claim
petition is required to be dismissed against the insurance company
of the
motorcycle bearing registration No. RJ 02 SA 7811. The
learned Tribunal framed the
following issues:

1. Whether accident was caused on 02.10.2006 by driver

Chhotelal alias Shivram
driving Motorcycle RJ 02 SA
7811 vehicle in question in rash and negligent manner?

2. Whether the driver was driving the said vehicle being in

the employment of vehicle
owner opposite party No. 1
Bhagwan Sahay in his interest or with his
permission/knowledge?

3. Consequent to occurring death of Chhotelal alias

Shivram (driver) in the alleged
accident, how much valid
amount and in what manner, the applicants are entitled
to get
and from which opposite parties?

4. Whether the objections raised in the preliminary/specific

statements are significant,
if yes then its effect?

5. Relief?

2.2 On appreciation of evidence, the learned Tribunal answered

Issue Nos. 1 and 2 in
favour of the claimants and held that the
death of the deceased Chotelal alias Shivram
had occurred from the
motorcycle involved in the accident and the said motorcycle
was
insured with the respondent-insurance company, the insurance
company is liable
to pay the compensation under Section 163A of
the Act. Consequently, by the
Judgment and Award dated
24.02.2009, the learned Tribunal partly allowed the said
claim
petition and awarded a total sum of Rs.3,67,000/-as compensation
along with
the interest @ 6% per annum from the date of filing of
the claim petition till the date of
the actual payment

2.3 Feeling aggrieved and dissatisfied with the Judgment and

Award passed by the
learned Tribunal holding the insurance
company of the motorcycle bearing registration
No. RJ 02 SA 7811
liable to pay the compensation, the respondent-insurance
companyinsurer of motorcycle bearing registration No. RJ 02 SA 7811 preferred an
appeal before the High Court. That, by the impugned
Judgment and Order, the High
Court has allowed the said appeal
and has quashed and set aside the Judgment and
Award passed by
the learned Tribunal and consequently has dismissed the claim
petition on the ground that even as per the informant Vikram
Singh, who lodged the FIR,
the accident had occurred on account of
rash and negligent driving by the driver of
motorcycle bearing
registration No. RJ 29 2M 9223, however, the claimants have not
filed the claim petition against the owner of the said vehicle and in
fact, the claim
petition should have been filed by the claimants
against the owner of vehicle bearing
No. RJ 29 2M 9223 to seek
compensation.

2.4 Feeling aggrieved and dissatisfied with the impugned

Judgment and Order passed
by the High Court, the original
claimants have preferred the present appeal.
3 Shri Abhishek Gupta, learned advocate appearing on behalf of
the appellants-original
claimants has vehemently submitted that
the High Court has materially erred in dismissing
the claim petition
solely on the ground that the claimants have not filed the claim
petition
against the owner of the motorcycle bearing registration No.
RJ 29 2M 9223.

3.1 It is submitted by the learned advocate appearing on behalf of

the appellants-
original claimants that, as such, the High Court has
not properly appreciated the fact
that the claim petition preferred by
the original claimants was under Section 163A of
the Act and,
therefore, when the claim petition was preferred under Section
163A of the
Act, there is no need for the claimants to plead or
establish that the death in respect of
which the claim petition has
been made was due to any wrongful act or neglect or
default of
owner of vehicle concerned.

3.2 It is further submitted by the learned advocate appearing on

behalf of the
appellants-original claimants that the claim petition
filed by the original claimants was
based on the principle of no-fault
liability. It is submitted that the claimants could have
elected to
file the claim petition either under Section 166 read with Section
140 of the
Act against the owner/insurer of offending vehicle i.e. RJ
29 2M 9223 on the basis of
the fault liability or under Section 163A
either against the owner/insurer of the vehicle
being driven by the
deceased at the time of accident i.e. RJ 02 SA 7811 or against the
owner/insurer of offending vehicle i.e. RJ 29 2M 9223 on the basis
of no-fault liability.
It is submitted by the learned advocate
appearing on behalf of the appellants-original
claimants that, as
such, the deceased was not the owner of the vehicle bearing
registration No. RJ 02 SA 7811 and in fact and as observed by the
learned Tribunal, he
was in employment of owner of the vehicle No.
RJ 02 SA 7811 and therefore a third
party. It is submitted that
having elected to prefer the claim under Section 163A of the
Act on
the principle of no-fault liability against the owner/insurer of the
vehicle being
driver by the deceased at the time of the accident i.e.
RJ 02 SA 7811, the claim was
perfectly just and maintainable and
the learned Tribunal made no error in allowing the
same. In
support of the above, the learned advocate appearing on behalf of
the original
claimants has heavily relied upon the decision of this
Court in the case of Reshma
Kumari v. Madan Mohan (2013) 9
SCC 65.

3.3 Learned counsel appearing on behalf of the original claimants

has further
submitted that Section 163A of the Act has to be
interpreted in keeping with the
intention of the Legislature and the
social perspective it seeks to achieve. It is a
provision which is
beneficial in nature and it has been enacted as a measure of social
security. It is submitted that Section 163A of the Act commences
with a non-obstante
clause. Liability to pay the compensation is
on owner of the motor vehicle or the
authorized insurer . It is
submitted that the word owner has been defined under Section
2(30) to mean a person in whose name a motor vehicle stands
registered, and where
such person is a minor, the guardian of such
minor, and in relation to a motor vehicle
which is the subject of a
hire-purchase, agreement or an agreement of lease or an
agreement
of hypothecation, the person in possession of the vehicle under that
agreement. It is submitted that having regard to the said definition
of owner , this Court
in Naveen Kumar v. Vijay Kumar (2018) 3
SCC 1 has held the registered owner of the
vehicle as per the
registering authority liable in respect of the offending vehicle despite
sale/purchase of vehicle by him. It is submitted that, in paragraph
6, it is held that the
person in whose name the motor vehicle stands
registered is the owner of the vehicle
for the purpose of the Act.

3.4 It is further submitted by the learned counsel appearing on

behalf of the appellants-
original claimants that for claiming the
compensation under Section 163A of the Act,
 the claimants are only
required to prove that the death or permanent disablement is as
a
result of the accident arising out of the use of motor vehicle and it
will cover those
who are themselves driving a vehicle, the
passengers and also pedestrians. It is
submitted that in an
application under Section 163A of the Act, fault of the owner of
the
vehicle or vehicles concerned or of any other person need not be
established.

3.5 It is further submitted by the learned counsel appearing on

behalf of the appellants-
original claimants that, therefore, as the
present claim premised on the no-fault liability
under Section 163A
of the Act by the legal heirs of the deceased, the same was
maintainable against the owner and insurer of the motor vehicle
which was being
driven by him, more particularly, when the
deceased was not the owner of the vehicle
and that respondent No.
2 was the registered owner of the concerned vehicle and,
therefore,
the insurance company cannot be absolved from its liability to pay
the
compensation as awarded by the learned Tribunal.

3.6 Making the above submissions, it is prayed to allow the

present appeal and quash
and set aside the impugned Judgment
and Order passed by the High Court and to
restore the Judgment
and Award passed by the learned Tribunal holding the owner of
the
vehicle bearing registration No. RJ 02 SA 7811 and the insurer of
the said vehicle to
pay the compensation.

3.7 It is further submitted by the learned counsel appearing on

behalf of the appellants-
original claimants that, as such, the
amount of compensation awarded by the learned
Tribunal i.e.
Rs.3,67,000/- should be enhanced to Rs.5,00,000/- with interest
as
awarded by the learned Tribunal in light of the fact that the 2nd
Schedule to the Motor
Vehicle Act has been amended with effect
from 22.05.2018 and a fixed compensation
of Rs.5,00,000/- has
been specified in the case of death. It is submitted that this Court
has enhanced the compensation even in those cases wherein no
appeal for
enhancement has been preferred against the order of the
Tribunal. In support thereof,
the learned counsel appearing on
behalf of the original claimants has relied upon the
decision of this
Court in the case of Jitender Trivedi v. Kasam Daud (2015) 4
SCC 237.

4 The present appeal is vehemently opposed by Shri Amit Kumar

Singh, learned advocate
appearing on behalf of the respondentinsurance company.

4.1 It is submitted by the learned advocate appearing on behalf of

the respondent-
insurance company that, in the present case, the
deceased borrowed the motorcycle
bearing registration No. RJ 02
SA 7811 from the registered owner Bhagwan Sahay. It is
submitted
that another motorcycle bearing registration No. RJ 29 2M 9223
which was
driven in a rash and negligent manner came and hit the
motorcycle on which the
deceased was travelling. It is submitted
that the FIR was lodged against the owner of
motorcycle bearing
registration No. RJ 29 2M 9223. It is thus clear that the insured
vehicle on which the deceased was travelling i.e. RJ 02 SA 7811
was not negligent. It is
submitted that, in the present case, the
claimants of the deceased filed an application
under Section 163A
of the Act and sought compensation only from the owner of the
insured vehicle i.e. RJ 02 SA 7811. It is submitted that the
learned Tribunal without any
evidence on record has concluded
that the deceased was working under the
employment of the
registered owner. It is submitted that, therefore, in the facts and
circumstances of the case, the High Court has rightly allowed the
appeal preferred by
the insurer by observing that the claimants
ought to have filed the claim petition
against the owner of the
vehicle bearing registration No. RJ 29 2M 9223. In support of
impugned Judgment and Order passed by the High Court, learned
advocate appearing
on behalf of the insurance company has made
the following submissions:
(i) That the deceased was not a third party with respect to the
insured vehicle. He was
a third party with respect to the motorcycle
bearing registration No. RJ 29 2M 9223;

(ii) That the claimants when failed to claim the compensation

from the owner of the
motorcycle bearing registration No. RJ 29 2M
9223, cannot be permitted, as the driver
of the said motorcycle, to
claim compensation from the owner of the vehicle bearing
registration No. RJ 02 SA 7811;

(iii) That under the Motor Vehicles Act, only the third party claims
are payable;

(iv) That in the present case, the deceased was not a third party
given that he had
borrowed the vehicle from the registered owner
Shri Bhagwan Sahay Meena;

(v) That in the case of Ningamma v. United India Insurance

Co. Ltd. (2009) 13 SCC 710
and New India Assurance Co. Ltd. V.
Sadanand Mukhi (2009) 2 SCC 417, this Court has
held that the
owner of the vehicle or his legal representatives or the borrower of
the
vehicle cannot raise a claim for an accident in which there was
no negligence on the
part of the insured vehicle. It is submitted
that in the aforesaid decisions, this Court
has held that the
borrower of the vehicle steps into the shoes of the owner and,
therefore, the borrower of the vehicle or his legal representatives are
not entitled to
compensation from the insurer under the Act. It is
submitted that the deceased in the
present case has stepped into
the shoes of the owner and therefore not entitled to any
third party
compensation from the insured vehicle; and

(vi) That in the case of Dhanraj v. New India Assurance Co. Ltd.
(2004) 8 SCC 553 it is
held by this Court that an insurance policy
covers the liability incurred by the insured in
respect of death of or
bodily injury to any person (including an owner of the goods or
his
authorized representative) carried in the vehicle or damage to any
property of a
third party caused by or arising out of the use of the
vehicle. It is further held that
Section 147 does not require an
insurance company to assume risk for death or bodily
injury to the
owner of the vehicle.

4.2 It is further submitted by the learned advocate appearing on

behalf of the insurance
company that in the present case the
contract of insurance specifically provides that in
case of personal
accident the owner cum driver is only entitled to a sum of Rs.1
Lakh.
It is submitted that therefore the deceased who had stepped
into the shoes of the
owner at the most may be entitled to a sum of
Rs.1 Lakh only. It is submitted that in the
case of Oriental
Insurance Co. Ltd. V. Rajni Devi (2008) 5 SCC 736 when the
compensation is claimed for the death of the owner or another
passenger of the
vehicle, the contract of insurance being governed
by the contract qua contract, the
claim of the insurance company
would depend upon the terms thereof. It is submitted
that, in the
said decision, this Court did not accept the view taken by the
Tribunal that
while determining the amount of compensation, the
only factor which would be
relevant would be merely the use of the
motor vehicle. It is submitted that, in the
aforesaid decision, in
paragraph 11, it is further observed by this Court that the liability
under Section 163A of the Act is on the owner of the vehicle as a
person cannot be
both, a claimant as also a recipient.

4.3 Relying upon the decision of this Court, in the case of

National Insurance Co. Ltd. V.
Ashalata Bhowmik (2018) 9
SCC 801, it is submitted that the parties shall be governed
by the
terms and conditions of the contract of insurance. It is submitted
that, therefore,
at the most, the claimants may be entitled to Rs. 1
lakh only, the deceased being in the
shoes of the owner.
 4.4 Now, so far as the submission on behalf of the appellantsoriginal claimants that
there is an amendment to the 2nd Schedule,
and a fixed compensation of Rs.5 lakhs
has been specified in the
case of death and, therefore, the claimants shall be entitled to
Rs.5
lakhs, it is vehemently submitted by the learned advocate appearing
on behalf of
the insurance company that the said amendment shall
not be applicable
retrospectively. It is submitted that, in the
present case, the accident had taken place in
the year 2006 and
even the Judgment and Award was passed by the learned Tribunal
in
the year 2009, and the impugned Judgment and Order has been
passed by the High
Court on 18.02.2018, i.e. prior to the
amendment in the 2nd Schedule.

4.5 Making the above submissions, it is prayed to dismiss the

present appeal and/or
partly allow the appeal to the extent of Rs.1
Lakh as per the terms and conditions of
the contract of insurance.

5 Heard learned counsel appearing on behalf of the respective

parties at length. We have
also perused and considered the
Judgment and Award passed by the learned Tribunal as
well as the
impugned Judgment and Order passed by the High Court and the
evidence on
record. The short question which is posed for
consideration of this Court is whether, in the
facts and
circumstances of the case and in a case where the driver, owner
and the insurance
company of another vehicle involved in an
accident and whose driver was negligent are not
joined as parties to
the claim petition, meaning thereby that no claim petition is filed
against
them and the claim petition is filed only against the owner
and the insurance company of
another vehicle which was driven by
the deceased himself and the deceased being in the
shoes of the
owner of the vehicle driven by himself, whether the insurance
company of the
vehicle driven by the deceased himself would be
liable to pay the compensation under
Section 163A of the Act?;
Whether the deceased not being a third party to the vehicle No. RJ
02 SA 7811 being in the shoes of the owner can maintain the claim
under Section 163A of
the Act from the owner of the said vehicle?

5.1 The learned Tribunal held that even in absence of the driver,
owner and the
insurance company of another vehicle involved in an
accident and whose driver was
solely negligent, the application
under Section 163A of the Act would be maintainable
against the
owner and the insurance company of the vehicle which was driven
by the
deceased himself, firstly on the ground that the deceased
was in employment of the
owner of the vehicle which was driven by
him and secondly, in an application under
Section 163A of the Act,
the negligence is not required to be established and proved
and it is
enough to establish and prove that the deceased has died in a
vehicular
accident and while driving a vehicle. The High Court has
not agreed with the same and
by the impugned Judgment and
Order has held that as the claimants have not filed the
claim
petition against the owner of another vehicle whose driver was in
fact negligent,
even as per the claimants and the claim petition
should have been filed by the
claimants against the owner of
another vehicle to seek the compensation, the
application under
Section 163A of the Act against the insurance company of the
vehicle driven by the deceased himself is liable to be dismissed.

5.2 While answering the aforesaid question involved in the present

case, first of all, the
findings recorded by the learned Tribunal on
Issue No. 2 is required to be dealt with and
considered. The learned
Tribunal framed Issue No. 2 to the effect whether the
deceaseddriver was driving the vehicle-motor cycle bearing registration No.RJ 02 SA
7811 being in employment of the vehicle owner-opposite
party-Bhagwan Sahay in his
interest or with his permission/knowledge?
5.3 While answering the finding recorded by the learned Tribunal
on Issue No. 2, it
appears that, as such, the learned Tribunal has
not at all answered the aforesaid issue.
While answering Issue No.
2, there is no specific finding whether the deceased-driver
was in
employment of the opponent-owner Bhagwan Sahay or not. Even
otherwise, no
evidence is led by the claimants to prove that the
deceased-driver was in employment
of the opponent-owner
Bhagwan Sahay. Despite the above, while answering Issue No. 4
there is some observation made by the learned Tribunal that the
deceased-driver was
in employment of the opponent-owner
Bhagwan Sahay, which is not supported by any
evidence on record.
Under the circumstances, the deceased-driver cannot be said to be
in employment of the opponent-owner Bhagwan Sahay and,
therefore, he can be said to
be permissible user and/or borrower of
motor vehicle owned by the opponent-owner
Bhagwan Sahay. With
these findings, the main question posed for consideration of this
Court referred to hereinabove is required to be considered.

5.4 An identical question came to be considered by this Court in

the case of Ningamma
(supra). In that case, the deceased was
driving a motorcycle which was borrowed from
its real owner and
met with an accident by dashing against a bullock cart i.e. without
involving any other vehicle. The claim petition was filed under
Section 163A of the Act
by the legal representatives of the deceased
against the real owner of the motorcycle
which was being driven by
the deceased. To that, this Court has observed and held that
since
the deceased has stepped into the shoes of the owner of the vehicle,
Section
163A of the Act cannot apply wherein the owner of the
vehicle himself is involved.
Consequently, it was held that the legal
representatives of the deceased could not have
claimed the
compensation under Section 163A of the Act. Therefore, as such, in
the
present case, the claimants could have even claimed the
compensation and/or filed the
claim petition under Section 163A of
the Act against the driver, owner and insurance
company of the
offending vehicle i.e. motorcycle bearing registration No. RJ 29 2M
9223, being a third party with respect to the offending vehicle.
However, no claim under
Section 163A was filed against the driver,
owner and/or insurance company of the
motorcycle bearing
registration No. RJ 29 2M 9223. It is an admitted position that
the
claim under Section 163A of the Act was only against the owner
and the insurance
company of the motorcycle bearing registration
No. RJ 02 SA 7811 which was
borrowed by the deceased from the
opponent-owner Bhagwan Sahay. Therefore,
applying the law laid
down by this Court in the case of Ningamma (supra), and as the
deceased has stepped into the shoes of the owner of the vehicle
bearing registration
No. RJ 02 SA 7811, as rightly held by the High
Court, the claim petition under Section
163A of the Act against the
owner and insurance company of the vehicle bearing
registration
No. RJ 02 SA 7811 shall not be maintainable.

5.5 It is true that, in a claim under Section 163A of the Act, there
is no need for the
claimants to plead or establish the negligence
and/or that the death in respect of
which the claim petition is
sought to be established was due to wrongful act, neglect or
default
of the owner of the vehicle concerned. It is also true that the claim
petition
under Section 163A of the Act is based on the principle of
no fault liability. However, at
the same time, the deceased has to be
a third party and cannot maintain a claim under
Section 163A of
the Act against the owner/insurer of the vehicle which is borrowed
by
him as he will be in the shoes of the owner and he cannot
maintain a claim under
Section 163A of the Act against the owner
and insurer of the vehicle bearing
registration No. RJ 02 SA 7811.
In the present case, the parties are governed by the
contract of
insurance and under the contract of insurance the liability of the
insurance
company would be qua third party only. In the present
case, as observed hereinabove,
the deceased cannot be said to be a
third party with respect to the insured vehicle
bearing registration
No. RJ 02 SA 7811. There cannot be any dispute that the liability
of
the insurance company would be as per the terms and conditions
of the contract of
insurance. As held by this Court in the case of
Dhanraj (supra), an insurance policy
covers the liability incurred
by the insured in respect of death of or bodily injury to any
person
(including an owner of the goods or his authorized representative)
carried in the
vehicle or damage to any property of a third party
caused by or arising out of the use of
the vehicle. In the said
decision, it is further held by this Court that Section 147 does
not
require an insurance company to assume risk for death or bodily
injury to the owner
of the vehicle.

5.6 In view of the above and for the reasons stated above, in the
present case, as the
claim under Section 163A of the Act was made
only against the owner and insurance
company of the vehicle which
was being driven by the deceased himself as borrower of
the vehicle
from the owner of the vehicle and he would be in the shoes of the
owner,
the High Court has rightly observed and held that such a
claim was not maintainable
and the claimants ought to have joined
and/or ought to have made the claim under
Section 163A of the Act
against the driver, owner and/or the insurance company of the
offending vehicle i.e. RJ 29 2M 9223 being a third party to the said
vehicle.

5.7 Now, so far as the reliance placed upon by the learned

Advocate for the claimants
on the decision of this Court in the case
of Naveen Kumar (supra), on considering the
issue involved in that
decision, we are of the opinion that the said decision shall not be
applicable to the facts of the case on hand and/or the same shall
not be of any
assistance to the claimants. In that case, the issue
was as to who could be said to be
the registered owner of the vehicle
and the liability of the owner who sold the vehicle,
but his name
continued to be as the owner with the registering authority. To
that, it was
held that the person in whose name the motor vehicle
stands registered is the owner of
the vehicle for the purpose of the
Act.

5.8 However, at the same time, even as per the contract of

insurance, in case of
personal accident the owner-driver is entitled
to a sum of Rs.1 lakh. Therefore, the
deceased, as observed
hereinabove, who would be in the shoes of the owner shall be
entitled to a sum of Rs.1 lakh, even as per the contract of
insurance. However, it is the
case on behalf of the original
claimants that there is an amendment to the 2nd
Schedule and a
fixed amount of Rs.5 lakh has been specified in case of death and
therefore the claimants shall be entitled to Rs.5 lakh. The same
cannot be accepted. In
the present case, the accident took place in
the year 2006 and even the Judgment and
Award was passed by
the learned Tribunal in the year 2009, and the impugned
Judgment
and Order has been passed by the High Court in 10.05.2018, i.e.
much prior
to the amendment in the 2nd Schedule. In the facts
and circumstance of the present
case, the claimants shall not be
entitled to the benefit of the amendment to the 2nd
Schedule. At
the same time, as observed hereinabove, the claimants shall be
entitled to
Rs.1 lakh as per the terms of the contract of insurance,
the driver being in the shoes of
the owner of the vehicle.

5.9 Now, so far as the submission made on behalf of the claimants

that in a claim
under Section 163A of the Act mere use of the
vehicle is enough and despite the
compensation claimed by the
heirs of the owner of the motorcycle which was involved
in the
accident resulting in his death, the claim under Section 163A of the
Act would be
maintainable is concerned, in view of the decision of
this Court in Rajni Devi (supra),
the aforesaid cannot be accepted.
In Rajni Devi (supra), it has been specifically
observed and held
that the provisions of Section 163A of the Act cannot be said to
have any application with regard to an accident wherein the owner
of the motor vehicle
 himself is involved. After considering the
decisions of this Court in the cases of
Oriental Insurance Co. Ltd.
V. Jhuma Saha (2007) 9 SCC 263; Dhanraj (supra); National
Insurance Co. Ltd. V. Laxmi Narain Dhut (2007) 3 SCC 700 and
Premkumari v. Prahlad
Dev (2008) 3 SCC 193, it is ultimately
concluded by this Court that the liability under
Section 163A of the
Act is on the owner of the vehicle as a person cannot be both, a
claimant as also a recipient and, therefore, the heirs of the owner
could not have
maintained the claim in terms of Section 163A of the
Act. It is further observed that, for
the said purpose, only the terms
of the contract of insurance could be taken recourse
to. In the
recent decision of this Court in the case of Ashalata Bhowmik
(supra), it is
specifically held by this Court that the parties shall be
governed by the terms and
conditions of the contract of insurance.
Therefore, as per the contract of insurance, the
insurance company
shall be liable to pay the compensation to a third party and not to
the owner, except to the extent of Rs.1 lakh as observed
hereinabove.

6 In view of the above and for the reasons stated above, the
present appeal is partly allowed
to the aforesaid extent and it is
observed and held that the original claimants shall be
entitled to a
sum of Rs.1 lakh only with interest @ 7.5 per cent per annum from
the date of
the claim petition till realization. In the facts and
circumstance of the present case, there
shall be no order as to costs.
 12

2019 (0) AIJEL-SC 65433

SUPREME COURT OF INDIA

(BOMBAY HIGH COURT)

Hon'ble Judges:Ashok Bhushan and M.R.Shah JJ.

Jabbar Versus Maharshtra State Road Transport Corporation

CIVIL APPEAL No. 8556 of 2019 ; *J.Date :- NOVEMBER 13, 2019

MOTOR VEHICLES ACT, 1988 Section - 166

CONSTITUTION OF INDIA Article - 142

(a) Motor Vehicles Act, 1988 - S. 166 - Constitution of India - Art. 142 - motor accident - amputation of right hand -
appeal for enhancement of compensation - held, it is permissible to grant compensation of any amount in excess to
that one which has been claimed - Court in exercise of jurisdiction under Article 142 of Constitution awarded just
and reasonable compensation. (Para 10)

(b) Motor Vehicles Act, 1988 - S. 166 - Constitution of India - Art. 142 - bus accident - appellant a fruit seller on a
hand-cart - amputation of right hand - in claim petition, although claimant has computed compensation to Rs.
9,05,000 on different heads but he con ned his claim to Rs. 3 lacs due to reason he was unable to deposit court fee
on Rs. 9,05,000 - held, amputation of right hand has caused great loss of future income - there is one more reason
due to which limiting of claim of appellant to Rs. 3 lacs cannot come into way in awarding higher compensation -
further, appellant has expressly stated that if it is entitled to get more than Rs. 3 lacs claimant is ready to deposit
de cient court fee - this clearly means that neither Tribunal nor High Court was precluded from awarding higher
than Rs. 3 lacs - hence, grant an amount of Rs. 5 lacs as compensation to appellant shall be just and reasonable -
appeal allowed. (Para 8,13,14,15)

Imp.Para: [ 8 ] [ 10 ] [ 13 ] [ 14 ] [ 15 ]

Cases Relied on :

1. Ramla & Ors. V. National Insurance Company Limited & Ors., 2019 2 SCC 192 : 2019 AIR SC 404 : 2018 (15)
Scale 360 : JT 2018 (11) 507 : 2019 (1) SCC(Cri) 510

Equivalent Citation(s):
2020 (1) ApexCJ(SC) 161 : 2020 (1) RCR(Civ) 308

JUDGMENT :-

1 Leave granted.

2 This appeal has been led against the judgment and order dated 06.07.2017 passed by the High Court. By which
judgment, the High Court enhanced the compensation granted to the appellant from Rs.1.50 lac to Rs.2.50 lac.

3 The appellant was a fruit seller whose right hand was amputated after the accident. In the claim petition, the
claimant, at page 24 in para 4, has claimed that he is entitled for compensation of Rs.9,05,000/- from the
respondents jointly and severally and the claimant is suffering from nancial crisis, therefore, he is unable to pay
court fees on the said amount.

4 Therefore, he had restricted his claim to the tune of Rs.3,00,000/-. The Tribunal accepted the case setup by the
appellant and allowed the claim to Rs.1.50 lacs. Aggrieved by the said order, the appeal was led in the High Court.
The High Court found substance in the appeal and allowed the appeal by enhancing compensation from Rs.1.50
lacs to Rs.2.50 lacs. The High Court has observed that the said amount shall be just and fair compensation payable
to the appellant for the injuries suffered.
5 Learned counsel for the appellant submits that the mere fact
that the appellant has confined his claim to Rs.3
lacs cannot be a
factor in appellant being not granted the fair and reasonable
compensation for injuries suffered by
him. The High Court having
noticed that the appellant was carrying business of fruits on a
hand-cart, the
amputation of right hand has made the business of
the appellant non-functional. The amount of Rs.2.5 lacs
awarded by
the High Court is neither fair nor just compensation. It is
further submitted by learned counsel for the
appellant that this
Court in exercise of its jurisdiction under Article 142 of the
Constitution can award just and
reasonable compensation to the
appellant.

6 Learned counsel for the respondent submits that the appellant

having confined his claim to Rs.3 lacs before the
High Court cannot
be allowed to contend that he is entitled for any higher compensation.

7 We have considered submission of learned counsel for the

parties and perused the record.

8 There is no dispute between the parties that in the bus

accident, right hand of the appellant was crushed which
had to be
amputated. The appellant was carrying on the business of selling
fruits on a hand-cart which fact has
also been noticed by the High
Court. In para 4 of the claim petition, although the claimant has
computed the
compensation to Rs.9,05,000/- on different heads but
he confined his claim to Rs.3 lacs due to the reason he was
unable
to deposit the court fee on Rs.9,05,000/-.

Para 4 of the claim petition reads as follows:

That due to the amputation of right hand the

claimant has became permanently disabled person, he has
lost
his earning capacity. The claimant is unable to do
any type of work and is leading a pity miserable life and
therefore, the claimant is claiming compensation under
following heads.

A. Loss of future income 100-25 RS.8,10,000-00

(For personal expenses) 75 X 30 X 12 X 30
B. Expenses towards medicines, RS.20,000-00
attendant for travelling
C. Compensation for unbearable pain and agony. Rs.25,000-00
D. Loss of pleasure and personality. Rs.50,000-00
Total RS. 9,05,000-00

9 Thus, the claimant is entitled for compensation of

Rs.9,05,00/- from the respondents jointly and severally
because
the claimant has sustained the above loss,
expenses because of the accident. However, the claimant
is suffering
from financial crises therefore, he is
unable to deposit the court fees upon the said amount
therefore, he has
restricted his claim to the tune of
Rs.3,00,000/- and upon which court fees stamp of
Rs.2,372-50 ps. is paid
herewith which is sufficient. If
this Hon ble Court comes to the conclusion the claimant
is entitled to get more than
Rs.3,00,000/- towards
compensation in that eventuality, the claimant is ready
to deposit deficit court fees.

10 This Court in large number of cases has laid down that it is

permissible to grant compensation of any amount in
excess to that
one which has been claimed. This Court in exercise of jurisdiction
under Article 142 of the
Constitution has awarded just and
reasonable compensation.

11 It is sufficient to refer a recent judgment in Ramla & Ors. v.

National Insurance Company Limited & Ors. [(2019) 2
SCC 192], where
this Court in para 5 has laid down:

Though the claimants had claimed a total compensation of

Rs.25,00,000/- in their claim petition filed before
the
Tribunal, we feel that the compensation which the
claimants are entitled to is higher than the same as
mentioned supra. There is no restriction that the Court
cannot award compensation exceeding the claimed
amount,
since the function of the Tribunal or court under Section
168 of the Motor Vehicles Act, 1988 is to
award just
compensation . The Motor Vehicles Act is a beneficial
and welfare legislation. A just compensation
is one
which is reasonable on the basis of evidence produced on
record. It cannot be said to have become
time barred.
Further, there is no need for a new cause of action to
claim an enhanced amount. The courts are
duty bound to
award just compensation.

12 Looking to the facts that the appellant who was fruit seller
on a hand-cart, his right hand having amputated,
injury has caused
him permanent disability substantially affecting his business. The
award of Rs.2.5 lacs cannot be
held to be a just and reasonable
compensation. The appellant in his computation has claimed
Rs.8,10,000/-
towards loss of future income.

13 We have no doubt that the amputation of right hand has caused

great loss of future income. There is one more
reason due to which
the limiting of claim of the appellant to Rs.3 lacs cannot come
into way in awarding higher
compensation. In the last line of para
4 of the claim petition, the appellant has stated:
 If this Hon ble Court comes to the conclusion the
claimant is entitled to get more than Rs.3,00,000/-
towards
compensation in that eventuality, the claimant is
ready to deposit deficit court fees.

14 The appellant has expressly stated that if it is entitled to

get more than Rs.3 lacs the claimant is ready to deposit
deficient
court fee. This clearly means that neither the Tribunal nor the
High Court was precluded from awarding
higher than Rs.3 lacs.

15 After taking into consideration the entire facts and

circumstances of the present case, we are of the view that to
grant
an amount of Rs.5 lacs as compensation to the appellant shall be
just and reasonable. We, thus, allow the
appeal and enhance the
compensation amount to Rs.5 lacs. The compensation amount shall
also bear 9% interest
per annum from the date of claim petition.
 13

2018 (0) AIJEL-SC 62739

SUPREME COURT OF INDIA

Hon'ble Judges:R.F.Nariman and Indu Malhotra JJ.

Magma General Insurance Company Limited Versus Nanu Ram Alias Chuhru Ram

Civil Appeal No. 9581 of 2018 ;

Special Leave Petition (Civil) No. 3192 of 2018 ; *J.Date :- SEPTEMBER 18, 2018

MOTOR VEHICLES ACT, 1988 Section - 166

(a) Motor Vehicles Act, 1988 - S. 166 - motor accident - compensation - future prospects - in
case deceased was self employed or on a xed salary, and was below 40 years of age, an
addition of 40% of established income should be granted towards future prospects - future
Prospects are to be awarded on the basis of : (i) nature of deceased's employment; and (ii)
age of deceased - in present case, it is claimed by family of deceased that he was engaged
in making namkeen, and was earning a monthly income of about Rs. 15,000 per month -
however, no evidence was brought on record to establish the same - MACT as well as High
Court assessed income of deceased on the basis of minimum wage of an unskilled worker -
nature of his employment being taken as a self employed person - deceased was 24 years
old at the time of the accident - hence, future prospects ought to have been awarded at 40%
of actual income of deceased, instead of 50% as awarded by High Court - judgment of High
Court is modi ed to that extent. (Para 8.1)

(b) Motor Vehicles Act, 1988 - S. 166 - motor accident - compensation - deduction -
Insurance Company contended that deduction ought to have been, and not 1/3rd, since
deceased was a bachelor - where family of the bachelor is large and dependent on the
income of deceased, as in a case where he has a widowed mother and large number of
younger non-earning sisters or brothers, his personal and living expenses may be restricted
to one-third, as contribution to the family will be taken as two-third - considering that
deceased was living in a village, where he was residing with his aged father who was about
65 years old, and respondent No. 2 an unmarried sister, High Court correctly considered
them to be dependents of deceased, and made a deduction of 1/3rd towards personal
expenses of deceased - therefore, judgment of High Court is a rmed on this count. (Para
8.2)

(c) Motor Vehicles Act, 1988 - S. 166 - dependents - plea of Insurance Company that father
and sister of deceased could not be treated as dependents, and it is only a mother who can
be dependent of her son - held, not acceptable - deceased was a bachelor, whose mother
had predeceased him - deceased's father was about 65 years old, and an unmarried sister -
deceased was contributing a part of his meager income to the family or their sustenance
and survival - hence, they would been titled to compensation as his dependents. (Para 8.4)
(d) Motor Vehicles Act, 1988 - S. 166 - motor accident - determination of compensation -
Insurance Company contended that High Court wrongly awarded Rs. 1,00,000 towards loss
of love and affection, and Rs. 25,000 towards funeral expenses - held, relying on judgment of
Pranay Sethi (supra), compensation of Rs. 25,000 towards funeral expenses is decreased to
Rs. 15,000 - MACT as well as High Court have not awarded any compensation with respect
to loss of consortium and loss of estate, which are other conventional heads under which
compensation is awarded in the event of death, as recognized by Constitution Bench in
Pranay Sethi (supra) - Motor Vehicles Act is a beneficial and welfare legislation - Court is
duty bound and entitled to award "just compensation", irrespective of whether any plea in
that behalf was raised by claimant - in exercise of our power under Article 142, and in the
interests of justice, an amount of Rs. 15,000 awarded towards loss of estate to respondent
Nos. 1 and 2. (Para 8.5,8.6)

(e) Motor Vehicles Act, 1988 - S. 166 - motor accident - compensation - loss of consortium -
in legal parlance, "consortium" is a compendious term which encompasses spousal
consortium, parental consortium, and filial consortium - right to consortium would include
the company, care, help, comfort, guidance, solace and affection of deceased, which is a
loss to his family - consortium is a special prism reflecting changing norms about the status
and worth of actual relationships - Motor Vehicles Act is a beneficial legislation aimed at
providing relief to the victims or their families, in cases of genuine claims - amount of
compensation to be awarded as consortium will be governed by principles of awarding
compensation under Loss of Consortium as laid down in Pranay Sethi (supra) - in present
case, it is appropriate to award father and sister of deceased, an amount of Rs. 40,000 each
for loss of Filial Consortium - thus, respondent Nos. 1 and 2 are entitled to total
compensation awarded of Rs. Rs. 14,25,600 along with interest @ 12% p.a. from the date of
filing of claim petition till payment - Insurance Company and Respondent No. 3 are held
jointly and severally liable to pay compensation awarded. (Para 8.7)

Imp.Para: [ 8 ]

Cases Referred To :

1. Jagmala Ram @ Jagmal Singh V. Sohi Ram, 2017 4 RLW 3368

2. Lakshman V. Susheela Chand Choudhary, 1996 3 KantLJ 570
3. Smt. Rita Rana V. Pradeep Kumar, 2014 3 UC 1687

Cases Relied on :

1. National Insurance Co. Ltd. V. Pranay Sethi, 2017 16 SCC 680 : 2017 AIR SC 5157 :
2017 (13) Scale 12 : JT 2017 (10) 450 : 2017 (8) Supreme 107

Cited in :

1. (Relied on) :- Joginder Singh Vs. Icici Lombard General Insurance Company, AIR 2019
SC 3814 : 2019 (10) Scale 746 : JT 2019 (8) SC 112 : 2019 JX(SC) 912 : 2019 AIJEL_SC
64609
2. (Relied on) :- Ramla Vs. National Insurance Company Limited, 2019 (2) SCC 192 : AIR
2019 SC 404 : 2018 (15) Scale 360 : JT 2018 (11) SC 507 : 2019 (1) SCC(Cri) 510 :
2019 (197) AIC 199 : 2019 (1) ApexCJ(SC) 551 : 2019 (1) RCR(Civ) 203 : 2019 (1) AWC
59 : 2019 (73) OrissaCriR 294 : 2018 (4) LawHerald(SC) 3105 : 2018 (4) LawHerald(SC)
3476 : 2018 DNJ(SC) 1420 : 2019 (1) BLJud(SC) 154 : 2019 (1) RajLW 842 : 2019 (1)
 ALD(SC) 191 : 2018 (6) WBLR 715 : 2019 (1) SCC(Civ) 548 : 2019 (127) CutLT(SC) 968 :
2019 AllSCR 190 : 2019 (1) ACC 346 : 2019 ACJ 559 : 2019 (1) AndhWR 40 : 2019 (1)
TAC 1 : 2019 (1) UAD 307 : 2018 (2) TNMAC 721 : 2018 (4) HLT 334 : 2018 JX(SC) 854 :
2018 AIJEL_SC 63088

Equivalent Citation(s):
2018 (18) SCC 130 : 2018 (11) Scale 247

JUDGMENT :-

INDU MALHOTRA, J.

1 Leave granted.

1.1. This Special Leave Petition has been filed by the Insurance Company to challenge
the compensation awarded on certain counts by the Punjab & Haryana High Court in
FAO No. 6943 of 2015 dated 27.09.2017, to be contrary to the Constitution Bench
judgment in National Insurance Co. Ltd. v. Pranay Sethi [JT 2017 (10) SC 450].

2 The factual matrix of the present case, briefly stated, are as under:

2.1. On 01.12.2013, the deceased was riding his motorcycle (Registration No. HR-71B-
7681) from Ambli Village to Arjun Majra Village. A relative of the deceased Mr. Rakesh
Kumar was following him on a separate motorcycle on the Sadhaura Naraingarh Road.
A Renault car bearing Registration No. HR-02-AB-4646 driven by Respondent No.3,
came from the side, and hit the motorcycle driven by the deceased. The accident was
witnessed by Mr. Rakesh Kumar.

2.2. As a result of the accident, the deceased fell and sustained multiple injuries. He
was taken to the Government Hospital, Naraingarh from where he was referred to PGI,
Chandigarh. On 02.12.2013 the victim was taken to Government Hospital, Panchkula
where the doctors declared him dead.

2.3. On the same day, F.I.R. No. 337 was registered at Police Station, Naraingarh on the
statement of Mr. Rakesh Kumar who was an eye-witness to the accident.

3 The father, brother, and sister of the deceased filed Claim Petition under Section 166 of the
Motor Vehicles Act, 1988 before the Motor Accidents Claim Tribunal, Yamuna Nagar (
hereinafter referred to as MACT ) praying for compensation of Rs. 50,00,000 along with
Interest from the date of the accident till the date of realization.

3.1. Mr. Rakesh Kumar, the eye-witness was examined before the MACT. He deposed
stated that the accident occurred due to the rash and negligent driving of Respondent
No. 3.

3.2. The MACT after considering the evidence placed on record, came to the finding
that the accident took place due to the rash and negligent driving of Respondent No. 3.

3.3. The deceased was 24 years old, and was engaged in the business of
manufacturing Namkeen products. The Claimants contended that the income of the
deceased was Rs. 15,000 per month. However, they were unable to produce evidence
of the income of the deceased. The MACT took the income of the deceased to be that
of an unskilled worker i.e. Rs. 5,342 per month on the basis of the Notification dated
 13.08.2013 issued by the Labour Commissioner, Haryana prescribing minimum wages
for different categories of work.

3.4. The MACT awarded compensation to the family of the deceased as follows:

Head Compensation awarded

i. Income: Rs. 5,432 per month
ii. Deduction towards Rs. 1780 (1/3rd of income)
personal expenses:
iii. Multiplier: 7 (as per the age of the father)
iv. Loss of future Rs. 2,99,208 [i.e. (5432 1780) x 12x7]
income :
v. Loss of love and Rs. 25,000
affection:
vi. Funeral Expenses: Rs. 15,000
Total Compensation Rs.  3,39,208 with interest @ 7% from
awarded: the date of the claim until realization
and costs.

3.5. The MACT did not award any compensation to the brother of the deceased, as he
could not be considered to be a dependent. Compensation was awarded to the aged
father and the unmarried sister of the deceased, who were held to be dependents.

3.6. The Insurance Company and the driver of the vehicle Respondent No. 3 both were
held to be jointly and severally liable to pay the compensation.

4 The Respondent Nos. 1 and 2 i.e. the father and sister of the deceased filed an Appeal
against the order of the MACT before the Punjab and Haryana High Court praying for
enhancement of compensation.

4.1. The High Court held that the facts relating to the accident were admitted and
proved before the MACT. It was established that the deceased had died as a result of
the rash and negligent driving of Respondent No. 3.

4.2. The High Court found that the MACT had used the wrong principle for application
of the multiplier. The multiplier ought to have been taken on the basis of the age of the
deceased, and not of his father.

4.3. The High Court re-assessed the compensation as follows:

Head Compensation awarded

i. Income (as per minimum wages): Rs. 6,000 per month
ii. Future prospects at 50% of (i): Rs. 3,000 per month
iii. Total Income: Rs. 9,000
iv. Deduction of personal expenses: Rs.  3,000 (i.e. 1/3rd of
total income)
v. Multiplier: 18 (as per age of
deceased)
vi. Loss of future income: Rs.  12,96,000 [i.e. (9,000
3,000) x 12 x 18]
vii. Loss of love and affection: Rs.  1,00,000
(i.e. Rs. 50,000 each)
viii. Funeral expenses: Rs. 25,000
T lC i d d R 14 21 000 i h i
 Total Compensation awarded: Rs. 14,21,000 with interest
@ 9% from the date of
filing the claim petition till
realization.

4.4. The amount was held to be payable jointly and severally by the Appellant Insurance
Company and Respondent No. 3.

5 Aggrieved by the Order of the High Court, the Insurance Company filed the present S.L.P.
before this Court, praying for setting-aside the judgment of the Punjab and Haryana High
Court.

6 We have heard learned Counsel for the parties, and perused the record.

6.1. The principal grounds on which the S.L.P. has been filed by the Insurance Company
are:

i. The High Court has erroneously awarded 50% towards Future Prospects, even though
as per the judgment of this Court in National Insurance Co. Ltd. v. Pranay Sethi [2017
(16) SCC 680]. only 40% could have been awarded.

ii. The deduction of the income of the deceased ought to have been made at 1/2, and
not at 1/3rd, as he was a bachelor.

iii. The minimum wages of the deceased ought to have been taken at Rs. 5,341 and not
Rs. 6,000 as that was the prevailing rate of minimum wages in Haryana at the time of
the accident.

iv. The father and sister of the deceased could not be considered as dependants, and
were not entitled to compensation. In the case of death of a bachelor, only the mother
could be considered to be a dependant.

v. The grant of Rs. 1,00,000 on account of loss of love and affection, and Rs. 25,000
towards funeral expenses is erroneous.

6.2. It was contended that only Rs. 30,000 could have been awarded as per the
judgment in Pranay Sethi (supra).

7 The dependents of the deceased refuted the grounds raised by the Insurance company,
and reiterated their claim for enhanced compensation.

8 The grounds of challenge by the Insurance Company are dealt with seriatim.

8.1. With respect to the issue of Future Prospects, a Constitution Bench of this Court in
Pranay Sethi (supra) has held that in case the deceased was self -employed or on a
fixed salary, and was below 40 years of age, an addition of 40% of the established
income should be granted towards Future Prospects.

8.1.1. Future Prospects are to be awarded on the basis of:

i. the nature of the deceased s employment; and

ii. the age of the deceased.

8.1.2. In the present case, it is claimed by the family of the deceased that he was
engaged in making namkeen, and was earning a monthly income of about Rs. 15,000
per month. However, no evidence was brought on record to establish the same. The
MACT as well as the High Court assessed the income of the deceased on the basis of
the minimum wage of an unskilled worker. The nature of his employment being taken
as a self-employed person.

8.1.3. The deceased was 24 years old at the time of the accident. Hence, future
Prospects ought to have been awarded at 40% of the actual income of the deceased,
instead of 50% as awarded by the High Court.

8.1.4. Hence, the judgment of the High Court on this issue is modified to that extent.

8.2. With respect to the issue of deduction from the income of the deceased, the
Insurance Company contended that the deduction ought to have been 1/2, and not
1/3rd, since the deceased was a bachelor.

8.2.1. This issue has been dealt with in paragraph 32 of the judgment in Sarla Verma
(supra) wherein this Court took the view that where the family of the bachelor is large
and dependent on the income of the deceased, as in a case where he has a widowed
mother and large number of younger non-earning sisters or brothers, his personal and
living expenses may be restricted to one-third, as contribution to the family will be
taken as two-third.

8.2.2. Considering that the deceased was living in a village, where he was residing with
his aged father who was about 65 years old, and Respondent No. 2 an unmarried sister,
the High Court correctly considered them to be dependents of the deceased, and made
a deduction of 1/3rd towards personal expenses of the deceased.

8.2.3. The judgment of the High Court is, therefore, affirmed on this count.

8.3. With respect to the income of the deceased, as the family could not produce any
evidence to show that the income of the deceased was Rs. 15,000 per month, as
claimed, the High Court took his income to be Rs. 6,000, which is marginally above the
minimum wage of an unskilled worker at Rs. 5,342.

8.3.1. This finding is also not being interfered with.

8.4. The Insurance Company has submitted that the father and the sister of the
deceased could not be treated as dependents, and it is only a mother who can be
dependent of her son. This contention deserves to be repelled. The deceased was a
bachelor, whose mother had pre-deceased him. The deceased s father was about 65
years old, and an unmarried sister. The deceased was contributing a part of his meagre
income to the family for their sustenance and survival. Hence, they would be entitled to
compensation as his dependents.

8.5. The Insurance Company has contended that the High Court had wrongly awarded
Rs. 1,00,000 towards loss of love and affection, and Rs. 25,000 towards funeral
expenses.

8.5.1. The judgment of this Court in Pranay Sethi (supra) has set out the various
amounts to be awarded as compensation under the conventional heads in case of
death. The relevant extract of the judgment is reproduced herein below:
 Therefore, we think it seemly to fix reasonable sums. It seems to us that reasonable
figures on conventional heads, namely, loss of estate, loss of consortium and funeral
expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively. The
principle of revisiting the said heads is an acceptable principle. But the revisit should
not be fact-centric or quantum-centric. We think that it would be condign that the
amount that we have quantified should be enhanced on percentage basis in every three
years and the enhancement should be at the rate of 10% in a span of three years.

(Emphasis supplied)

8.5.2. As per the afore-said judgment, the compensation of Rs. 25,000 towards funeral
expenses is decreased to Rs.15,000.

8.5.3. The amount awarded by the High Court towards loss of love and affection is,
however, maintained.

8.6. The MACT as well as the High Court have not awarded any compensation with
respect to Loss of Consortium and Loss of Estate, which are the other conventional
heads under which compensation is awarded in the event of death, as recognized by
the Constitution Bench in Pranay Sethi (supra).

8.6.1. The Motor Vehicles Act is a beneficial and welfare legislation. The Court is duty
bound and entitled to award just compensation , irrespective of whether any plea in
that behalf was raised by the Claimant.

8.6.2. In exercise of our power under Article 142, and in the interests of justice, we
deem it appropriate to award an amount of Rs. 15,000 towards Loss of Estate to
Respondent Nos. 1 and 2.

8.7. A Constitution Bench of this Court in Pranay Sethi (supra) dealt with the various
heads under which compensation is to be awarded in a death case. One of these heads
is Loss of Consortium.

8.7.1. In legal parlance, consortium is a compendious term which encompasses

spousal consortium , parental consortium , and filial consortium .

8.7.2. The right to consortium would include the company, care, help, comfort,
guidance, solace and affection of the deceased, which is a loss to his family. With
respect to a spouse, it would include sexual relations with the deceased spouse
(Rajesh and Ors. v. Rajbir Singh and Ors. [JT 2013 (8) SC 288]).

8.7.3. Spousal consortium is generally defined as rights pertaining to the relationship

of a husband-wife which allows compensation to the surviving spouse for loss of
company, society, cooperation, affection, and aid of the other in every conjugal
relation1.

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

8.7.5. Filial consortium is the right of the parents to compensation in the case of an
accidental death of a child. An accident leading to the death of a child causes great
shock and agony to the parents and family of the deceased. The greatest agony for a
parent is to lose their child during their lifetime. Children are valued for their love,
affection, companionship and their role in the family unit.
 8.7.6. Consortium is a special prism reflecting changing norms about the status and
worth of actual relationships. Modern jurisdictions world-over have recognized that the
value of a child s consortium far exceeds the economic value of the compensation
awarded in the case of the death of a child. Most jurisdictions therefore permit parents
to be awarded compensation under loss of consortium on the death of a child. The
amount awarded to the parents is a compensation for loss of the love, affection, care
and companionship of the deceased child.

8.7.7. The Motor Vehicles Act is a beneficial legislation aimed at providing relief to the
victims or their families, in cases of genuine claims. In case where a parent has lost
their minor child, or unmarried son or daughter, the parents are entitled to be awarded
loss of consortium under the head of Filial Consortium.

8.7.8. Parental Consortium is awarded to children who lose their parents in motor
vehicle accidents under the Act.

8.7.9. A few High Courts have awarded compensation on this count (Rajasthan High
Court in Jagmala Ram @ Jagmal Singh & Ors. v. Sohi Ram & Ors. [2017 (4) RLW 3368
(Raj)]; Uttarakhand High Court in Smt. Rita Rana & Anr. v. Pradeep Kumar & 6 Ors. [2014
(3) UC 1687]; Karnataka High Court in Lakshman and Ors. v. Susheela Chand
Choudhary & Ors. [1996 (3) Kant LJ 570 (DB)]). However, there was no clarity with
respect to the principles on which compensation could be awarded on loss of Filial
Consortium.

8.7.10. The amount of compensation to be awarded as consortium will be governed by

the principles of awarding compensation under Loss of Consortium as laid down in
Pranay Sethi (supra).

8.7.11. In the present case, we deem it appropriate to award the father and the sister of
the deceased, an amount of Rs. 40,000 each for loss of Filial Consortium.

9 In light of the above mentioned discussion, Respondent Nos. 1 and 2 are entitled to the
following amounts:

Head Compensation awarded

i. Income: Rs. 6,000
ii. Future Prospects: Rs. 2,400 (i.e. 40% of the income)
iii. Deduction towards Rs.  2,800 [i.e. 1/3rd of (  Rs.  6,000
personal expenditure: + Rs. 2,400)
iv. Total Income: Rs.  5,600 [i.e. 2/3rd of (  Rs.  6,000
+ Rs. 2,400]
v. Multiplier: 18
vi. Loss of future income: Rs. 12,09,600 ( Rs. 5,600 x 12 x 18)
vii. Loss of love and Rs. 1,00,000 ( Rs. 50,000 each)
affection:
viii. Funeral expenses: Rs. 15,000
ix. Loss of estate: Rs. 15,000
x. Loss of Filial Rs.  80,000 (  Rs.  40,000 payable to
Consortium: each of Respondent Nos.1 and 2)
Total compensation Rs.  14,25,600 alongwith Interest @
awarded: 12% p.a. from the date of filing of the
Claim petition till payment.
 9.1. Out of the amount awarded, Respondent No.1 is entitled to 60% while Respondent
No.2 shall be granted 40% alongwith Interest as specified above.

10 The Insurance Company and Respondent No. 3 are held jointly and severally liable to pay
the compensation awarded.

10.1. The Appellant Insurance Company will pay the full amount of compensation
awarded hereinabove to Respondent Nos. 1 and 2 and can recover 50% of the amount
from Respondent No. 3.

11 The appeal is disposed of in the above terms.

 14

2021 (0) AIJEL-SC 67798

SUPREME COURT OF INDIA

Hon'ble Judges:R.Subhash Reddy and Hrishikesh Roy JJ.

Chandra @ Chanda @ Chandraram Versus Mukesh Kumar Yadav

CIVIL APPEAL No. 6152 of 2021 ; *J.Date :- OCTOBER 01, 2021

MOTOR VEHICLES ACT, 1988 Section - 166

Cases Referred To :

1. Kirti & Anr. V. Oriental Insurance Company Limited, 2021 2 SCC 166 : 2021 AIR SC 353 :
2021 (1) Scale 290 : JT 2021 (1) 74 : 2021 (1) Supreme 35
2. Magma General Insurance Company Limited V. Nanu Ram @ Chuhru Ram & Ors., 2018
18 SCC 130 : 2018 (11) Scale 247 : JT 2018 (9) 195 : 2019 (1) Supreme 262 : 2019 (3)
SCC(Cri) 153
3. Minu Rout & Anr. V. Satya Pradyumna Mohapatra & Ors., 2013 10 SCC 695 : 2013 AIR
SC(Supp) 62 : 2013 (11) Scale 112 : JT 2013 (12) 254 : 2013 (10) SCR 847
4. Sarla Verma (Smt). & Ors. V. Delhi Transport Corporation & Anr., 2009 6 SCC 121 : 2009
AIR SC 3104 : 2009 (6) Scale 129 : JT 2009 (6) 495 : 2009 (5) SCR 1098

Equivalent Citation(s):
2021 JX(SC) 593 : 2021 AIJEL_SC 67798

JUDGMENT :-

R.Subhash Reddy, J.

1 Leave granted.

2 Unfortunate parents who lost their son aged about 32 years in the motor vehicle road
accident on 27.02.2016, are before this Court claiming enhancement of compensation
arising out of an application led under Section 166 of the Motor Vehicles Act, 1988 .

3 The appellants are the parents; 4th respondent is the wife; 5th respondent is the minor
son; 6th respondent is the brother; and 7th respondent is the sister of the deceased Shivpal.
The appellants and respondent nos.4 to 7 were the applicants in the application led under
Section 166 of the Motor Vehicles Act, 1988 before the Motor Vehicle Accident Claims
Tribunal, Ajmer, Rajasthan (for short, the Tribunal ) claiming compensation of
Rs.93,08,000/with interest @ 15% p.a. The Tribunal by judgment dated 25.11.2017 has
awarded the total compensation of Rs.10,99,700/with interest @ 6% p.a. The
appellantparents
alone have filed appeal before the High Court. The
High Court by impugned
judgment dated 06.07.2018 dismissed the
appeal. As such the appellants are before this
Court.

4 The deceased Shivpal was employed as driver on the vehicle,

i.e., truck trailer bearing
No.RJ06GA6576.
When he was driving
the vehicle on 27.02.2016, within the limits of Adarsh
Nagar Police
Station, Ajmer, the vehicle truck trailer bearing
no.RJ14GD1156,
driven by the
1st respondent; belonging to the 2nd respondent;
and insured with the 3rd respondent, came
on the wrong side and
rammed into the vehicle of the deceased resulting in the accident, as
a
result of which Shivpal died in the said accident.

5 It was the case of the claimants before the Tribunal that

deceased Shivpal was in
possession of heavy vehicle driving licence
and was earning Rs.15,000/per
month. Apart
from the claim on
account of loss of dependency, they also claimed compensation on all
other conventional heads. The Tribunal has held that accident
occurred due to rash and
negligent driving of the vehicle, driven by
the 1st respondent. The Tribunal by taking into
account the income of
the deceased at Rs.5746/per
month has awarded a total
compensation of Rs.10,99,700/inclusive
of consortium of
Rs.40000/to
the wife and minor
child. The Tribunal had merely
awarded an amount of Rs.10000/each
to the
appellantparents,
of
the deceased.

6 We have heard Sri Aditya Singh, learned counsel for the

appellants and Sri Sahil Raveen,
learned counsel for respondent no.3.

7 Mainly it is contended by learned counsel for the appellants

that though the deceased was
earning Rs.15,000/per
month, being a
heavy vehicle driver, the Tribunal has awarded
compensation on
account of loss of dependency by taking the income of the deceased at
Rs.5746/per
month. It is submitted that wife of the deceased, i.e.
respondent no.4 has
clearly stated in her deposition that deceased
was earning Rs.15000/per
month. It is
submitted that inspite of
such evidence on record the Tribunal has committed error in taking
the income of the deceased at Rs.5746/as
per the minimum wage
notified to the skilled
labour. Further it is submitted that Tribunal
has committed error in recording a finding that
the appellants are not
dependents as they were living separately. Lastly it is submitted that
appellants are also entitled to compensation under the head of loss of
consortium .

8 The learned counsel appearing for the 3rd respondent has

submitted that in absence of
any documentary evidence on record to
show the salary of the deceased at Rs.15,000/per
month the
Tribunal has correctly taken into account the monthly earnings of the
deceased at
Rs.5746/.
By relying on a judgment of this Court in the
case of Kirti & Anr. v. Oriental
Insurance Company Limited, (2021) 2 SCC 166
learned counsel has submitted that there are
no grounds to interfere
with the impugned judgment of the High Court.

9 Having heard the learned counsels on both sides, we have

perused the impugned order
and other material placed on record. At
the outset, we may note that the High Court by a
cryptic order
dismissed the appeal preferred by the appellants without considering
the
various grounds raised in the appeal.

10 It is the specific case of the claimants that the deceased

was possessing heavy vehicle
driving licence and was earning
Rs.15000/per
month. Possessing such licence and driving
of heavy
vehicle on the date of accident is proved from the evidence on record.
Though the
wife of the deceased has categorically deposed as AW1
that her husband Shivpal was
earning Rs.15000/per
month, same
was not considered only on the ground that salary
certificate was not
filed. The Tribunal has fixed the monthly income of the deceased by
adopting minimum wage notified for the skilled labour in the year
2016. In absence of salary
certificate the minimum wage notification
can be a yardstick but at the same time cannot be
an absolute one to
fix the income of the deceased. In absence of documentary evidence
on
record some amount of guesswork is required to be done. But at
the same time the
guesswork for assessing the income of the deceased
should not be totally detached from
reality. Merely because claimants
were unable to produce documentary evidence to show
the monthly
income of Shivpal, same does not justify adoption of lowest tier of
minimum
wage while computing the income. There is no reason to
discard the oral evidence of the
wife of the deceased who has deposed
that late Shivpal was earning around Rs.15000/per
month. In the
case of Minu Rout & Anr. v. Satya Pradyumna Mohapatra & Ors., (2013) 10 SCC
695
this Court while dealing with the claim relating to an accident which
occurred on
08.11.2004 has taken the salary of the driver of light
motor vehicle at Rs.6000/per
month. In
this case the accident was
on 27.02.2016 and it is clearly proved that the deceased was in
possession of heavy vehicle driving licence and was driving such
vehicle on the day of
accident. Keeping in mind the enormous growth
of vehicle population and demand for good
drivers and by considering
oral evidence on record we may take the income of the deceased
at
Rs.8000/per
month for the purpose of loss of dependency. Deceased
was aged about 32
years on the date of the accident and as he was on
fixed salary, 40% enhancement is to be
made towards loss of future
prospects. At the same time deduction of 1/3rd is to be made
from the
income of the deceased towards his personal expenses. Accordingly
the income of
the deceased can be arrived at Rs.7467/per
month.
By applying the multiplier of 16 the
claimants are entitled for
compensation of Rs.14,33,664/.
As an amount of Rs.10,99,700/is
already paid towards the loss of dependency the appellantparents
are
entitled for differential
compensation of Rs.3,33,964/.
Further in
view of the judgment of this Court in the case of
Magma General
Insurance Company Limited v. Nanu Ram @ Chuhru Ram & Ors., 2018 SCC
OnLine SC 1546 = (2018) 18 SCC 130 the appellants are also entitled for parental
consortium of Rs.40,000/each.
The finding of the Tribunal that parents cannot be treated as
dependents runs contrary to the judgment of this Court in the case of
Sarla Verma (Smt). &
Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121.
The judgment in the case of
Kirti & Anr. v. Oriental Insurance
Company Limited relied on by the counsel for the
respondent would
not render any assistance in support of his case having regard to facts
of
the case and the evidence on record.

11 For the aforesaid reasons this appeal is allowed and

appellants are entitled for further
compensation amount of
Rs.3,33,964/on
account of loss of dependency and consortium
amount of Rs.40,000/each.
Thus total compensation payable to the
appellants is fixed at
Rs.4,13,964/with
interest @ 6% p.a. from the
date of filing of claim petition.

12 For the aforesaid reasons the appeal is partly allowed, with no

order as to costs.
 LAW FINDER 15
Submitted By: Judge Vikram solanki
PDF downloaded from the online archives of Chawla Publications(P) Ltd.

National Insurance Company Ltd. v. Chamundeswari (SC) : Law Finder Doc Id # 1888531
SUPREME COURT OF INDIA
Before:- R. Subhash Reddy and Hrishikesh Roy, JJ.
Civil Appeal No.6151 of 2021 (Arising out of Special Leave Petition (C) No.4705 of 2019). D/d. 1.10.2021.
National Insurance Company Ltd. - Appellant
Versus
Chamundeswari & Ors. - Respondents
For the Appellant :- Ranjan Kumar Pandey, Advocate.
For the Respondents :- Rakesh K. Sharma, Advocate.
Motor Vehicles Act, 1988 Section 166 .
Cases Referred :
National Insurance Company Limited v. Pranay Sethi, 2017 (16) SCC 680.
Nishan Singh v. Oriental Insurance Company Limited, 2018 (6) SCC 765.
Oriental Insurance Company Limited v. Premlata Shukla, 2007 (13) SCC 476.
Sarla Verma (Smt) v. Delhi Transport Corporation, 2009 (6) SCC 121.
JUDGMENT
R.Subhash Reddy, J. - Leave granted.
2. This appeal is filed by National Insurance Company Ltd. (3rd Respondent before the High Court),
aggrieved by the judgment and order dated 03.08.2018, passed by the High Court of Judicature at
Madras in CMA No.1204 of 2018. By the aforesaid order, the High Court has partly allowed the Civil
Miscellaneous Appeal filed by the Respondent Nos. 1 and 2, by enhancing compensation to
Rs.1,85,08,832/-.
3. The 1st Respondent is wife and the 2nd Respondent is minor son of the deceased Mr. Subhash
Babu, who died in a road accident on 14.10.2013. The deceased Mr. Subhash Babu, aged about 35
years was working as Manager HR in a Private Limited Company. On the date of accident, he was
driving Maruti car bearing No.DL-2C-P-5414 on NH-47 - main road from Perumanallur to Erode. At
that time, the Eicher van bearing Registration No.TN-33-AZ-5868 was proceeding in front of the car
driven by the deceased. It is the case of the respondents-claimants that all of a sudden, the driver of
Eicher van has turned towards right side without giving any signal or indicator. In the said
accident, driver of the Maruti car, Mr. Subhash Babu, died and other passengers in the car i.e. 1st
Respondent-wife, 2nd Respondent-minor son and sister of the 1st Respondent, suffered injuries.
4. In the Claim Petition, filed by the Respondent Nos. 1 and 2 before the Motor Accident Claims
Tribunal / Additional District Court, Tiruppur, respondents claimed compensation of Rs.3 crores. The
 LAW FINDER
Submitted By: Judge Vikram solanki
PDF downloaded from the online archives of Chawla Publications(P) Ltd.

respondents pleaded negligence on the part of the driver of Eicher van as he has taken right turn
without giving any signal or indicator, as such, accident occurred only due to negligence of driver of
Eicher van. The appellant and others have appeared before the Claims Tribunal and opposed the
claim. The Claims Tribunal vide order dated 11.12.2017 passed in M.C.O.P. No.842 of 2014 has allowed
the claim partly and awarded compensation of Rs.10,40,500/- with a finding that there was a
contributory negligence on the part of drivers of both the vehicles in ratio of 75% and 25% on the
part of the deceased and the driver of Eicher van respectively. On appeal, the High Court by
recording a finding that accident occurred only due to the negligence of the driver of the Eicher
van and the annual income of the deceased was Rs.12,29,949/-, has awarded a total compensation of
Rs.1,85,08,832/-, including the compensation on conventional heads. Aggrieved by the judgment and
order of the High Court, the Insurance Company filed this Appeal before this Court.
5. We have heard Mr. K. K. Bhat, learned counsel appearing for the Appellant-Insurance Company
and Mr. V. Balaji, learned counsel appearing for the Respondents-Claimants.
6. The submission of the learned counsel for the appellant is twofold. Firstly, it is submitted that
though the Tribunal has correctly apportioned the negligence on the part of the deceased and the
driver of Eicher van, the same was overturned by the High Court, contrary to the evidence on
record. Mainly it is contended that in the First Information Report, it was categorically mentioned
that accident occurred only due to negligence by the deceased. In spite of the same, such important
documentary evidence is ignored by the High Court. The learned counsel in support of his
arguments placed reliance on the judgments of this Court in the case of Oriental Insurance
Company Limited v. Premlata Shukla and Others, 2007 (13) SCC 476 and in the case of
Nishan Singh and Others v. Oriental Insurance Company Limited, 2018 (6) SCC 765 . It is,
further, submitted by the learned counsel that the compensation awarded by the High Court is
exorbitant in absence of any acceptable evidence on record to show income of the deceased, as
pleaded in the Claim Petition.
7. On the other hand, Mr. V. Balaji, learned counsel for the respondents submitted that the accident
occurred only due to the sheer negligence on the part of the driver of Eicher van. It is submitted
that the deceased was driving Maruti car and ahead of them the Eicher van was proceeding and
the driver of the said van turned towards right side without any signal or indicator and the said
lapse resulted in the accident. It is, further, submitted that the deceased was working as Manager
HR in a Private Limited Company and was earning a sum of Rs.1,33,070/- per month, in spite of the
same, the High Court has taken income of the deceased at Rs.12,29,949/- per annum and awarded
the compensation. It is submitted that in view of the oral and the documentary evidence on record,
a just compensation is awarded by the High Court and there are no grounds to interfere with the
same.
8. It is clear from the evidence on record of PW-1 as well as PW-3 that the Eicher van which was
going in front of the car, has taken a sudden right turn without giving any signal or indicator. The
evidence of PW-1 & PW-3 is categorical and in absence of any rebuttal evidence by examining the
driver of Eicher van, the High Court has rightly held that the accident occurred only due to the
negligence of the driver of Eicher van. It is to be noted that PW-1 herself travelled in the very car
and PW-3, who has given statement before the police, was examined as eye-witness. In view of such
evidence on record, there is no reason to give weightage to the contents of the First Information
Report. If any evidence before the Tribunal runs contrary to the contents in the First Information
Report, the evidence which is recorded before the Tribunal has to be given weightage over the
contents of the First Information Report. In the judgment, relied on by the appellant's counsel in the
 LAW FINDER
Submitted By: Judge Vikram solanki
PDF downloaded from the online archives of Chawla Publications(P) Ltd.

case of Oriental Insurance Company Limited v. Premlata Shukla and Others, 2007 (13) SCC
476 , this Court has held that proof of rashness and negligence on the part of the driver of the
vehicle, is therefore, sine qua non for maintaining an application under Section 166 of the Act. In
the said judgment, it is held that the factum of an accident could also be proved from the First
Information Report. In the judgment in the case of Nishan Singh and Others v. Oriental
Insurance Company Limited, 2018 (6) SCC 765 , this Court has held, on facts, that the car of the
appellant therein, which crashed into truck which was proceeding in front of the same, was driven
negligently by not maintaining sufficient distance as contemplated under Road Regulations, framed
under Motor Vehicles Act, 1988. Whether driver of the vehicle was negligent or not, there cannot be
any straitjacket formula. Each case is judged having regard to facts of the case and evidence on
record. Having regard to evidence in the present case on hand, we are of the view that both the
judgments relied on by the learned counsel for the appellant, would not render any assistance in
support of his case.
9. Even with regard to quantum of compensation, it is clear from the judgment of the High Court
that the accident occurred on 14.10.2013, the High Court has correctly taken into account the salary
disclosed by the deceased in Form-16 for the Financial Year 2012-2013 and income of the deceased is
taken as Rs.12,29,949/- per annum for the purpose of determination of loss of dependency. Though,
it was the claim of the respondents-claimants that the deceased was earning Rs.1,33,070/- per
month, the same was not accepted and the High Court itself assessed the income of the deceased at
Rs.12,29,949/- per annum. As the deceased was in permanent job and having regard to age of the
deceased on the date of the accident, the future prospects and the multiplier were correctly applied
by the High Court, which is in conformity with the judgment of this Court in the Case of Sarla
Verma (Smt) and Others v. Delhi Transport Corporation and Another, 2009 (6) SCC 121
and also in the case of National Insurance Company Limited v. Pranay Sethi and Others,
2017 (16) SCC 680 . Even the amount of compensation on other conventional heads is awarded
correctly by the High Court. For the aforesaid reasons, we do not find any merit in this Civil Appeal
and the same is accordingly dismissed with no order as to costs.
10. While issuing notice, this Court vide order dated 18.02.2019 granted stay of enforcement of the
impugned judgment, subject to condition of depositing the lumpsum compensation of Rs.25 Lakhs
before the Tribunal with a direction to deposit the same in an interest earning Fixed Deposit in a
Nationalised bank. The said amount shall be paid to the respondents-claimants with accrued
interest. The balance amount payable by the appellant-Insurance Company shall be paid within a
period of two months from today.
.
 16
2021 (0) AIJEL-SC 67111

SUPREME COURT OF INDIA

Hon'ble Judges:Sanjay Kishan Kaul and Hemant Gupta JJ.

Karthik Subramanian Versus B.Sarath Babu & Anr.

CIVIL APPEAL No. 799 of 2021 ; 800 of 2021 ; *J.Date :- MARCH 02, 2021

MOTOR VEHICLES ACT, 1988 Section - 166

Motor Vehicles Act, 1988 - S. 166 - motor accident - quantum of compensation - appellant suffered serious injuries in an accident
resulting in 40% permanent disability - Tribunal awarded amount of compensation at Rs. 21,92,000/- - High Court reduced
compensation to Rs. 3,40,000/- - challenged on ground that nothing has been granted on account of future prospects - held, multiplier
method has to be applied for future prospects and advancement in life and career - thus, the same principle would have to apply -
thus, same principle of loss of the earning power to be adopted taking into consideration that appellant has been able to establish
through documents of employment and bank statement that he was getting a salary of Rs. 37,500/-, albeit for a short period - 50% of
that amount would have to be taken into account which is Rs. 18,750/- per month and multiplied by 12 for the whole year - multiplier
would be 16 in the present case taking into consideration that age of appellant is 34 years - disability is 40 per cent, therefore, loss of
earning power would be Rs. 14,40,000/- - further, Rs. 7,20,000/- towards future prospects (50% Addition) - thus, claimant entitled for
total amount of Rs. 21,60,000/- - interest payable throughout would be at 9 per cent per annum - appeals allowed.

Imp.Para: [ 4 ] [ 5 ] [ 6 ] [ 7 ]

Cases Referred To :

1. National Insurance Company Ltd. V. Pranay Sethi & Ors., 2017 16 SCC 680 : 2017 AIR SC 5157 : 2017 (13) Scale 12 : JT 2017 (10)
450 : 2017 (8) Supreme 107

Cases Relied on :

1. Erudhaya Priya V. State Express Transport Corporation Ltd., 2020 0 JX(SC) 477 : 2020 AIR SC 4284 : 2020 (9) Scale 213 : JT 2020
(8) 531 : 2020 (3) RCR(Civ) 374
2. Sandeep Khanduja V. Atul Dande, 2017 3 SCC 351 : 2018 AIR SC(Supp) 1246 : 2017 (2) Scale 314 : JT 2017 (2) 68 : 2017 (5)
Supreme 29

Equivalent Citation(s):
2021 ACJ 993 : 2021 JX(SC) 170

JUDGMENT :-

1 Leave granted.

2 The appellant suffered serious injuries in an accident

resulting in 40% disability. The claim was preferred before
the Motor Accident
Claims Tribunal which assessed the amount of
compensation at Rs.21,92,000/-. The Insurance Company,
aggrieved by the same preferred an
appeal before the High Court
which in terms of the judgment dated 24.09.2019 has reduced the
compensation to Rs.3,40,000/-.

3 Notice was issued in the Special leave petitions confined

to the aspect of future earnings and that is the only aspect
which has been urged
before us apart from the fact that the
interest should be 9 per cent per annum instead of 7.5% per
annum on account of the judgment in
National Insurance Company
Ltd. v. Pranay Sethi & Ors. - (2017) 16 SCC 680.
Learned counsel for the appellant had relied upon the
recent
judgment of this Court in Erudhaya Priya v. State
Express Transport Corporation Ltd. - 2020 SCC OnLine SC 601.

4 The judgment took into consideration the earlier judgments

including in Pranay Sethi (supra) and Sandeep Khanduja v. Atul
Dande (2017)
3 SCC 351. The latter judgment had opined that
multiplier method was logically sound and legally well
established to quantify the loss of
income as a result of death
or permanent disability suffered in an accident. The present
case being one of permanent disability of 40 per cent,
it has
been urged that the same principle should be applied in the
present case while in fact nothing has been granted on account
of future
prospects.
5 In our view, this issue is no more res integra in view of
Sandeep Khanduja s case (supra) and Erudhaya Priya s case
(supra) opining that
multiplier method has to be applied for
future prospects and advancement in life and career.
Thus, the same principle would have to apply
and learned
counsel for insurance Company cannot seriously contend to the
contrary.

6 We thus, adopt the same principle of loss of the earning

power taking into consideration that the appellant has been
able to establish
through the documents of employment and the
bank statement that he was getting a salary of Rs.37,500/-,
albeit for a short period. Fifty per
cent of that amount would
have to be taken into account which is Rs.18,750/- per month
and multiplied by 12 for the whole year. The
multiplier would
be 16 in the present case taking into consideration that the
age of the appellant is 34 years. The disability is 40 per
cent. The
loss of the earning power would be thus, as under:

Heads Amount

Loss of earning power Rs.14,40,000/-

18750*12*16*40/100

Towards future prospects (50% Addition) Rs.7,20,000/-

Total RS.21,60,000/-

7 The aforesaid is an addition to the amount award by the

High Court of Rs.3,40,000/-.

Insofar as the interest is concerned, the interest

payable throughout would be at 9 per cent per annum.

The appeals are accordingly allowed leaving parties to

bear their own costs.

8 The balance amount be remitted by the Insurance Company

to the appellant within a maximum period of eight weeks from
today.
 17
2012 (0) AIJEL-SC 50896

SUPREME COURT OF INDIA

(KARNATAKA HIGH COURT)

Hon'ble Judges:Cyriac Joseph and T.S.Thakur JJ.

A.V.Padma Versus R.Venugopal

Civil Appeal No. 1095 of 2012 ; *J.Date :- JAN. 27, 2012

MOTOR VEHICLES ACT, 1988

Motor Vehicles Act, 1988 - motor accident - amount of compensation invested in fixed
deposits - application for release of - Tribunal directed to invest Rs 1,00,000/- each in long
terms deposit in favor of appellant No. 2 and 3 and to disburse balance amount to
appellants - appellants filed application praying for disburse of entire amount - Tribunal
rejected application - appeal - appellants contended that if money was locked up in
nationalized bank, only bank would be benefited by deposit as they give a paltry interest
which could not be equated to the costs of materials which were ever increasing - held, in
the case of Susamma Thomas (supra), Supreme Court issued certain guidelines in order to
"safeguard the feed from being frittered away by the beneficiaries due to ignorance, illiteracy
and susceptibility to exploitation" even as per the guidelines, long term fixed deposit of
amount of compensation is mandatory only in the case of minors, illiterate claimants and
widows - in the case of literate persons, it is not mandatory to invest the amount of
compensation in long term fixed deposit - sufficient discretion has been given to the Tribunal
not to insist on investment of the compensation amount in long term fixed deposit and to
release even the whole amount in the case of literate persons - impugned orders of Tribunal
and High Court set aside - application of the appellants for release of the amount invested in
long term deposits allowed - appeal allowed.

Imp.Para: [ 4 ] [ 5 ] [ 6 ]

Cases Referred To :

1. General Manger, Kerala State Road Transport Corporation, Trivandrum V/s. Susamma
Thomas And Others, AIR 1994 SC 1631 : 1994 (2) SCC 176 : 1993 (4) Scale 643 : JT
1993 (Supp) 573 : 1994 AIR SCW 1356

Equivalent Citation(s):
2012 (3) SCC 378 : 2012 (2) Scale 1

JUDGMENT :-

CYRIAC JOSEPH, J.
1 Leave granted.

2 The appellants were the petitioners in Writ Petition No. 10405/2008 which was dismissed
by the High Court of Karnataka as per order dated 5.8.2008 which is impugned in this
appeal. Respondent Nos. 1 to 3 herein were respondent Nos. 1, 2 and 4 in the writ petition.

3 One T.S. Subrahmanyam met with a motor accident on 12.11.1991 and died on 21.7.1993
due to injuries sustained in the accident. Appellant No. 1 is the widow and appellant Nos.2
and 3 are the daughters of the said T.S. Subrahmanyam. In the claim petition filed by the
appellants who are the legal heirs of T.S. Subrahmanyam, the Motor Accidents Claims
Tribunal-I, Mysore (for short, "the Tribunal") passed an award granting Rs.60,000/-- as
compensation. In appeal, the High Court of Karnataka vide its order dated 6.7.2006
enhanced the amount of compensation to Rs.4,25,000/--. Respondent No. 3 - United India
Insurance Co. Ltd. deposited in the Tribunal an amount of Rs.6,33,038/-- on 7.1.2008. On
31.1.2008, the appellants filed an application before the Tribunal praying for release of the
amount in deposit in favour of appellant No. 1, A.V. Padma. Appellants Nos. 2 and 3 filed
affidavits stating that they had no objection to the payment of the amount to their mother
A.V. Padma. However, the Tribunal directed to invest Rs.1,00,000/-- each in long term
deposits in favour of appellant Nos. 2 and 3 and to disburse only the balance amount to the
appellants. The appellants filed a further application dated 19.6.2008 praying to disburse the
entire amount to the decree-holders without insisting on deposit of any portion of the
amount in any nationalized bank. However, by an order dated 28.6.2008, the Tribunal
rejected the prayer for release of the amount of Rs.2,00,000/-- deposited in the nationalized
bank. Aggrieved by the order of the Tribunal, the appellants filed Writ Petition No. 10405 of
2008 in the High Court of Karnataka. The High Court dismissed the writ petition observing
that the Tribunal had passed the impugned order keeping in mind the law declared by the
Supreme Court in General Manger, Kerala State Road Transport Corporation, Trivandrum V/s.
Susamma Thomas and Others, AIR 1994 SC 1631. According to the High Court, the Tribunal
only followed the judgment of the Supreme Court in letter and spirit. Challenging the order of
the High Court this appeal has been filed.

4 In the case of Susamma Thomas (supra), this Court issued certain guidelines in order to
"safeguard the feed from being frittered away by the beneficiaries due to ignorance, illiteracy
and susceptibility to exploitation". Even as per the guidelines issued by this Court Court, long
term fixed deposit of amount of compensation is mandatory only in the case of minors,
illiterate claimants and widows. In the case of illiterate claimants, the Tribunal is allowed to
consider the request for lumpsum payment for effecting purchase of any movable property
such as agricultural implements, rickshaws etc. to earn a living. However, in such cases, the
Tribunal shall make sure that the amount is actually spent for the purpose and the demand
is not a ruse to withdraw money. In the case of semi-illiterate claimants, the Tribunal should
ordinarily invest the amount of compensation in long term fixed deposit. But if the Tribunal is
satisfied for reasons to be stated in writing that the whole or part of the amount is required
for expanding an existing business or for purchasing some property for earning a livelihood,
the Tribunal can release the whole or part of the amount of compensation to the claimant
provided the Tribunal will ensure that the amount is invested for the purpose for which it is
demanded and paid. In the case of literate persons, it is not mandatory to invest the amount
of compensation in long term fixed deposit. The expression used in guideline No. (iv) issued
by this Court is that in the case of literate persons also the Tribunal may resort to the
procedure indicated in guideline No. (i), whereas in the guideline Nos. (i), (ii), (iii) and (v), the
expression used is that the Tribunal should. Moreover, in the case of literate persons, the
Tribunal may resort to the procedure indicated in guideline No. (i) only if, having regard to the
age, fiscal background and strata of the society to which the claimant belongs and such
other considerations, the Tribunal thinks that in the larger interest of the claimant and with a
view to ensure the safety of the compensation awarded, it is necessary to invest the amount
of compensation in long term fixed deposit.

5 Thus, sufficient discretion has been given to the Tribunal not to insist on investment of the
compensation amount in long term fixed deposit and to release even the whole amount in
the case of literate persons. However, the Tribunals are often taking a very rigid stand and
are mechanically ordering in almost all cases that the amount of compensation shall be
invested in long term fixed deposit. They are taking such a rigid and mechanical approach
without understanding and appreciating the distinction drawn by this Court in the case of
minors, illiterate claimants and widows and in the case of semi-literate and literate persons.
It needs to be clarified that the above guidelines were issued by this Court only to safeguard
the interests of the claimants, particularly the minors, illiterates and others whose amounts
are sought to be withdrawn on some fictitious grounds. The guidelines were not to be
understood to mean that the Tribunals were to take a rigid stand while considering an
application seeking release of the money. The guidelines cast a responsibility on the
Tribunals to pass appropriate orders after examining each case on its own merits. However,
it is seen that even in cases when there is no possibility or chance of the feed being frittered
away by the beneficiary owing to ignorance, illiteracy or susceptibility to exploitation,
investment of the amount of compensation in long term fixed deposit is directed by the
Tribunals as a matter of course and in a routine manner, ignoring the object and the spirit of
the guidelines issued by this Court and the genuine requirements of the claimants. Even in
the case of literate persons, the Tribunals are automatically ordering investment of the
amount of compensation in long term fixed deposit without recording that having regard to
the age or fiscal background or the strata of the society to which the claimant belongs or
such other considerations, the Tribunal thinks it necessary to direct such investment in the
larger interests of the claimant and with a view to ensure the safety of the compensation
awarded to him. The Tribunals very often dispose of the claimant's application for
withdrawal of the amount of compensation in a mechanical manner and without proper
application of mind. This has resulted in serious injustice and hardship to the claimants. The
Tribunals appear to think that in view of the guidelines issued by this Court, in every case the
amount of compensation should be invested in long term fixed deposit and under no
circumstances the Tribunal can release the entire amount of compensation to the claimant
even if it is required by him. Hence a change of attitude and approach on the part of the
Tribunals is necessary in the interest of justice.

6 In this case, the victim of the accident died on 21.7.1993. The award was passed by the
Tribunal on 15.2.2002. The amount of compensation was enhanced by the High Court on
6.7.2006. Neither the Tribunal in its award nor the High Court in its order enhancing
compensation had directed to invest the amount of compensation in long term fixed deposit.
The Insurance Company deposited the compensation amount in the Tribunal on 7.1.2008. In
the application filed by the appellants on 19.6.2008 seeking withdrawal of the amount
without insisting on investment of any portion of the amount in long term deposit, it was
specifically stated that the first appellant is an educated lady who retired as a
Superintendent of the Karnataka Road Transport Corporation, Bangalore. It was also stated
that the second appellant Poornachandrika is a M.Sc. degree holder and the third appellant
Shalini was holding Master Degree both in Commerce and in Philosophy. It was stated that
they were well versed in managing their lives and finances. The first appellant was already
aged 71 years and her health was not very good. She required money for maintenance and
also to put up construction on the existing house to provide dwelling house for her second
daughter who was a co-owner along with her. The second daughter was stated to be
residing in a rented house paying exorbitant rent which she could not afford in view of the
spiralling costs. It was further stated in the application that the first appellant was obliged to
provide a shelter to the first daughter Poornachandrika. It was pointed out that if the money
was locked up in a nationalised Bank, only the bank would be benefited by the deposit as
they give a paltry interest which could not be equated to the costs of materials which were
ever increasing. It was further stated that the delay in payment of compensation amount
exposed the appellants to serious prejudice and economic ruin. Along with the application,
the second and third appellants had filed separate affidavits supporting the prayer in the
application and stating that they had no objection to the amount being paid to the first
appellant.

7 While rejecting the application of the appellants, the Tribunal did not consider any of the
above-mentioned aspects mentioned in the application. Unfortunately, the High Court lost
sight of the said aspects and failed to properly consider whether, in the facts and
circumstances of the case, there was any need for keeping the compensation amount in
long term fixed deposit.

8 Having regard to the facts and circumstances of the case and in view of the
uncontroverted averments in the application of the appellants referred to above, we are of
the view that the Tribunal ought to have allowed the prayer of the appellants. Hence the
impugned orders of the Tribunal and the High Court are set aside. The prayer in the
application of the appellants for release of the amount invested in long term deposits stands
allowed. The entire amount of compensation shall be withdrawn and paid to the appellants
without any further delay. The appeal is allowed in the above terms. There will be no order as
to costs.
 Docid # IndLawLib/1600162
18
SUPREME COURT OF INDIA
FULL BENCH

IFFCO TOKIO GENERAL INSURANCE COMPANY LIMITED — Appellant

Vs.

PEARL BEVERAGES LIMITED — Respondent

( Before : Uday Umesh Lalit, Indira Banerjee and K.M. Joseph, JJ. )
Civil Appeal No. of 2021 [Arising out of SLP (Civil) No. 12489 of 2020]
Decided on : 12-04-2021

Motor Vehicles Act, 1988 - Sections 185, 203 and 204 - Drunken driving - Breath analyzer test
or blood test is not mandatory for an insurer to deny an accident policy claim on the ground
of drunken driving - Presence of alcohol in excess of 30 mg per 100 ml. of blood is not an
indispensable requirement to enable an Insurer to successfully invoke the clause - What is
required to be proved is driving by a person under the influence of the alcohol - Drunken
driving, a criminal offence, under Section 185 along with its objective criteria of the alcohol-
blood level, is not the only way to prove that the person was under the influence of alcohol - If
the Breath Analyser or any other test is not performed for any reason, the Insurer cannot be
barred from proving his case otherwise - It is not difficult to contemplate that the accident
may take place with the driver being under the influence of alcohol and neither the Breath
Test nor the laboratory test is done - A driver after the accident, may run away - A test may
never be performed - However, there may be evidence available which may indicate that the
vehicle in question was being driven at the time of the accident by a person under the
influence of alcohol - It cannot then be said that merely because there is no test performed,
the Insurer would be deprived of its right to establish a case which is well within its rights
under the contract - Requirement under Section 185 of the Motor Vehicles Act is not to be
conflated to what constitutes driving under the influence of alcohol under the policy of
insurance in an Own Damage Claim - Such a claim must be considered on the basis of the
nature of the accident, evidence as to drinking before or during the travel, the impact on the
driver and the very case set up by the parties.
Counsel for Appearing Parties
Mr. Shivam Singh, Advocate, Mr. Harpreet Singh Gupta, Advocate, Mr. Vidur Dwivedi, Advocate, Mr.
Gopal Singh, Advocate, for the Appellant; Mr. Gopal Sankaranarayanan, Sr. Advocate, Mr. Ravi Kumar
Agarwal, Advocate, Mr. Jayant Mohan, Advocate, for the Respondent.

Cases Referred

Attygalle v. Emperor [AIR 1936 PC 169]

Bachubhai Hassanalli Karyani v. State of Maharashtra, (1971) 3 SCC 930
Cream v. Smith [(1961) 8 AER 349]
Dr. J.J. Merchant (Dr) v. Shrinath Chaturvedi, (2002) 6 SCC 635
 Emperor vs. Rama Deoji, AIR 1928 BOM 231
Equitable Life Assurance Society of United States v. Adams, 259 Ky. 726, 83 S.W.2d 461, 464
Heltsley v. Life & Casualty Ins. Co. [299 Ky. 396 t(1945)]
Kennedy v. Smith, 1975 S.C. 266; (1975) 6 WLUK 97
LIC of India & Anr. Vs. Ranjit Kaur III (2011) CPJ 232 (NC)
Lord Normand in Barkway v. South Wales Transport Co. [(1950) 1 All ER 392, 399]
Louden v. British Merchants Insurance Co. Ltd., 1961 1 W.L.R. 798
Mair (Administratrix) v. Railway Passengers Assurance Co. (Limited), 1877 37 L.T. 356 DC
Malay Kumar Ganguly v. Dr. Sukumar Mukherjee [(2009) 9 SCC 221 : (2010) 2 SCC (Cri) 299]
Murlidhar and others v. State of Rajasthan, AIR 2005 SC 2345
Payne v. Stanton, 211 N.C. 43, 188 S.E. 629
Richley v. Faull [(1965) 1 WLR 1454 : (1965) 3 All ER 109]
Robinson & Son v. Jone, 254Ky. 637, 72 S.W.2d 16, 19
Seneviratne v. R. [(1936) 3 All ER 36, 49]
Shambu Nath Mehra v. State of Ajmer, AIR 1956 SC 404
Standard Life & Ace. Ins. Co. v. Jones 94 Ala. 434
State through PS Lodhi Colony v. Sanjeev Nanda, 2012 (8) SCC 450
Syad Akbar v. State of Karnataka, (1980) 1 SCC 30
V. Kishan Rao v. Nikhil Super Speciality Hospital and another, (2010) 5 SCC 513
Webb v. Imperial Life Ins. Co., [Inc. 216 N.C. 10 (1939)]

JUDGMENT

K.M. Joseph, J. - Leave granted.

2. An accident, which took place on 22.11.2007 involving a car (a Porsche) belonging to the
respondent-Company, which was insured with the appellant, has resulted in this appeal against the
Order by the National Consumer Disputes Redressal Commission (NCDRC for short) . The car was
completely damaged. The appellant repudiated the claim by the respondent. The question which
arises in this Appeal is, whether the NCDRC is correct in holding that the appellant is not entitled
to invoke the shield of Clause (2c) of the Contract of Insurance, under which, it was not liable, if the
person driving the vehicle, was under the influence of intoxicating liquor, or drugs. The State
Commission rejected the complaint of the respondent finding that there was evidence to show that
the person who drove the vehicle, had consumed liquor and was under the influence of liquor. The
NCDRC, by the impugned Order, on the other hand, found that there was no material to establish
that the driver of the vehicle was under the influence of intoxicating liquor within the meaning of
the Exclusion Clause, as aforesaid.

3. The Clause in controversy reads as follows:

" (2) The Company shall not be liable to make any payment in respect of:

(a) xxx xxx xxx

(b) xxx xxx xxx

 (c) any accidental loss or damage suffered whilst the insured or any person driving the vehicle
with the knowledge and consent of the insured is under the influence of intoxicating liquor or
drugs."

4. The vehicle was driven by one Shri Man Bangia. Following the accident, a First Information
Report came to be lodged. The accident took place in the early morning at about 02.25 a.m. on
22.12.2007. The contents of the FIR, inter alia, read as follows:

" Statement of Ct. Anand Kumar NO.1226/ND, P.S. Tilak, New Delhi, stated that I am posted at
Police Station Tilak Marg as constable and today on 21/22.12.07 I and constable Brijesh
NO.1163/DHG, Duty M/Cy. DL-1SN-8288, P.S. Tilak Margwere on patrolling. A it about 2.25
when I, on my above M/cy., was reached near C-Hexagan Dr. Zakir Hussain Marg while
patrolling, then I see that the driver of Car No. DL-1C J-3577 came from Nizamuddin side
towards Zakir Hussain Marg, India Gate in a very rash, negligent and at a very high speed and
due to very high speed, his car was got out of control and hit at a massive force with the
footpath of C-Hexagan Dr. Zakir Hussain Marg Children park India Gate, Electric Pole and wall
of children Park and got overturned and the car was get fired. I alongwith my associate Home
Guard brought the driver whose name and address Aman Bangia S/o Sh. S.K. Bangia R/o 42-A,
Pkt. C Siddarth Extn. New Delhi-14 and his associates Richi Ram Jaipuria S/o Sh. C.K. Jaipuria
R/o H.No.08, Prithvi Raj Road, Delhi out of the said car after great efforts and reported about
the incident to Wireless Opp. D-56 of Police Station through wireless. After that the vehicles
of Fire Brigade, PCR Van and Add/SHO van you were came on the spot. The accident has been
occurred due to rash and negligent driving by the driver for which the government property
has been damaged. Legal action be taken against the driver. You have recorded my statement
on the spot, read over and heard which is true and correct. Sd/- English Anand Kumar Const.
NO.1226/ND Dt. 22/12.07 Attested SI Kukhitar Singh P.S. TilakMark, New Delhi Dt. 22.12.07.
Sir Duty Officer Police Station Tilak Marg, New Delhi it is submitted that I SI after receipt of
DD No.36A alongwith Ct. Vinod No.2098/ND reached at the place of accident i.e. C-Hexagan
Dr. Zakir Hussain Marg where the Car No.DL-lCJ-3577 was got burnt. Where the Add./SHO
and vehicles of Fire Brigade were also present for controlling the fire. Then we came to know
that the PCR Van has taken away the accused at RML Hospital. I SI and Ct. Vinod Kumar No.
2093/ ND left the spot and departed for the Hospital to know the facts, where I received MLC
NO.62213/07 of Ruchi Ram Jai Puria S/o C.K. Jai Puria R/o H.N0.08, Prithvi Rai Road, Delhi age
27 yrs. upon which the doctors have reported/opined "no evidence of any fresh injury for
medical examination and smell of Breath Alcohal (+) " and MLC No.62214/07 of Man Bangia
S/o Sh. S.K. Bangia R/o 42-A, Pkt.-C Siddarth Extn., New Delhi-14 age 27 years. upon which
the doctors have reported/ mentioned/opined "no evidence of any fresh injury for medical
examination and smell of Breath Alcohal (+). I SI reached at the spot of accident where Ct.
Anand Parkash NO.122 6/ND, P.S. Tilak Mark, New Delhi had come and got recorded his
statement and from the MLC and place of occurrence a case U/s 279/427 of IPC and U/s 185 of
M.V. Act have been committed to be found, therefore the Tehrir has been handed over to Ct.
Vinod Kumar No.2098/ND. The number of case would be informed after registering the case."
[page 39 to 42 of paper book]
5. As far as the case under Section 27 9 of the IPC, it culminated in an Order dated 27.8.2011 passed
on plea bargaining by the driver of the car and it reads as follows:

" Accused Aman Bangia with counsel Sh. Rahul Arora.

Heard on the point of notice. Record Perused. A prima facie case U/sec 27 9 IPC is disclosed
against the accused. So accordingly notice for the offence U/sec. 27 9 IPC is separately framed
against the accused to which accused has voluntary pleaded guilty, but he still insists to plead
guilty. Since the accused has voluntarily pleaded guilty, so he is convicted for the offence
U/sec. 27 9 IPC.

Heard on the point of sentence. The accused prayed for taking lenient view by pleading that
this is his first offence. He has undertaken to drive cautiously in future. So, in view of the facts
and circumstances of the case, the accused is sentenced to pay fine of Rs.1,000/- in default of
S.I. of 10 days. Fine deposited vide receipt No. 866834. File be consigned to Record Room."

6. The respondent after exchange of notices, filed the complaint under Section 17 of the Consumer
Protection Act, 1986 in 2009. Affidavit evidence of the Company Secretary of the respondent (PWl) ,
the driver of the car (PW2) and the person who travelled with the driver in the car (PW3) , was
tendered. The FIR dated 22.12.2007, which was under Section 279/427 of the IPC and Section 185 of
the Motor Vehicles Act, 1988, the medico-legal case sheet of Dr. Ram Manohar Lohia Hospital, were
among the documents produced by the respondent. The Order, which we have referred to under
Section 27 9 of the IPC, was also later produced. The appellant's Vice President gave affidavit
evidence. The Investigator also gave his affidavit evidence affirming his reports.

PLEADINGS

7. In the complaint filed under Section 17 of the Consumer Protection Act, 1986, we may notice the
allegations, which are relevant:

The Exclusion Clause is not applicable as the person driving the vehicle had not consumed any
alcohol. Further assuming that he had consumed alcohol, the case would not fall under the
Exclusion Clause as he was, in any case, not intoxicated. Although the Police had lodged FIR under
Section 185 of the MV Act besides Sections 27 9/427 of the IPC, no charge-sheet has been filed
against the driver till date, meaning thereby, that the Police after investigating the case, could not
find any evidence to prosecute the driver for any of the offences. It is the further case of the
respondent, inter alia, that the respondent had informed the appellant that the MLC only says smell
of alcohol and this does not imply or mean that the driver was under the influence of intoxicating
liquor. It is also pleaded that in the Legal Notice, it was specifically noted that the driver had not
consumed liquor. Section 185 of the MV Act was invoked to plead that unless a certain percentage
of alcohol is found a person cannot be prosecuted for the offence of drunken driving. The law does
not prohibit driving after consuming liquor. No test was performed in regard to the person driving
to establish that he was under the influence of drugs or intoxicating liquor, as provided under
Section 185 of the MV Act or the Exclusion Clause.

It is also pleaded that Intoxication means elate or excite to the degree of frenzy' which means in
simple meaning that the person has no control over his senses.
8. In the reply, filed by the appellant, it is contended, inter alia, as follows. There is official record of
the person driving having been found to have consumed alcohol and driving the vehicle in that
condition. The respondent got the matter investigated through experienced Investigators and they
have collected relevant information and records with their finding that the driver was under the
influence of alcohol. The seriousness of the accident itself showed that the driver was reckless in
driving due to the consumption of the alcohol.

9. Respondent filed a Rejoinder Affidavit reiterating the allegations in the complaint.

THE EVIDENCE

10. In the Affidavit of Evidence given by the Company Secretary (PWl,) on behalf of the respondent,
the case set up about the law not prohibiting driving after consuming liquor and that what is
prohibited is that the percentage of liquor should not exceed 30 mg per 100 ml of blood, is
reiterated. The driver of the vehicle (PW2), in his Affidavit has deposed that he was neither under
the influence of intoxicating liquor or drugs at the time of the accident. That he was in his full
senses and capable of exercising full control over the car, at the time of the accident. His co-
passenger was also not under such influence. No test was performed. He has further deposed that
the FIR 453 of 2007 against him under Section 185 of the MV Act and Sections 27 9/427 of the IPC
was falsely registered. The case was still pending. He was certain to be acquitted in the said case.
The Affidavit Evidence of the co-passenger (PW3) is to the effect that he was not under the
influence of intoxicating liquor or drugs. He has also supported PW2 that PW2 was able to exercise
proper control over the vehicle and he was not under the influence of liquor or drugs at the time of
the accident. The Police Officer and Hospital Doctor did not find them under the influence of
intoxicating liquor and no test was performed. Apart from the appellant's Vice President, the
Investigator of the appellant gave affidavit evidence when he vouchsafed for the correctness of his
reports.

THE ORDER OF THE STATE COMMISSION

11. The State Commission finds, inter alia, as follows:

The date and time of the occurrence was 22.12.2007 at 02.25 A.M.. The official record of the driver
goes to show that he was driving the vehicle after consuming alcohol. Whether he was completely
or partially under the influence of alcohol was a different matter. There is not a slightest doubt that
the driver drove the vehicle after consuming alcohol. The manner and intensity with which the
accident had occurred and its overall impact goes to prove the said facts. [The finding is to be
appreciated in the light of the statements in the FIR about the car being driven rashly and
negligently and at a very high speed. It collided with an electric pole and the wall of the Children
Park as a result of which the car turned upside down/overturned and also caught fire. ] Adverting to
the Judgment of this Court in Bachubhai Hassanalli Karyani v. State of Maharashtra, (1971) 3 SCC
930, it was found as follows:

The degree of proof required in a criminal case is much higher than the evidence required in civil
proceedings, which are decided on the principle of Preponderance of the Evidence. The driver has
confessed to his guilt under Section 279. The result of the other two offences (Sections 427 of the
IPC and 185 of the MV Act was not made available) . The State Commission also found it fit to apply
the principle of res Ipsa loquitur, having regard to the circumstances surrounding the accident. The
proceedings under the Consumer Protection Act, being summary in nature, the Commission was
not required to go into the technicalities of Criminal or Civil Jurisprudence. The impact of the
accident was such that the vehicle turned upside down and caught fire. The vehicle of the Fire
Brigade had to be pressed into service. The vehicle turned into a total wreck. The State Commission
also found that there appeared to be a breach of Condition 4 of the Policy of Insurance ("The
insured shall take all reasonable steps, to safeguard the loss of damage") . It is found that at the
time of the accident, the vehicle was being driven rashly and negligently and the driver had
consumed liquor, which by itself was in violation of the Policy conditions.

THE IMPUGNED ORDER OF THE NCDRC

12. The NCDRC, finds as follows:

"4. The only question which arises for consideration in this case is as to whether the driver of
the vehicle was under influence of intoxicating liquor or drugs at the time the vehicle met
with an accident and got extensively damaged. Though it has come on record that the driver of
the vehicle had taken some liquor before he drove the vehicle, the said record being available
in the form of statement of a policeman who stated that the smell of the liquor was coming
from the mouth of the driver, there is absolutely no evidence to prove the quantity of liquor
which he had consumed before driving the vehicle. Admittedly, no medical examination of the
driver was got conducted in order to ascertain the quantity of the alcohol in his blood at the
time the vehicle met with an accident. In terms of Section 185 of the Motor Vehicles Act, a
person is liable to punishment if he is found while driving, alcohol exceeding 30 mg per
hundred ml of blood and the level of alcohol is required to be verified by way of test done by
use of a breath synthesiser. Admittedly, no such test was conducted and, therefore, no
evidence was available before the State Commission or even to the insurer to prove that the
driver had alcohol exceeding 30 mg per hundred ml of the blood, at the time the vehicle met
with an accident. Therefore, the insurer has failed to prove that the insured had committed a
breach of the terms of the policy, the driver being under influence of liquor."

13. Thereafter, it referred to its Order in Royal Sundaram General Insurance Company Limited v.
Davubhai Babubhai Ravalia in Revision Petition No. 1296 of 2018 dated 04.09.2018, which reads as
follows:

"6. The next question which arises for consideration is as to whether on account of the above
referred quantity of alcohol having found in the blood of the driver, he can be said to be under
influence of intoxicating liquor or not. This issue came up for consideration of this
Commission in Lakshmi Rohit Ahuja Vs. SBI Life Insurance Co. Ltd., RP No.3249 of 2015,
decided on 28.04.2016 and the following view was taken:

6. As per the FIR, the vehicle was being driven by the deceased at the time it met with an
accident. As per the chemical analysis report in respect of the viscera of the stomach and
intestine of the deceased, there was 120 ml of Ethyl alcohol per 100 gm in the blood of the
deceased. Hence the question which arises for consideration is as to whether a person having
120 mg of alcohol per 100 ml of his blood can be said to be under influence of intoxicating
liquor. This question came up for consideration of this Commission in Consumer Complaint
No. 401 of 2014 Baby Apoorva Rai Vs. New India Assurance Co. Ltd. & Anr. Decided on
03.9.2015 and the following view was taken:

3. There is no direct evidence of the deceased being under influence of intoxicating liquor at
the time he got drowned in the swimming pool. The only evidence relied upon the insurance
company to substantiate the plea that he was under the influence of intoxicating liquor at the
time he died, is the report of the laboratory reporting presence of 103.14 mg of ethyl alcohol
per 100 ml of the blood of the deceased.

4. Relying upon Modi' s Medical Jurisprudence and Toxicology, 24th Edition, the learned
counsel for the complainants submitted that the presence of 103.14 mg/100 ml of the blood
does not lead to the conclusion that the deceased was under the influence of intoxicating
liquor. He relied upon the following extract from the above-referred text book:

"It is generally believed that a person with a concentration of 0.1 per cent alcohol in the blood
appears to be gay and vivacious, and those with a concentration of 0.15 per cent alcohol in the
blood are regarded as fit to drive a motor vehicle. This concentration of alcohol in the blood is
regarded as a presumptive limit of safety, and may result from the rapid consumption of 8
ounces of whisky of 4 to 5 pints of beer.

Alcohol acts differently on different individuals and also on the same individual at different
times. The action depends mostly on the environment and temperature of the individuals and
upon the degree of dilution of the alcohol consumed. The habitual drinker usually shows
fewer effects from the same dose of alcohol. Barbiturates, benzodiazepines, antihistamines,
tranquillizers, chlorpromazine and insulin, potentiate the action of alcohol, while epileptics
or persons who have suffered from a head injury may show an increased effect to a small
quantity of alcohol".

It would thus be seen that in the opinion of the Author, the percentage of alcohol in the blood
would be 0.2% in case, the quantity of alcohol per 100 ml of blood is 200 mg. Thus, a person
who has 200 mg alcohol per 100 ml. of his blood can be said to be moderate intoxicated, if we
go by the above referred opinion. A person with a concentration of 0.15% alcohol in the blood
is regarded to be fit to drive a motor vehicle. 0.15% of alcohol in the blood comes only if he
has 150 mg of alcohol per 100 ml. of his blood.

5. The learned counsel for the insurance company, however, relied upon an Article titled
"While Under the Influence of Intoxicating Liquor" written by W.W. Thornton and published
on 11.01.1928 in Indiana Law Journal. The question considered in the above referred Article
was as to what condition must a driver of a motor vehicle be in to be "under the influence of
intoxicating liquor or narcotic drugs"? The Author extracted the following observations from
the judicial pronouncements considered by him:

"A person is drunk in legal sense when he is so far under the influence of intoxicating liquors
that his nerves are visibly excited or his judgment impaired by the liquor'
"Intoxicated condition" means that if the person "were in such a state that he was incapable of
giving the attention to what he was doing, which a man of prudent and reasonable
intelligence would give".

"When it appears that a person is under the influence of liquor, or when his manner is unusual
or abnormal, and his inhibited condition is reflected in his walk or conversation, when his
ordinary judgment and common sense are disturbed, or his usual will power is temporarily
suspended, when they or similar symptoms result from the use of liquors and are manifest,
then the person is ' intoxicated'. It is not necessary that the person would be so-called dead-
drunk or hopelessly-intoxicated. It is enough that his sense are obviously destroyed or
distracted by the use of intoxicating liquors within the meaning of the statute authorizing
recovery of damages against a saloon keeper who sells liquors to an intoxicated person".

"Under the law a man is intoxicated whenever he is so much under the influence of spirituous
or intoxicating liquors that it so operates upon him, that it so affects his acts, or conduct or
movement, that the public or parties coming in contact with him could readily see and know
that it was affecting him in that respect. A man to that extent under the influence of liquor
that parties coming in contact with him, or seeing him, would readily know that he was under
the influence of liquor, by his conduct or his words or his movements, would be sufficient to
show that such party was intoxicated".

Whenever a man is under the influence of liquor so as not to be entirely at himself, he is

intoxicated; although he can walk straight' although he may attend to his business, and may
not give any outward and visible signs to the casual observer that he is drunk, yet if he is
under the influence of liquor so as not to be at himself, so as to be excited from it, and not to
possess that clearness of intellect and that control of himself that he otherwise would have, he
is intoxicated".

It would thus be seen that the Article relied upon by the learned counsel for the opposite party
is not based on the quantity of the alcohol found in the blood of a person. This Article does
not go into the question as to how much quantity of the ethyl alcohol in the blood of a person
can lead to the inference that he was under influence of intoxicating liquor.

6. The learned counsel for the opposite party has also relied upon the following information in
Lyon's Medical Jurisprudence and Toxicology:

"The American Medical Association and the National Safety Council of USA have adopted the
following policy-statement with regard to intoxication - "Blood alcohol of 0.10% can be
accepted as prima facie evidence of alcoholic intoxication, recognizing that many-individuals
are under the influence in the 0.05 to 0.10% range." The Uniform Vehicle Code of USA 1962
has as its standards: "Blood alcohol of 0.05% or less raises a presumption that the subject was
not under the influence of alcoholic beverage; blood alcohol in excess of 0.05% but less than
0.10% raises no presumption of intoxication or soberness; blood alcohol of 0.10% or more
raises the presumption that the subject was under the influence of alcoholic beverage".

In different countries the prescribed limit for permissible blood alcohol is as follows:
 India - 30
mg%

USA - 100
mg%

Australia - 40
mg%

Terminologies used in medico-legal context: The following terminologies are employed in

medico-legal cases. Their exact meaning should be understood.

Sober - blood alcohol concentration of less than 10 mg%

Drinking Blood alcohol concentration of 20-70 mg%

Under the influence of alcohol blood alcohol concentration of 80-100 mg%

Drunk or intoxicated - blood alcohol concentration of 150-300 mg%

Coma and death - blood alcohol concentration in excess of 400 mg%".

As per the above referred text book, a person is under the influence of alcohol when the blood
alcohol concentration is 80-100mg/100 ml of the blood. The above referred text book also
shows that the USA, which is most liberal, as far as the quantity of alcohol which a person can
consume at the time of driving also allows only up to 100 mg alcohol/100 ml of the blood. It
further shows that if the alcohol content is .1%, it would be the prima facie evidence of
alcoholic intoxication. Blood alcohol percentage of . 1% comes when the quantity of ethyl
alcohol in the blood is 100 mg/100 ml of the blood. Thus, if we go by the text book of Modi, a
person, who has consumed less than 150 mg of alcohol per 100 ml. of his blood, cannot be said
to be under influence of intoxication, whereas as per the text book of Lyon's, a person having
100 mg or more per 100 ml of blood will be said to be under influence of alcohol.

7. In a Manual for Physicians in National Drug Dependence Treatment Centre, All India
Institute of Medical Sciences, New Delhi the effects of alcohol has been stated as under:

BAC mg/dl Effects

<80 Euphoria, feeling of relaxation and

talking freely, clumsy movement of
hands and legs, reduced alertness
but believes himself to be alert.
 <80 Noisy, moody, impaired judgement,
impaired driving ability
100-200 Electroencephalographic changes
begin to appear, Blurred vision,
unsteady gait, gross motor in-
coordination, slurred speech,
aggressive, quarrelsome, talking
loudly.

200-300 Amnesia for the experience -

blackout.

300-350 Coma

355-600 May cause or contribute to death

It would thus be seen that in terms of the above referred compilation issued by the AIIMS, if
the quantity of alcohol in the blood is 100 or more mg. /dl (100 ml) , it leads to vision getting
blurred, the gait become unsteady and the coordination gets affected. These changes, in our
opinion, can occur only when someone is already under the influence of alcohol by that time.
The judgment of the drinker as well as his driving ability gets affected even where the quantity
of alcohol in the blood is 80 mg or more per 100 ml of the blood.

8. The learned counsel for the complainant has relied upon the decision of this Commission in
LIC of India & Anr. Vs. Ranjit Kaur III (2011) CPJ 232 (NC) , where the quantity of alcohol in
the blood was found to be 86.2 mg./l00 ml of blood. Ruling in favour of the complainant, this
Commission inter-alia observed as under:

"It has also come in evidence that this by itself is not adequate proof that the deceased was
intoxicated at the time of his death. As rightly observed by the learned Fora below, the specific
clinical picture of alcohol intoxication also depends on the quantity and frequency of
consumption and duration of drinking at that level and, therefore, mere presence of alcohol
even above the usually prescribed limits is not a conclusive proof of intoxication. Apart from
this, there is also no evidence that there was a nexus between the death caused by electric
shock and consumption of liquor".

9. The learned counsel for the opposite party, on the other hand has relied upon the decision
of this Commission in LIC of India & Anr. Vs. Priyanka Singh First Appeal No. 368 of 2014
decided on 14.10.2005. In the above referred case, 109.92 mg of ethyl alcohol per 100 ml of
blood was found in the body of the Insured. Dismissing the complaint, this Commission, inter-
alia observed and held as under:

"As per the medical literature, "HWV COX Medical Jurisprudence and Toxicology, Seventh
Edition PC Dikshit" brought on record, there are three stages of alcoholic intoxication, which
reads as follows:

"Stage of Excitement (50 to 150 mg percent)

Feeling of well-being slight excitement, increased confidence, lack of self-control are usually
seen. There is a heightened sexual desire, but performance is reduced. The visual acuity is
reduced. It also alters time and space orientation. There is poor judgment and mental
concentration is retarded".

The learned counsel for the complainant/respondent in the above referred case relied upon
the text book of Biochemistry as per which quantity of 50-150 mg was described as Pre-
intoxication in which there are signs of instability, decreased neuromuscular coordination and
the judgment and control required for quick responses such as car driving are impaired.
Whereas in intoxicating stage (150-300 mg/dl) speech is impaired and motor skills are in
coordinated. However, relying upon the Medical Literature produced by the appellant
Corporation, this Commission held that the deceased was under intoxication as a result of
consumption of alcohol found in his blood sample, making him ineligible to the benefits of
double accident policy. It would be pertinent to note that in the above referred case, no
amount was payable in case the insured was under influence of intoxicating liquor drug or
narcotics.

10. Considering the opinion expressed in the Manual issued by All India Institute of Medical
Sciences, which is the premier most medical Institution in this Country, we are not inclined to
accept the opinion expressed in Modi's Medical Jurisprudence and Toxicology, particularly
when the opinion of AIIMS also find corroboration from the opinion expressed in Lyon's
Medical Jurisprudence and Toxicology. Though, this is not a case of the death while driving
after consuming alcohol, the maximum quantity of alcohol permitted by various countries for
a person to drive a motor vehicle cannot be said to be an altogether irrelevant since the
purpose of prohibiting driving after consuming liquor beyond the prescribed quantity is to
ensure that the driver does not commit an accident on account of the effect of liquor on him.
The purpose of the insurer behind excluding the cases of accident when the insured is under
influence of intoxicating liquor is to ensure that the consumption of the liquor does not lead
or contribute to happening of the accident in which the insured dies or injured. Therefore,
consumption of liquor beyond a safe limit must necessarily disqualify the insured from getting
the benefits of the insurance policy taken by him. The quantity of alcohol allowed to the driver
of a motor vehicle is not more than 100 mg/100 ml of the blood in any country, including USA
though, in our country it is only 30 mg/100 ml of blood. Therefore, in our opinion, if a person
is found to have consumed more than 103.14 mg of alcohol/100 ml of his blood, which is
position in the case before us, it would be reasonable to say that he was under the influence of
the intoxicating liquor at the time he died or got injured. We are fortified in taking this view
from the decision of this Commission in Priyanka Singh (supra). As far as the decision of this
Commission in Ranjit Kaur (supra) is concerned, we find that the quantity of alcohol in the
blood of the insured in that case was of 86.2 mg, which was much less than quantity of the
alcohol found in the blood of the deceased Surya Kiran.
 Though in Ranjit Kaur (supra), this Commission, inter-alia observed that there was no nexus
between the death caused by electric shock in consumption of liquor, the aforesaid
observation is only an obiter and does not constitute the ratio decidendi of the case. In fact,
the aforesaid obiter is contrary to the express terms of the insurance policy which absolves the
insurer of its obligation under the policy, in case the insured was under the influence of the
intoxicating liquor at the time of the accident and the policy does not require any nexus to be
shown between the case of accident and the consumption of liquor. "

14. It was further found that in the case of Ranjit Kaur (supra), which is referred to, the quantity of
liquor in the blood sample was found to be 86.2 mg and it was still found that the driver was not
intoxicated. In the present case, it is found that there is no evidence regarding the quantity of
liquor in the blood of the driver. The onus was upon the appellant-Insurer to prove that the
quantity of alcohol was at least 30 mg and, therefore, exceeded the limit prescribed under Section
185 of the MV Act. The NCDRC allowed the appeal and set aside the order of the State Commission
and directed the appellant to assess the loss of the respondent and to pay the amount at the rate of
9 per cent per annum from the date of complaint within six weeks of the date of assessment to the
respondent.

SUBMISSIONS OF PARTIES

15. We heard Shri Shivam Singh, learned Counsel for the appellant and Shri Gopal
Sankarnarayanan, learned Senior Counsel for respondent.

16. Shri Shivam Singh, learned Counsel, contended that this is a clear case where unimpeachable
material in the form of official records established that the car was being driven by a person who
was under the influence of intoxicating liquor. The high speed and the manner in which the
accident occurred, viz., the vehicle hitting against the pole, turning turtle and further catching fire,
along with the fact that the FIR and the MLC indicating that the driver smelt of the alcohol sufficed
to attract the Exclusion Clause and protect the appellant. The impact of the accident, resulting in
the car becoming a complete wreck, is emphasised, to point out that the circumstances existed
which entitled the appellant to extricate itself from the huge financial burden in tune with a
specifically provided Exclusion Clause. He drew our attention to the following decision in V. Kishan
Rao v. Nikhil Super Speciality Hospital and another, (2010) 5 SCC 513. Therein, this Court held as
follows:

"13. Before the District Forum, on behalf of Respondent 1, it was argued that the complainant
sought to prove Yashoda Hospital record without following the provisions of Sections 61, 64,
74 and 75 of the Evidence Act, 1872. The Forum overruled the objection, and in our view
rightly, that complaints before the Consumer Fora are tried summarily and the Evidence Act in
terms does not apply. This Court held in Malay Kumar Ganguly v. Dr. Sukumar Mukherjee
[(2009) 9 SCC 221 : (2010) 2 SCC (Cri) 299] that provisions of the Evidence Act are not
applicable and the Fora under the Act are to follow the principles of natural justice (see para
43, p. 252 of the report).

17. The said decision was rendered in regard to a complaint regarding medical negligence and the
question which arose was, whether Expert evidence was necessary to prove such medical
negligence. This Court also held as follows:

"50. In a case where negligence is evident, the principle of res ipsa loquitur operates and the
complainant does not have to prove anything as the thing (res) proves itself. In such a case it
is for the respondent to prove that he has taken care and done his duty to repel the charge of
negligence."

18. He further pointed out that the Court may appreciate the nature of the case set up by the driver
of the vehicle. It is pointed out that it was contended by the respondent that the vehicle was not
driven rashly and negligently. Yet, in the criminal case, the driver pleaded guilty and the sentence,
as already noticed, came to be pronounced by the Criminal Court. This, beyond doubt, established
that the case of the respondent that car was not being driven in a rash and negligent manner, was
false. It clearly probablised the case of the appellant that the car was being driven rashly and
negligently and this is attributable only to the fact that the driver was under the influence of
intoxicating liquor. The evidence in this regard is furnished by the Report of a Police Officer (the
FIR) and further strengthened by the MLC. He further complained that the NCDRC has completely
erred in holding that the burden was on the Insurer to prove the quantity of alcohol in the blood of
the driver. He would point out the sheer impossibly to fulfil such an obligation on the Insurer. He
would question the correctness of the declaration.

19. Per contra, Shri Gopal Sankarnarayanan, learned Senior Counsel for the respondent would, in
the first place, draw our attention to the Report of the Investigator engaged by the appellant. He
would point out that the Report would reveal that upon being informed, the Investigator was very
much at the scene in the early morning and, still, no steps were taken to ascertain the level of the
alcohol in the blood of the driver. This adequately counters the apprehension about the
impossibility for the insurer to prove the level of alcohol. In this regard, he drew our attention to
the questions put in the interrogatories and the answers which have been received. As far as the
conviction under Section 27 9 of the IPC is concerned, he would submit that it was only a case of
plea bargaining and, more importantly, it related to rash and negligent driving under Section 27 9
of the IPC. The offence, which is pertinent to the controversial Clause, is the one contemplated
under Section 185 of the MV Act and it has not been invoked/proved against the driver. In other
words, the attempt appears to be to contend that at worst a case of rash or negligent driving may be
established, which is not the same as driving under the influence of alcohol. He also sought to draw
support from the Judgment of this Court in Bachubhai Hassanalli Karyani (supra) . The other case
law appears to be mostly Orders passed by the NCDRC itself and it appears to be on the lines,
indicated in the impugned Order itself, as noticed by us. He further pointed out that the car caught
fire as the fuel tank of the car is located in the front.

20. In Bachubhai Hassanalli Karyani (supra) , the Court was dealing with a case Inter alia under
Section 117 of the Motor Vehicles Act, 1939. This Court held as follows:

"4. The learned counsel contends that the heavy sentence has been imposed on the appellant
because he was found to have been drunk on that night. He says that Dr Kulkarni, who
examined the appellant, based his conclusion merely on the facts that the appellant's breath
was smelling of alcohol, that his gait was unsteady, that his speech was incoherent and that
his pupils were dilated. The doctor had admitted that a person, placed in the circumstances in
 which the appellant was put as a result of the accident, would be under a nervous strain and
his gait might be unsteady. The doctor had also admitted that a person could smell of alcohol
without being under the influence of drinking. No urine test of the appellant was carried out
and although the blood of the appellant was sent for chemical analysis, no report of the
analysis was produced by the prosecution.

5. It seems to us that on this evidence it cannot be definitely held that the appellant was drunk
at the time the accident occurred."

FINDINGS

21. The expression "under the influence of intoxicating liquor" does not appear to be of recent
origin in a Contract of Insurance. It has been around for quite a while. In this regard, we may notice
the judgments of the English Courts. In Mair (Administratrix) v. Railway Passengers Assurance Co.
(Limited), 1877 37 L.T. 356 DC, Lord Coleridge, the Chief Justice made the following observations,
while dealing with the very same words "under the influence of intoxicating liquor", and held as
follows:

"... I should think, speaking only for myself, that the words "under the influence of
intoxicating liquor" would be sufficiently satisfied by construing them to mean under such
influence of intoxicating liquor as disturbs the balance of a man's mind. There is a point up to
which any stimulating liquor, with most people at least, possibly benefits, at any rate for the
time, the exercise of the intellect. There is a point beyond which it certainly impedes -
disturbs it. I concede that it is very difficult even in language - certainly in the English
language - to ascertain with precision where that point is; but it is enough to say that there is
a point, and it seems to me these words would be satisfied when the influence of intoxicating
liquor is found in point of fact to be such as to disturb the quiet and equable exercise of the
intellectual faculties of the man who has taken the liquor. Of course, if I think there is
evidence to satisfy me that the intoxication in this case was enough to have gone to the point
of contributing to the accident, it follows a fortiori that it had arrived at the disturbing point
which I think, speaking for myself, would be enough to satisfy the words of the proviso..."

22. This, in fact, was not a case where a vehicle was being driven and it was alleged that the driver
was under the influence of alcohol. On the other hand, it was a case where the deceased had been
drinking for a while. In this condition he rudely accosted a woman and tried to put his arms around
her. He was knocked down by a man who was in the company of the woman. He died as a result of
the injury. The insurer sought protection under a clause which excluded liability if the assured was
under the influence of intoxication of liquor.

23. Nearly a century later, in Louden v. British Merchants Insurance Company Limited, [1961] WLR
798 QB, the plaintiff, claimed under a policy, in regard to a bodily injury suffered by her husband.
The Insurer invoked the Exclusion Clause, which again protected it in a case where the person was
under the influence of drugs or intoxicating liquor. It was a case of a motor vehicle accident, which
proved fatal for the plaintiff's husband. One of the contentions raised by the plaintiff was that the
words "sustained whilst under the influence of drugs or intoxicating liquor, were so uncertain as to
their meaning that no effect should be given to them". Lawton,J., while dealing with this contention
drew support from Mair (Administratrix) (supra) , and what is more, reiterated the principles laid
down therein. We may advert to the following:

"... The words used in the exemption clause of the policy before me have probably been used
for many years in policies giving assurance against injury. Counsel for the defendants referred
to Mair v. Railway Passengers Assurance Co. Ltd. The policy in that case provided that the
assurance should not extend to any death or injury happening while the assured was under
the influence of intoxicating liquor. The case came before Lord Coleridge C.J. and Denman J.
by way of an application for a new trial on the ground that the verdict had been against the
weight of evidence. Both judges construed the words, "whilst the assured is under the
influence of intoxicating liquor," although it may not have been necessary for the purposes of
their judgment to do so. Neither seems to have thought that the words were so uncertain as to
be incapable of construction. Both were of the opinion that these words connoted a
disturbance of the faculties, Lord Coleridge using the words "as disturbs the balance of a man'
s mind, " and Denman J. the words "disturbing the quiet, calm, intelligent exercise of the
faculties." Mr. Everett, whose experience in matters of personal injury insurance is extensive,
was unable to refer me to any case in which a different construction had been put upon these
words. In those circumstances, I find that the words are not so uncertain as to be incapable of
construction, and I adopt the constructions in Mair v. Railway Passengers Assurance Co. Ltd.,
albeit they have been expressed in mid-nineteenth century idiom. I add no gloss, as to do so
might add confusion where none may have existed amongst insurers and policy holders
during the past 84 years."

24. This was the case of alleged driving under the influence of alcohol. The deceased was travelling
in a car with a friend after having drinks (beer) . They appeared to be sober.

While so, the motor car attempted to negotiate a bend and it knocked off the Warning post and an
accident ensued, the vehicle having fallen to a ditch. The court went on to find that the blood
alcohol was 260 mg in 100 ml and in favour of the insurer.

A CASE FROM SCOTLAND

25. In Kennedy v. Smith, 1975 S.C. 266; (1975) 6 WLUK 97, decided on 20th June, 1975 by the Inner
Court of Session of Scotland from which appeal lies to the U.K. Supreme Court now, the defendant
(described as the defender) drove a car after having consumed a pint or at the most one and a half
pints of lager (a kind of beer) and an accident occurred in which two of the passengers died. In an
action by the widows, the insurer (referred to as a third party) relied upon an exception in the policy
which inter alia excluded its liability if the driver was under the influence of intoxicating liquor.
Lord President of the Court with whom the other two Judges agreed, observed as follows:

"They mean, as the Lord Ordinary accepted, "under such influence of intoxicating liquor as
disturbs the balance of a man's mind." This was the meaning given to them by Lord Coleridge
C. J. in Mair v. Railway-Passengers Assurance Co. , 1877 37 L.T. 356 in which Denman J.
referred to the condition as "disturbing the quiet calm intelligent exercise of the faculties,"
and was the meaning adopted by Lawton J. in the later case of Louden v. British Merchants
Insurance Co. Ltd., 1961 1 W.L.R. 798. The only proved facts are (i) the admitted consumption
 by the defender of one pint of lager and (ii) the happening of the accident. The Lord Ordinary
was not entitled to rely as he did upon the facts that the defender drank lager upon an empty
stomach and was unaccustomed to alcohol since there was no evidence whatever that either of
these facts made it more probable that the amount of alcohol consumed would adversely
affect the faculties of the defender. In so far as the Lord Ordinary refers to the erratic and
unexplained behaviour of the defender' s car this is only to be understood as a reference to the
movement of the car at the time of the accident as the result, according to the defender, of the
back wheels striking either the kerb or an object on the road surface. The happening of the
accident is explicable as the result of momentary inattention or loss of concentration and it is
sheer speculation to say that the defender's consumption of one or even one and a half pints
of lager had placed him under such influence of alcohol as had disturbed the balance of his
mind. They also argued that it was relevant to consider that this was a case of wholly
unexplained and extraordinary movement of the motor car which the defender had driven
accident free for some years. It was further, they said, relevant in this connection to have
regard to the plea tendered by the defender to the charge of contravening section 1 (1) of the
Road Traffic Act 1960.

In my opinion, the defender's submission in this matter is well founded. The Lord Ordinary
was not, in my view, entitled to have regard to the fact that the lager drunk by the defender
was consumed upon an empty stomach and that he was unaccustomed to alcohol. Whether or
not a particular combination of circumstances is likely to exacerbate the effects of a particular
consumption of alcohol is a matter of evidence (as was the case in Louden) . In this case there
was no evidence to show that the circumstances in question were other than neutral. In my
opinion, also, no weight can be given to the defender's plea of guilty. The Lord Ordinary gave
no weight to this. Such a plea is explicable as soon as it is remembered that even a slight
degree of carelessness may justify a conviction for driving in a manner dangerous to the
public. In these circumstances the "inference" drawn by the Lord Ordinary rests only upon (i)
proved consumption of one pint of lager and possiblyonly possibly another half pint, and (ii)
the happening of the accident as it emerged in evidence. There was not one scintilla of
evidence of any behaviour on the part of the defender, or of his car before the accident, which
pointed to the alcohol he had consumed having to any material extent affected the balance of
the defender's mind. For the exception to apply it is not enough to show that the defender had
consumed a particular quantity of alcohol shortly before a claim arose. In my opinion mere
proof that the defender had consumed at most a pint and a half of lager and that he had later
been driving the car when it left the westbound dual carriageway in the manner described,
does not justify an inference that he was at the time of the accident under the influence of
intoxicating liquor within the meaning of exception 5 (a) . The accident is consistent with
momentary inattention and to say that he was under the influence of alcohol at the time can
only, on the facts proved in this case, be speculation."

26. Lord Avonside in his concurring opinion inter alia held as follows:

"The explanation of the respondent that his rear wheels had hit something, a brick or possibly
the kerb, was either rejected by the Lord Ordinary or, at least, also pointed to negligence
influenced by drink. Plainly also the Lord Ordinary did not believe the assertion of the
 appellant that the drink he had taken did not affect his judgment. It is regrettable, in my view,
that more evidence was not led in regard to the accident. It would, I imagine, be available and
perhaps its omission was considered tactical. Be it so, the onus was on the respondent. In my
opinion, the Lord Ordinary has gone too far. There is no evidence of the likely effect of the
consumption of a not immoderate amount of low content alcohol on a person unused to drink
whose stomach may be empty. The Lord Ordinary as a judge is not, in my view, entitled to
draw a positive conclusion from such facts, without some evidence before him and there was
none. The smell of alcohol after the accident was, it is I think accepted, simply evidence of the
fact of prior consumption of alcohol. The circumstances of the accident were remarkable
enough, but could be explained by what the appellant said. That the appellant pleaded guilty
to a charge under section 1(1) of the Road Traffic Act 1960, and the Lord Ordinary seems to
make significance of this, is neither here nor there, looking to the comparatively minor degree
of negligence which the Courts have held sufficient to invoke the subsection. But looking at
the facts found at best for the respondent I see no more than that the appellant had taken
some drink for the first time in his life on an empty stomach and had very shortly thereafter
been involved in a bad accident which his previous safe record would not suggest as being
likely to happen."

27. Obviously, there are certain parallels as there are distinctions between facts of the case before
us. The similarity lies in the fact that the driver in the case before us also smelt of alcohol. The
other similarity lies in the nature of an accident. The differences, however, lie in the fact that in the
case referred to, there was evidence of the actual quantity and nature of the alcohol which was
consumed by the driver. In the case before us, there is no evidence either recording the exact nature
of alcoholic drink which was consumed by the driver and there is also no material as to the quantity
consumed by him. There is no evidence, in fact, as to the exact point of time when the alcohol was
consumed by the driver in the case before us. Whereas on the evidence adduced in the case before
the Court in the decision referred to, there was evidence as to the time when the alcohol was
consumed. Further the driver offered an explanation as to how the accident unfolded when there is
none in the case before us.

28. As far as the conviction under the Road Traffic Act, 1960, which was based on the plea of the
defendant-driver in the said case is concerned, Section 1(1) of the Road Traffic Act, 1960, may be
noticed:

"1. Causing death by reckless or dangerous driving: (1)A person who causes the death of
another person by the driving of a motor vehicle on a road recklessly, or at a speed or in a
manner which is dangerous to the public, having regard to all the circumstances of the case,
including the nature, condition and use of the road, and the amount of traffic which is actually
at the time, or which might reasonably be expected to be, on the road, shall be liable on
conviction on indictment to imprisonment for a term not exceeding five years."

29. It may be noticed that both the trial Judge as well as the Appellate Court did not lay any store by
the blood test and also the conviction and therefore what is significant is that a finding could be
rendered in an action that the insurer was not liable if the driver, in contravention of the policy was
under the influence of intoxicating liquor and the matter goes to the evidence which would support
such a finding.

30. As far as the view taken by the President of the Court that the Trial Judge was not entitled to
rely upon the fact that the defendant drank a lager upon an empty stomach, we are unable to
endorse the same. This is for the reason that there is enough material available to show that when
one drinks on an empty stomach, there is greater and faster infusion of the alcohol into the system
leading to increased Blood Alcohol Concentration (BAC) level. This is for the reason that when
liquor is consumed on an empty stomach, the liquor moves on from the stomach unobstructed into
the small intestine from where 80% of the absorption of alcohol takes place. Therefore, this does
indeed play a role in the Court assessing and finding, that given the other circumstances to support
the finding of consumption of alcohol as to whether the alcohol has contributed to the occurrence
of the accident. It is also not irrelevant to bear in mind that a person who is alcohol tolerant which
means that having become accustomed to consume liquor, the brain in particular is able to hold up
to the alcoholic consumption and deal with its effect whereas when a novice or a beginner
consumes alcohol, its consequences would be different.

THE POSITION IN THE UNITED STATES OF AMERICA

31. Interestingly, the terms in the Contract of Insurance may exclude the liability of the Insurer in
regard to liquor based on the mere consumption of the liquor and its presence in the body. In 2016
NC (10) 1939, in a claim upon a life and accidental insurance, one of the questions was whether
there was an error in the charge of the court relating to intoxicating liquor. The policy in question
did not cover any injury or death which the insured may suffer while the insured has in his or her
body, physically present intoxicating liquor or narcotics. The Supreme Court of North Carolina in
Webb v. Imperial Life Ins. Co., [Inc. 216 N.C. 10 (1939)] had to consider the legality of the charge
which the trial court had given to the jury. The Court noticed the charge as follows:

"The court further instructs you that an intoxicated person is a drunken person, a drunken
person is an intoxicated person and that means- intoxicated means in law that the subject
must have drunk of alcohol to such an extent as to appreciably affect and impair his mental or
bodily faculties or both. The court instructs you further that to be under the influence or
affected by the liquor means that the subject must have drunk a sufficient quantity to
influence or affect, however slightly, his body and his mind, his mental and physical faculties,
in other words, it all comes to this, that he has drunk, that he has intoxicating liquor in his
body to the effect that it influences his conduct detrimentally. It means the question for you is
whether the deceased at the time of his impact and death had in his body intoxicating liquor
of sufficient quantity to be intoxicated or to affect his conduct and influence his conduct and
action."

"The court further instructed the jury: "The question for you is whether the deceased at the
time of the impact and death had in his body intoxicating liquor of sufficient quantity to be
intoxicated or to affect and influence his conduct and action."

32. The Court held as follows:

 "The court further instructed the jury to answer the issue in favor of defendant if they found
by the greater weight of the evidence that the deceased had present in his body at the time of
the injury "intoxicating liquor as the court has just defined and explained intoxicating liquor;"
and again, if they found the deceased "was under the influence of alcohol or intoxicating
liquor." While the court followed this by charging the jury to answer the issue in favor of
defendant if they found deceased "had present in his body intoxicating liquor," this did not
cure the previous instruction.

Thus the learned judge inadvertently placed upon the defendant the burden not only to show
the physical presence of intoxicating liquor in the body of the insured at the time of the
injury, but also to show that he was intoxicated or under the influence of intoxicating liquor.

The defendant by the language of the policy excluded from its coverage injury suffered by the
insured while he had present in his body intoxicating liquor. This was the contract between
the parties, and the defendant was entitled to avoid liability upon proof that the insured had
in his body, physically present, any quantity of intoxicating liquor, regardless of whether he
thereby became intoxicated or not. The defendant was entitled to have the instruction to the
jury confined to the language of the policy. Payne v. Stanton, 211 N.C. 43, 188 S.E. 629.

The defendant's exceptions to the charge in the respects noted must be sustained,
necessitating a new trial.

New trial." (Emphasis supplied)

33. In Heltsley v. Life & Casualty Ins. Co. [299 Ky. 396 t(1945)], the Court of Appeal observed as
follows in regard to the similar clause in a Contract of Insurance:

"The exact language of the policy provision under consideration is: '***nor does it cover loss
or injury sustained by the insured while he was physically present in his body alcoholic or
intoxicating liquors in any degree. ***That this provision is not contrary to public policy; that
it is not susceptible of double construction or of an interpretation that the extent or degree of
intoxication is material; that it is not unreasonable, and that it does not constitute a
limitation unavailable to appellee, is amply affirmed by the authorities both local and foreign.
In Robinson & Son v. Jone, 254Ky. 637, 72 S.W.2d 16, 19, it is said: It is known of all men that
the drinking of intoxicating liquor, though it be not done to the extent of actual intoxication,
begets a spirit of recklessness, and is responsible for numerous accidents .' And in Equitable
Life Assurance Society of United States v. Adams, 259 Ky. 726, 83 S.W.2d 461, 464, It is the
duty of the courts to take the words of an insurance policy as they are found in it, and as
persons with usual and ordinary understanding would construe them when used to express
the purpose for which they were employed,***.

34. The Supreme Court of Alabama in Standard Life & Ace. Ins. Co. v. Jones 94 Ala. 434, decided in
November, 1891, had occasion to consider the question as to whether the phrase "under the
influence of intoxicating drinks" had a different connotation in law from that it carried in common
parlance. No doubt, it was a case whether a workman was covered by an insurance policy and he
met with an accidental death while he was discharging his duty as a Swtichman. We find the
following discussion:

"...To be under the influence of whiskey, is not necessarily to be intoxicated. One may well be
said to be under the influence of strong drink when he is to any extent affected by it--when he
feels it; and this condition may result from potations so small as not to impair any mental or
physical faculty, and when the passions are not visibly excited, nor the judgment or any
physical function impaired. This is very far short of intoxication, which is the synonym of
inebriety, drunkenness, implying or evidenced by undue and abnormal excitation of the
passions or feelings, or the impairment of the capacity to think and act correctly and
efficiently....

But the phrase "under the influence of intoxicating drinks," as used in policies of this
character and in this connection, has a legal significance, differing from the popular one, and
implying such influence as in reality amounts to intoxication. In a well considered case, it was
said by the Supreme Court of New York, that "to be under the influence of intoxicating liquors,
within the meaning of this policy, the insured must have drunk enough to disturb the action
of the physical or mental faculties, so that they are no longer in their natural or normal
condition. When, therefore, the defendant imposed upon persons insured by it the condition
that it would not be liable when death or injury should happen while the insured was under
the influence of liquor, the intention manifestly was to require the insured to limit its use in
such a degree as that he retained full control over his faculties of mind and body.... "

35. Therefore, an analysis of the principles as laid down both by the English Courts/Scottish Court
and decisions from the United States would persuade us to hold as follows:

The exclusion from the liability of the Insurer would depend upon the exact terms of the Insurance.
We are in this case not dealing with a third-party claim. Under the aegis of the Motor Vehicles Act,
we are not oblivious of the provisions of Section 149(2) in the unamended provisions of the Motor
Vehicles Act, 1988 which are captured in Section 150 of the present avtaar after the amendment as
regards the defences available to the Insurer regarding such claims. We are dealing with a case of
own damage and the clause which extricates the Insurer on the basis of the driver being under the
influence of alcohol, inter alia. We would find that the there are two variants. One of the models is
represented by American cases where all that required is that the person has in his body alcohol in
any degree. Under the said model, it need not influence his conduct. Under the said model, it is not
necessary for the Insurer to show that person concerned was intoxicated or under the influence of
intoxicated liquor.

36. This brings us to the other model which model is applicable in the facts of the case, viz., the
insurer must show that the person driving the vehicle was under the influence of liquor. The
contrast between the models is stark and perceptible. As far as the exclusion of the nature we are
concerned with, which requires driving of the vehicle by a person under the influence of
intoxicating liquor, it would appear to be clear that mere presence of alcohol in any small degree
would not be sufficient.
This is for the reason that the court cannot rewrite the contract and hold that the mere presence of
the alcohol, in the slightest degree, is sufficient to exclude the liability of the insurer. It requires
something more, namely, that the driver of the vehicle was at the time of the accident acting under
the influence of intoxicating liquor. Now it is clear that the decisions of the English Courts are
closer home and of assistance in the laying down of the law. It must be shown that in the facts and
circumstances of each case that the consumption of liquor had, if not caused the accident, which
undoubtedly would bring the accident within the mischief of the clause but at least contributed in a
perceptible way to the causing of the accident.

SECTION 185 OF THE MOTOR VEHICLES ACT, 1988

37. It is at this juncture that it becomes necessary to notice and deal with the argument of the
respondent under Section 185 of the Motor Vehicles Act. Section 185 of the Motor Vehicles Act,
1988 reads as follows:

" 185. Driving by a drunken person or by a person under the influence of drugs.Whoever, while
driving, or attempting to drive, a motor vehicle,

(a) has, in his blood, alcohol exceeding 30 mg. per 100 ml. of blood detected in a test by a
breath analyser, or

(b) is under the influence of a drug to such an extent as to be incapable of exercising proper
control over the vehicle,

shall be punishable for the first offence with imprisonment for a term which may extend to six
months, or with fine which may extend to two thousand rupees, or with both; and for a second
or subsequent offence, if committed within three years of the commission of the previous
similar offence, with imprisonment for term which may extend to two years, or with fine
which may extend to three thousand rupees, or with both.

Explanation.For the purposes of this section, the expression "drug" or drugs specified by the
Central Government in this behalf, by notification in the Official Gazette, shall be deemed to
render a person incapable of exercising proper control over a motor vehicle."

38. Our attention was also drawn by Mr. Gopal Sankaranarayan, learned Senior Counsel for the
respondent to the provisions under Sections 203 and 204 of the Motor Vehicles Act. Section 203 as
was extant as on the date of the accident read as follows:

"203. Breath tests.(1) A police officer in uniform or an officer of the Motor Vehicles
Department, as may be authorised in this behalf by that Department, may require any person
driving or attempting to drive a motor vehicle in a public place to provide one or more
specimens of breath for breath test there or nearby, if such police officer or officer has any
reasonable cause to suspect him of having committed an offence under section 185:

Provided that requirement for breath test shall be made (unless, it is made) as soon as
reasonably practicable after the commission of such offence.
 (2) If a motor vehicle is involved in an accident in a public place and a police officer in uniform
has any reasonable cause to suspect that the person who was driving the motor vehicle at the
time of the accident, had alcohol in his blood or that he was driving under the influence of a
drug referred to in section 185 he may require the person so driving the motor vehicle, to
provide a specimen of his breath for a breath test:

(a) in the case of a person who is at a hospital as an indoor patient, at the hospital,

(b) in the case of any other person, either at or near the place where the requirement is made,
or, if the police officer thinks fit, at a police station specified by the police officer:

Provided that a person shall not be required to provide such a specimen while at a hospital as
an indoor patient if the registered medical practitioner in immediate charge of his case is not
first notified of the proposal to make the requirement or objects to the provision of a specimen
on the ground that its provision or the requirement to provide it would be prejudicial to the
proper care or treatment of the patient.

(3) If it appears to a police officer in uniform, in consequence of a breath test carried out by
him on any person under sub-section (1) or sub-section (2), that the device by means of which
the test has been carried out indicates the presence of alcohol in the person's blood, the police
officer may arrest that person without warrant except while that person is at a hospital as an
indoor patient.

(4) If a person, required by a police officer under sub-section (1) or sub-section (2) to provide a
specimen of breath for a breath test, refuses or fails to do so and the police officer has
reasonable cause to suspect him of having alcohol in his blood, the police officer may arrest
him without warrant except while he is at a hospital as an indoor patient.

(5) A person arrested under this section shall while at a police station, be given an opportunity
to provide a specimen of breath for a breath test there.

(6) The results of a breath test made in pursuance of the provisions of this section shall be
admissible in evidence. Explanation.For the purposes of this section, "breath test", means a
test for the purpose of obtaining an indication of the presence of alcohol in a person's blood
carried out, on one or more specimens of breath provided by that person, by means of a device
of a type approved by the Central Government, by notification in the Official Gazette, for the
purpose of such a test. "

39. Section 204 again as was in existence on the date of the accident (12.12.2007) read as follows:

"204. Laboratory test.(1) A person, who has been arrested under section 203 may, while at a
police station, be required by a police officer to provide to such registered medical practitioner
as may be produced by such police officer, a specimen of his blood for a Laboratory test, if

(a) it appears to the police officer that the device, by means of which breath test was taken in
relation to such person, indicates the presence of alcohol in the blood of such person,
 (b) such person, when given the opportunity to submit to a breath test, has refused, omitted
or failed to do so:

Provided that where the person required to provide such specimen is a female and the
registered medical practitioner produced by such police officer is a male medical practitioner,
the specimen shall be taken only in the presence of a female, whether a medical practitioner
or not.

(2) A person while at a hospital as an indoor patient may be required by a police officer to
provide at the hospital a specimen of his blood for a laboratory test:

(a) if it appears to the police officer that the device by means of which test is carried out in
relation to the breath of such person indicates the presence of alcohol in the blood of such
person, or

(b) if the person having been required, whether at the hospital or elsewhere, to provide a
specimen of breath for a breath test, has refused, omitted or failed to do so and a police officer
has reasonable cause to suspect him of having alcohol in his blood:

Provided that a person shall not be required to provide a specimen of his blood for a
laboratory test under this sub-section if the registered medical practitioner in immediate
charge of his case is not first notified of the proposal to make the requirement or objects to
the provision of such specimen on the ground that its provision or the requirement to provide
it would be prejudicial to the proper care or treatment of the patient.

(3) The results of a laboratory test made in pursuance of this section shall be admissible in
evidence.

Explanation.For the purposes of this section, "laboratory test" means the analysis of a
specimen of blood made at a laboratory established, maintained or recognised by the Central
Government or a State Government."

40. We may also incidentally notice Section 205 of the MV Act. It reads as follows:

"205. Presumption of unfitness to drive.In any proceeding for an offence punishable under
section 185 if it is proved that the accused, when requested by a police officer at any time so to
do, had refused, omitted or failed to consent to the taking of or providing a specimen of his
breath for a breath test or a specimen of his blood for a laboratory test, his refusal, omission
or failure may, unless reasonable cause therefor is shown, be presumed to be a circumstance
supporting any evidence given on behalf of the prosecution, or rebutting any evidence given
on behalf of the defence, with respect to his condition at that time."

41. The Motor Vehicles Act, 1988 repealed the Motor Vehicles Act 1939. It is important to notice
certain provisions of the said Act also. Section 117 can be referred to as the provision corresponding
to Section 185 of the present Act with significant differences. Section 117 as it originally stood read
as follows:
 "117. Driving while under the influence of drink or drugs.-Whoever while driving or
attempting to drive a motor vehicle is under the influence of drink or a drug to such an extent
as to be incapable of exercising proper control over the vehicle shall be punishable for a first
offence with imprisonment for a term which may extend to three months or with fine which
may extend to five hundred rupees, or with both, and for a subsequent offence if committed
within three years of the commission of a previous similar offence with imprisonment for a
term which may extend to two years, or with fine which may extend to one thousand rupees,
or with both."

42. This provision came to be substituted by Act 27 of 1977. After its substitution as aforesaid
Section 117 the lawgiver ushered in a stricter restriction in regard to drunken driving. It read as
follows:

"117. Driving by a drunken person or by a person under the influence of drugs .

Whoever, while driving or attempting to drive, a motor vehicle or riding or attempting to ride,
a motor cycle, -

(a) Has, in his blood, alcohol in any quantity, howsoever small the quantity may be, or

(b) Is under the influence of a drug to such an extent as to be incapable of exercising proper
control over the vehicle, Shall be punishable for the first offence with imprisonment for a term
which may extend to six months, or with fine which may extend to two thousand rupees or
with both; and for a second or subsequent offence, if committed within three years of the
commission of the previous similar offence, with imprisonment for a term which may extend
to two years, or with fine which may extend to three thousand rupees, or with both.

In fact, prior to present Section l85 of the Motor Vehicles Act being substituted by Act 54 of 1994,
Section 185 was similarly worded as Section 117 of the Motor Vehicles act 1939, as substituted in
1977.

43. It will be noticed immediately that the decision of this Court rendered in Bachubhai Hassanalli
Karyani v. State of Maharashtra, (1971) 3 SCC 930 relied upon by the respondent arose under
Section 117 of Motor Vehicles Act, 1939 which required not merely that the person was under the
influence of drink but it was to be to such an extent as to render him incapable of exercising proper
control over the vehicle. Section 117 after its substitution in 1977, on the other hand, carved out a
criminal offence insofar as alcohol is concerned, on the basis that the driver had in his blood,
alcohol in any quantity, however small the quantity was. This was similar in fact to the clauses in
the contracts of insurance obtaining in the United States which we have referred to (supra) . No
doubt, this became associated with the presence of the smallest quantity of alcohol in the blood. As
far as Section 185 of the Motor Vehicles Act, 1988 is concerned, the offence is committed if there is
a specified amount of alcohol found namely, 30 mg in 100 ml. of blood. In this regard, we may
profitably refer to the law in the United Kingdom corresponding to the Motor Vehicles Act and also
an early decision of the Bombay High Court interpreting a statute dealing with the issue.

THE U.K. ROAD TRANSPORT TRAFFIC ACT, 1930 AND LATER ENACTMENTS
44. In the U.K. Road Transport Traffic Act, 1930, Section 15(1) made it an offence to drive or attempt
to drive or to be in charge of a motor vehicle while under the influence of drink or drug to such an
extent as to be incapable of having proper control of the vehicle'. Section 11 provided for
punishment for dangerous driving. In (1931) 22 Cr. App 172, the appellant was convicted under
Section 15 and acquitted under Section 11. The Court held as follows:

"... We have considered that finding with great care, but, upon the whole, and not without
hesitation, we have come to the conclusion that. notwithstanding the summing up, it is
ambiguous. The jury ought to have been asked whether they meant-by their last answer that
the appellant was under the influence of drink to such an extent as to be incapable of having
proper control of the vehicle, and we cannot reject the view that, if that question had been
pointedly put, they might have answered in the negative or said that they were not agreed on
that point. ..."

45. This view appears to hold good even now. In other words, being under the influence of alcohol is
different from being under the influence of alcohol to the extent as declared in such a provision.
However statutory changes that occurred make it irrelevant.

46. In this regard, it is pertinent to note the decision of the High Court of Bombay reported in
Emperor vs. Rama Deoji, AIR 1928 BOM 231. Rule 27-A of the Motor Vehicles Rules provided that
"no person shall, when intoxicated, drive a motor vehicle in a public place." The contention raised
by the accused was that his conviction was improper as the charge actually was merely one of being
under the influence of liquor. There is a distinction between being under the influence of liquor and
being intoxicated, it was contended. The Court held, inter alia, as follows:

"4. In our opinion the word "intoxicated" cannot be read in this very extreme sense. It in fact
corresponds with the word "drunk" that is generally used in similar English enactments. No
doubt, there has been a good deal of controversy in England as to when a person can properly
be said to be drunk, and a distinction has been made between his being drunk and his being
merely under the influence of liquor. I do not, however, think it is necessary for us in this
particular case to go into any controversy of that kind. The fact remains that the words "under
the influence of liquor" do sufficiently represent the meaning of the word "intoxicated," except
that it may be said that the latter word expresses a degree of influence which is not
sufficiently expressed in the words "under the influence of liquor." But this question of degree
is one that is at any rate involved in the words; and if the accused intended to assert that he
was not under the influence of liquor to a degree that really mattered in regard to his
exercising due care and judgment in driving the car, then that should have been stated by the
accused clearly, so as to raise an issue on the point. On the contrary he pleaded guilty; and in
view of the fact that his act in suddenly swerving was one of extreme rashness, as admitted by
Mr. Bhandarkar himself, the circumstances clearly point to the accused's understanding that
he was pleading guilty to a degree of intoxication which would bring the case under this rale.
There has, in our opinion, been no misapprehension of the accused, so as to justify our
holding that he did not plead guilty to a breach of this particular rule." (Emphasis supplied)
47. The Road Traffic Act, 1960 repealed the Act in 1930. Section 6(1) of the 1960 Act penalised
driving by a person who was unfit to drive through drink or drugs. Section 6(6) reads as follows:

"6(6) In this section "unfit to drive through drink or drugs" means under the influence of drink
or a drug to such an extent as to be incapable of having proper control of a motor vehicle."

By the Road Traffic Act, 1962, however unfitness was linked with being "impaired".

48. For the first time, objective scientific testing became the basis for the offence of driving while
having drunk alcohol in 1967 under the Road Safety Act, 1967. Section 1 penalised driving on a road
or other public place having consumed alcohol in such quantity that its proportion in the blood, as
ascertained through the blood test, exceeded the prescribed limit, which was provided as 80 mg. of
alcohol in 100 ml. of blood (0.08 %) . Thereafter, the Road Safety Act, 1988 came into force.

49. The provisions of relevance in the latest enactment, that is the Act of 1988 are Sections 3A, 4
and 5. Section 3A, inserted with effect from 01.07.1992, reads as follows:

"3A. Causing death by careless driving when under influence of drink or drugs.

(1) If a person causes the death of another person by driving a mechanically propelled vehicle
on a road or other public place without due care and attention, or without reasonable
consideration for other persons using the road or place, and

a) he is, at the time when he is driving, unfit to drive through drink or drugs, or

b) he has consumed so much alcohol that the proportion of it in his breath, blood or urine at
that time exceeds the prescribed limit, or

ba) he has in his body a specified controlled drug and the proportion of it in his blood or urine
at that time exceeds the specified limit for that drug, or

c) he is, within 18 hours after that time, required to provide a specimen in pursuance of
section 7 of this Act, but without reasonable excuse fails to provide it, or

d) he is required by a constable to give his permission for a laboratory test of a specimen of

blood taken from him under section 7A of this Act, but without reasonable excuse fails to do
so, he is guilty of an offence.

(2) For the purposes of this section a person shall be taken to be unfit to drive at any time
when his ability to drive properly is impaired.

(3) Subsection (1) (b) , (ba) , (c)and (d)above shall not apply in relation to a person driving a
mechanically propelled vehicle other than a motor vehicle." (Emphasis supplied)

Sections 4(1) and 4(5) read as follows:

"4. Driving, or being in charge, when under influence of drink or drugs.

 (1) A person who, when driving or attempting to drive a mechanically propelled vehicle on a
road or other public place, is unfit to drive through drink or drugs is guilty of an offence.

XXX XXX XXX

(5) For the purposes of this section, a person shall be taken to be unfit to drive if his ability to
drive properly is for the time being impaired." (Emphasis supplied)

Section 5 reads as follows:

"5. Driving or being in charge of a motor vehicle with alcohol concentration above prescribed
limit.

(1) If a person -

(a) Drives or attempts to drive a motor vehicle on a road or other public place, or

(b) Is in charge of a motor vehicle on a road or other public place,

After consuming so much alcohol that the proportion of it in his breath, blood or urine
exceeds the prescribed limit he is guilty of an offence.

(2) It is a defence for a person charged with an offence under subsection (1)(b) above to prove
that at the time he is alleged to have committed the offence the circumstances were such that
there was no likelihood of his driving the vehicle whilst the proportion of alcohol in his
breath, blood or urine remained likely to exceed the prescribed limit.

(3) The court may, in determining whether there was such a likelihood as is mentioned in
subsection (2) above, disregard any injury to him and any damage to the vehicle." (Emphasis
supplied)

50. Section 3A was inserted w.e.f. 01.07.1992. A perusal of Sections 3A, 4 and 5 of the Road Traffic
Act, 1988, and comparing it with Section 185 of the MV Act, 1988, yields the following results:

The provision, in the British Act, which is comparable to Section 185 of the Indian Act, is Section 5.
This is for the reason that Section 5 also penalises driving or attempting to driving a motor vehicle
on a road or other public place, after consuming alcohol and when the proportion in his breath is in
excess of the prescribed limit. There is no provision in the Motor Vehicles Act, 1988 corresponding
to Section 4 of the Road Traffic Act. In other words, in the U.K., apart from driving or attempting to
drive a vehicle, having consumed alcohol, with a blood alcohol level in excess of the prescribed
percentage, being an offence, it is also an offence to drive or attempt to drive a vehicle on a road or
a public place, if the person is unfit to drive due to drink or drugs. Section 4(5) of the Road Traffic
Act, 1988, makes it clear that a person shall be taken as unfit, if his ability to drive is for the time
being, impaired. Section 6B, in fact, provides for a preliminary impairment test, which primarily
consists of tasks to be performed by the person driving. What we are pointing out is, a person under
the law in England, could, if by consumption of alcoholic drink, be impaired, in his ability to drive
properly, then, irrespective of whether he has a blood alcohol level in excess of or below the
prescribed level, he would commit an offence. The same principle animates Section 3A, which
speaks about an offence upon death following an accident, when he was driving the vehicle, while
being unfit to drive through consumption of alcoholic drink. Here again, Section 3A(2) makes it
clear that unfitness to drive, on account of consumption of liquor, is predicated on the driver's
ability to drive properly, being impaired. This is also to be determined by the impairment test,
apparently held under Section 6B. We would find that a person can be said to be under the influence
of alcohol, if his faculties are so disturbed that his driving abilities, is impaired. This concept of law
is essentially following up on what has been laid down by the court in in Mair (Administratrix)
supra. Cases can arise where there is a clause of the nature we are dealing with, viz., excluding the
liability of the insurer, when the driver is under the influence of alcohol, in vastly different
circumstances. A 21-year-old, who is otherwise licenced to drive a vehicle, may experiment with
drinking in the company of his friends. He may consume a small quantity of liquor. This may not
satisfy the requirement of alcohol present in the blood (30 mg./l00 ml. = 0.03%). However, it is
unquestionable that the impact of the drink on the person, may be demonstrated to be that he is
unable to drive in the manner in which he would have driven, had he not taken that small drink. In
such a case, to insist that he cannot be under the influence of alcohol, unless, he has in his blood,
the requisite percentage of alcohol under Section 185 of the MV Act, would be to make a new
bargain for the parties and also to rewrite the contract. To be under the influence of alcohol, in
other words, must be understood as, a question going to the facts and a matter to be decided with
reference to the impact of consumption of alcohol on the particular driver. Yet another example will
throw light on a seemingly vexed issue. A person, who drinks on an empty stomach, would
necessarily have a faster rate of the alcohol making its presence in the blood, and consequently, in
the brain. A person, on the other hand, who has had food along with the alcohol, may manifest the
effect of alcohol later. The effects of drinking alcohol, in terms of external signs, have been
described by Modi in his work - Modi's Medical Jurisprudence and Toxicology. They are as follows:

"In order to ascertain whether a particular individual is drunk or not, a medical practitioner
should bear the following points in mind:

1. The quantity taken is no guide.

2. An aggressive odour of alcohol in the breath, loss of clearness of intellect and control of
himself, an unsteady gait, a vacant look, dry and sticky lips, congested eyes, sluggish and
dilated pupils, increased pulse rate, an unsteady and thick voice, talking at random and want
of perception of the passage of time, are the usual signs of drunkenness. However, the smell of
an alcoholic drink can persist in the breath for many hours after the alcohol has been excreted
from the body, as it is due to non-alcoholic constituents (congeners) in the drink."

51. If in a case, without there being any blood test, circumstances, associated with effects of
consumption of alcohol, are proved, it may certainly go to show that the person who drove the
vehicle, had come under the influence of alcohol. The manner, in which the vehicle was driven, may
again, if it unerringly points to the person having been under the influence of alcohol, be reckoned.
Evidence, if forthcoming, of an unsteady gait, smell of alcohol, the eyes being congested, apart
from, of course, actual consumption of alcohol, either before the commencement of the driving or
even during the process of driving, along with the manner in which the accident took place, may
point to the driver being under the influence of alcohol. It would be a finding based on the effect of
the pleadings and the evidence.

52. A conspectus of the aforesaid provisions would lead us to the following conclusions:

Section 185 of the Motor Vehicles Act creates a criminal offence. The short title of Section 185
undoubtedly proclaims that it purports to deal with driving by a drunken person or by a person
under the influence of drugs. The offence as far as driving by a drunken person is concerned, was
built around breach of an objective standard, viz., the presence of alcohol in the driver in excess of
30 mg per 100 ml. of blood detected in a test of breath analyser. The Section mandates the proving
of the objective criteria of presence of alcohol exceeding 30 mg per 100 ml. of blood in a test by a
breath analyser. It is here that Section 203 of the Motor Vehicles Act becomes apposite. It empowers
the police officer to require any person driving or attempting to drive motor vehicle in a public
place to provide one or more specimen of breath for breath test, if Police Officer or Officer of Motor
Vehicle Department has reasonable cause to suspect the driver has committed an offence u/s 185.
Section 203(2) deals with the situation where the vehicle is involved in an accident in a public place.
In such circumstances, on a Police Officer in uniform entertaining any reasonable cause to suspect
that the person driving the vehicle, at the time of the accident, had alcohol in his blood, inter alia,
he may require the person to provide specimen of his breath in the breath test in the manner
provided. Section 203(6) declares that the result of the breath test made under Section 203 shall be
admissible in evidence. Section 203 contemplates arrest without warrant being effected, if the test
indicated the presence of alcohol in the breath test. Section 204 follows up on a person who is
arrested under Section 203. It, inter alia, provides that a person who has been arrested under
Section 203 is to provide to such medical practitioner as may be produced by such police officer, a
specimen of his blood for a laboratory test, if either it appears to the police officer that the breath
test reveals the presence of alcohol in the blood of such person or such person when given the
opportunity to submit to a breath test, has refused, omitted or failed to do so. The result of the
laboratory test is also made admissible.

53. It is clear that Section 185 deals with driving or attempting driving of a motor vehicle a person
with alcohol in excess of 30 mg per 100 ml in blood which is detected in a test of breath analyser.
Being a criminal offence, it is indisputable that the ingredients of the offence must be established
as contemplated by law which means that the case must be proved beyond reasonable doubt and
evidence must clearly indicate the level of alcohol in excess of 30 mg in 100 ml blood and what is
more such presence must be borne out by a test by a breath analyser. We may also notice that with
effect from 01.09.2019, the following words have been added to Section 185, that is "or in any other
test including laboratory test".

54. It is to be noticed that this Court had occasion to deal with the question whether the
prosecution under section 185 can succeed in the absence of a test by a breath analyser. In the
decision reported in State through PS Lodhi Colony v. Sanjeev Nanda, 2012 (8) SCC 450, the accused
escaped from the scene of occurrence. He could not, therefore, be subjected to breath test analyser
instantaneously or to provide a specimen of his breath for a breath test or a specimen for his blood
for a laboratory test. Dealing with these provisions, K.S. Radhakrishnan, J. , in his concurring
judgment has held as follows:
 "82. The accused, in this case, escaped from the scene of occurrence, therefore, he could not
be subjected to breath analyser test instantaneously, or to take or provide specimen of his
breath for a breath test or a specimen of his blood for a laboratory test. The cumulative effect
of the provisions, referred to above, would indicate that the breath analyser test has a
different purpose and object. The language of the above sections would indicate that the said
test is required to be carried out only when the person is driving or attempting to drive the
vehicle. The expressions "while driving" and "attempting to drive" in the above sections have a
meaning "in praesenti". In such situations, the presence of alcohol in the blood has to be
determined instantly so that the offender may be prosecuted for drunken driving. A breath
analyser test is applied in such situations so that the alcohol content in the blood can be
detected. The breath analyser test could not have been applied in the case on hand since the
accused had escaped from the scene of the accident and there was no question of subjecting
him to a breath analyser test instantaneously. All the same, the first accused was taken to
AIIMS Hospital at 12.29 p.m. on 10-1-1999 when his blood sample was taken by Dr Madhulika
Sharma, Senior Scientific Officer (PW 16) . While testing the alcohol content in the blood, she
noticed the presence of 0.115% weight/volume ethyl alcohol. The report exhibited as PW-16/A
was duly proved by the doctor. Over and above, in her cross-examination she had explained
that 0.115% would be equivalent to 115 mg per 100 ml of blood and deposed that as per traffic
rules, if the person is under the influence of liquor and alcohol content in blood exceeds 30 mg
per 100 ml of blood, the person is said to have committed the offence of drunken driving.

83. Further, the accused was also examined in the morning of 10-1-1999 by Dr T. Milo, PW 10,
Senior Resident, Department of Forensic Medicine, AIIMS, New Delhi who reported as follows:

"On examination, he was conscious, oriented, alert and cooperative. Eyes were congested,
pupils were bilaterally dilated. The speech was coherent and gait unsteady. Smell of alcohol
was present."

84. Evidence of the experts clearly indicates the presence of alcohol in blood of the accused
beyond the permissible limit, that was the finding recorded by the courts below. The
judgments referred to by the counsel that if a particular procedure has been prescribed under
Sections 185 and 203, then that procedure has to be followed, has no application to the facts
of this case. The judgments rendered by the House of Lords were related to the provision of
the Road Safety Act, 1967, the Road Traffic Act, 1972, etc. in UK and are not applicable to the
facts of this case."

55. No doubt in the case noted above, the presence of the alcohol content was much more (that is
0.115% than the permissible limit).

It is also the case where the accident caused the deaths of six persons. The above view, no doubt,
turned on the facts which rendered the taking of the test by breath analyser impossible. It was also
found that the first accused had been taken to the All India Institute of Medical Science (AIIMS) at
12.29 p.m. on 10.01.1999 and the blood samples revealed alcohol far in excess of the limit indicated
in Section 185. Also, after the judgment, with effect from 01.09.2019, a laboratory test or any other
test aids the prosecution to establish a case under section 185.
56. We have set out the provisions of Sections of 185, 203 and 204 to deal with the argument of the
parties based on the impact of these provisions, upon the operation of exclusion clause of the
Contract of Insurance in a case, which does not involve any third party. The Contract of Insurance,
in the present case, is a comprehensive Contract of Insurance dealing with own damage and, no
doubt, also third party. What is, however, involved in this case, is the liability alleged with the
Insurer under Clause (A) , which deals with own damage.

57. In regard to a claim involved in this case as aforesaid, we are of the view that there is nothing in
law which would otherwise disentitle the appellant from setting up the case that the exclusion
clause would disentitle the respondent from succeeding. As to whether it is a case of driving of the
vehicle under the influence of the alcohol is different matter, altogether. The requirement of
Section 185 is in the context of a criminal offence. While it may be true that if there is a conviction
under Section 185, it would, undoubtedly, fortify the Insurer in successfully invoking Exclusion
Clause 2(c), is the reverse also true? We expatiate. If prosecution has not filed a case under Section
185, that would not mean that a competent Forum in an action alleging deficiency of service, under
the Consumer Protection Act, is disabled from finding that the vehicle was being driven by the
person under the influence of the alcohol. The presence of alcohol in excess of 30 mg per 100 ml. of
blood is not an indispensable requirement to enable an Insurer to successfully invoke the clause.
What is required to be proved is driving by a person under the influence of the alcohol. Drunken
driving, a criminal offence, under Section 185 along with its objective criteria of the alcohol-blood
level, is not the only way to prove that the person was under the influence of alcohol. If the Breath
Analyser or any other test is not performed for any reason, the Insurer cannot be barred from
proving his case otherwise.

58. What we are dealing in this case is, construction of words in a contract between the parties.
There is no case for the respondent that the terms of the contract to exclude the liability of the
appellant, are in any way illegal. We can without difficulty imagine a circumstance in which the
proposition that should the Insurer fail to establish a case in terms of Section 185 BAL (Blood
Analyser Test) , it would fail, may not be the proper approach to the issue. It is not difficult to
contemplate that the accident may take place with the driver being under the influence of alcohol
and neither the Breath Test nor the laboratory test is done. A driver after the accident, may run
away. A test may never be performed. However, there may be evidence available which may indicate
that the vehicle in question was being driven at the time of the accident by a person under the
influence of alcohol. It cannot then be said that merely because there is no test performed, the
Insurer would be deprived of its right to establish a case which is well within its rights under the
contract.

A FEW SCIENTIFIC ASPECTS ABOUT ALCOHOL

59. In Modi's Medical Jurisprudence and Toxicology, 26th Edition, it is, inter alia, stated:

"Pure ethyl alcohol is a transparent, colourless, mobile and volatile liquid, having a
characteristic spirituous odour and a burning taste.

Ethyl alcohol exists in alcoholic beverages in varying proportions. Absolute alcohol (alcohol
dehydratum) contains 99.95 percent of alcohol.
Alcohol acts differently on different individuals and also on the same individual at different
times. The action depends mostly on the environment and temperature of the individuals and
upon the degree of dilution of the alcohol consumed. The habitual drinker usually shows
fewer effects from the same dose of alcohol.

Alcohol acts differently on different individuals and also on the same individual at different
times. The action depends mostly on the environment and temperature of the individuals and
upon the degree of dilution of the alcohol consumed. The habitual drinker usually shows
fewer effects from the same dose of alcohol.

Widmark's Formula.The basis for calculating the approximate quantity of alcohol in the body,
after equilibrium between the blood and tissues has been reached, is by Wid-mark's formula: a
= cpr

(i) a represents the amount of alcohol expressed in grams.

(ii) c, the amount of alcohol in grams per kg estimated in the blood.

(iii) p is the weight of the person in kg, and

(iv) r is the value obtained by dividing the average concentration of alcohol in the body by the
concentration of alcohol in the blood. This is constant and the average is + 0.085 for men and
+ 0.055 for women.

For a male with a body weight of 69.85 kg and assuming average alcohol content, having
45 mg/100 mL of alcohol in urine, the minimum amount consumed must be 2 fluid oz of
whisky (70 per cent proof = 9.98 g/fluid oz) and with 55 mg in blood or 73 mg/100 mL in
urine, the minimum amount of beer consumed must be 1 pints (ordinary beer = 14.7
g/pint)."

"For a male with a body weight of 69.85 kg and assuming average alcohol content, having 45
mg in the blood or 60 mg/100 mL of alcohol in urine, the minimum amount consumed must be
2 fluid oz of whisky (70 per cent proof = 9.98 g/fluid oz) and with 55 mg in blood or 73 mg/100
mL in urine, the minimum amount of beer consumed must be 1 pints (ordinary beer = 14.7
g/pint)."

[We may profitably remind ourselves in Kennedy v. Smith (See paragraph 25 of the judgment),
it was a case of one and a half pints of lager (a kind of beer) and it would have meant today 55
mg/100 ml well over the 30 mg/100 ml limit in India.]

" Taken orally, alcohol is quickly absorbed as it is, by simple diffusion mostly from the small
intestine, less than 20 per cent from the stomach and circulates in the blood. The absorption
of alcohol is facilitated if it is swallowed rapidly in a concentrated solution on an empty
stomach, and it is delayed if a weaker solution is slowly drunk while the stomach is full of
food; particularly, if it is fatty or contains much proteins. Seventeen to twenty per cent of
ingested alcohol may not be absorbed in the blood stream if there is food in the stomach. The
rate of absorption of 6 per cent alcohol is 4.7mL/minute. Even drinks mixed with carbonated
 soda increase absorption. Milk is a potent factor in delaying the absorption of alcohol. Alcohol
reaches its maximum concentration in the blood within approximately 30 minutes to about 2
hours after it is taken and thus concentration is ordinarily proportional to the amount
consumed. While the concentration of alcohol that is excreted in the urine reaches its
maximum level in about 20-25 minutes later than in the blood, the range of the fall is parallel
to the fall in the level of alcohol in the blood. The concentration of alcohol in the urine is
usually 20-30 per cent higher than that in the blood and is fairly constant. The distribution of
alcohol after absorption is throughout the fluids and tissues of the body in proportion to their
water content and is the least in fat and bones.

The peculiar feature of metabolism of alcohol is that a fix quantity of alcohol is metabolised in

unit time. This is called the zero order kinetic of metabolism (most of the drugs are
metabolised by first order kinetics where a certain proportion of the drug is metabolised and
the absolute quantity metabolised quantity will go on decreasing as the blood level decreases)
. About 90 per cent of the consumed alcohol is metabolised in the body, chiefly by oxidation in
the liver, which contains the enzyme alcohol dehydrogenase @ about 9-15 mL/hour which is
equal to about half a peg of whisky. The result is lowering of alcohol in blood by about 12-15
mg/hour.

XXX XXX XXX

Alcohol from the blood passes into the alveolar air through the lungs and during the active
absorption stage, a breath analysis will give reliable information. ..." (Emphasis supplied)

60. The learned Author discusses about acute alcohol intoxication'. He also talks about chronic
poisoning of habitual drinker. We may, at once, observe that under the Exclusion Clause, the Court
need not be detained by either condition. In other words, it is not necessary for the Insurer to
establish that there was acute alcohol intoxication and equally, it need not be shown that the
vehicle was driven by a person who was a chronic alcoholic. All that is required is to show that at
the time of driving the vehicle, resulting in the accident, the driver was under the influence of
alcohol. In this regard, we may notice the following observations of Modi:

" In the order to ascertain whether a particular individual is drunk of not, a medical
practitioner should bear the following points in mind:

1. The quantity taken is no guide.

2. An aggressive odour of alcohol in the breath, loss of clearness of intellect and control of
himself, an unsteady gait, a vacant look, dry and sticky lips, congested eyes, sluggish and
dilated pupils, increased pulse rate, an unsteady and thick voice, talking at random and want
of perception of the passage of time, are the usual signs of drunkenness. However, the smell of
an alcohol drink can persist in the breath for many hours after the alcohol has been excreted
from the body, as it is due to non-alcoholic constituents (congeners) in the drink." (Emphasis
supplied)
61. We notice that Blood Alcohol Concentration or BAC is, thus, the concentration of alcohol in a
person's blood. In India, the permissible BAC level is pegged at 30 mg of alcohol in 100 ml. of blood
in Section 185 of the MV Act, 1988.

This corresponds to 0.03 percentage of alcohol in the blood, beyond which, it is an offence under
Section 185 to drive or attempt to drive as declared. As noticed, BAC is correlated to a number of
variables. It is affected by gender and body weight. The male has more water content than a female.
On same quantity drunk, the latter builds up greater BAC than the former. BAC is also affected
clearly on whether the person drank on an empty stomach or not. The liver metabolises ordinarily a
standard drink at the rate of a drink in an hour. The frequency, at which the drinks are taken,
impacts the BAC level. Even the genes play their part.

THREE REPORTS

62. In the United States of America, in fact, a Report to the Congress on Driving under the influence
and relating to alcohol limits given by the Department of Transportation, National Highway Safety
Administration, in October, 1992, states as follows, inter alia:

"EXECUTIVE SUMMARY

Current law defines the danger of driving under the influence of alcohol in two ways. First, it
is illegal in all states to drive while impaired by alcohol at any BAC level. For example, any
person who is observed driving in an unsafe manner and found to have been drinking, can be
charged for driving under the influence of alcohol regardless of actual BAC.

In addition, there are basically two types of laws for the driving public that specify BAC limits.
"Presumptive" 2 laws state that if an individual is driving at or above a given BAC, it is
presumed that the driver is impaired or intoxicated, but the presumption is open to rebuttal in
court. "Per se" laws make it illegal by (or in) the act itself to drive if one' s BAC is at or over ' a
specified BAC. The per se BAC level is 0.10 in 41 states and the District of Columbia and is 0.08
in 5 states. Four states have only a presumptive limit of 0.10. The laws in some states presume
that a person is not impaired if their BAC is 0.05 or below.

CHAPTER II. ALCOHOL. EFFECTS

The first report to Congress reviewed the scientific literature on the influence of BAC on driver
performance and the relationship between BAC level and crashes. The evidence from these
two areas was integrated to draw a number of conclusions about alcohol effects and BAC
levels, especially those below 0.10. Among the major conclusions were:

There is no threshold for alcohol impairment, i.e, there is no lower level at which impairment
starts, or below which no impairment is found.

The greater the amount of alcohol, the greater the degree of impairment on a given task, the
more functions (or different kinds of tasks) that are impaired, and the greater the risk of a
crash." (Emphasis supplied)
63. Therefore, the presumptive laws provide for presumptive limits for alcohol consumption,
contravening which, would result in the presumption subject to it being rebuttable, that a person
was driving under the influence of alcohol. As of now, in the United States of America, the
presumptive limit, which was initially reduced from 0.15 to 0.10, has been further reduced in almost
all the States to 0.08. In fact, there are lower BAC (Blood Alcohol Concentration) levels or zero
tolerance levels, for under aged drivers.

64. In another paper brought out by the U.S. Department of Transportation in July, 1998, dealing
with the effects of low doses of alcohol on driving related skills, a review of the evidence', the study
used 177 citations. Driving is a multitask skill. Driving involves performance of various tasks. It
includes psycho-motor skills, perception, visual function, information processing, concentrated
attention, divided attention, reaction and tracking. The Report finds as follows: "It seems there is
no lower threshold level, below which impairment does not exist for alcohol": The conclusion and
Recommendations read as follows:

"CONCLUSIONS AND RECOMMENDATIONS

The aim of the present review was to consider alcohol effects on aspects of skilled
performance related to driving, with a view to assessing the extent of impairment caused by
low doses of alcohol. The evidence reviewed here indicates that alcohol does not uniformly
impair all aspects of performance. Areas such as oculomotor function and divided attention
performance demonstrate that impairment can occur at BACs as low as 0.02%. It is clear,
moreover, that BACs of 0.05% or more impair nearly all of the important components of driver
performance. In assessing the minimum BACs required to produce performance decrements
relevant to driving, it can be noted that for most of the performance areas discussed here
impairment has been reported at BACs between 0.01 and 0.02%. Unfortunately, relatively few
studies have investigated the effects of BACs below 0.04%, so that information about the
behavioral impairment at BACs below 0.04% is less available than at 0.05% and above. There is
sufficient evidence, however, to demonstrate that BACs of 0.05% and more produce
impairment of the major components of driver performance: reaction time, tracking, divided
attention performance, information processing, oculomotor functions, perception, and other
aspects of psychomotor performance. The few studies on alcohol-aggression effects are
consistent with frequent reports by police officers of hostile behaviors exhibited by offenders.
The present review has worked from the model provided by Moskowitz (1973a,b), which
suggested that driving is a time sharing task, the principal components of which are tracking
and visual search and recognition. It is clear that BACs of 0.05% or more impair both of these
individual skill components and, at lower levels, also impair the combination of these skills in
a divided attention situation. Higher BAC levels (for example, those over 0.10%) also show
consistent impairment effects. Evidence from studies of alcohol on actual driving tasks
demonstrates that driver performance is similarly affected. Thus, the weight of existing
empirical evidence is considered sufficient to scientifically justify the setting of legal BAC
limits at 0.05% or lower. Research on BACs below 0.05% should be encouraged. As noted,
there is extensive evidence of performance impairments at these lower BACs, but further
studies would permit better definition of the BAC levels at which impairment first appears for
different behavioral areas . ..." (Emphasis supplied)
65. We deem it appropriate also to refer to "Report of the Review of Drink and Drug Driving Law"
which was submitted in the year 2010 in the U.K. The Road Safety Act, 1961, makes it an offence in
the U.K. to drive inter alia a vehicle with a blood-alcohol concentration in excess of 80 mg. of
alcohol per 100 ml. of blood. The Government appointed Sir Peter North, CBE, Q.C. to enquire and
submit a Report as to whether there was need to reduce the limit. The Report, inter alia, states as
follows:

" Research findings

3.26. The Centre for Public Health Excellence of the National Institute of Health and Clinical
Excellence (NICE) has recently conducted an extensive independent review of the literature
which was commissioned by the Department for Transport. 34 The review aimed to assess how
effective the blood alcohol concentration (BAC) laws are at reducing road traffic injuries and
deaths. It also assessed the potential impact of lowering the BAC limit from 80 mg/100 ml to
50 mg/100 ml.

Drink driving and the risk of a road traffic accident

3.29. NICE concluded that there is strong evidence that someone's ability to drive is affected if
they have any alcohol in their blood. Studies consistently demonstrate that the risk of having
an accident increases exponentially as more alcohol is consumed. Drivers with a BAC of
between 20 mg/100 ml and 50 mg/100 ml have at least a three times greater risk of dying in a
vehicle crash than those drivers who have no alcohol in their blood. This risk increases to at
least six times with a BAC between 50 mg/100 ml and 80 mg/100 ml, and to 11 times with a
BAC between 80 mg/100 ml and 100 mg/100 ml.

3.30. Younger drivers are particularly at risk of crashing whenever they have consumed alcohol
-whatever their BAC level - because they are less experienced drivers, are immature and have a
lower tolerance to the effects of alcohol than older people. Younger drivers may also be
predisposed to risk-taking -regardless of whether or not they have drunk alcohol.

Breath testing devices - Non-evidential , fixed evidential and portable evidential

3.69. The first practical device for the analysis of alcohol in human breath was developed in
the USA in the mid-1950s. The Breathalyzer® instrument gained wide acceptance and was
used in traffic law enforcement by police officers in the USA, Canada and Australia over many
years.93 The Breathalyzer® provided a non-intrusive way to determine the driver's BAC
although European nations showed no interest in this method for forensic purposes and
instead determined alcohol in blood as evidence for prosecution of drunken drivers. Interest
in Europe in evidential breath-alcohol testing arose in the 1980s when more compact,
automated and reliable instruments became available.

In Chapter 4: Drink driving -Conclusions and recommendations, following conclusions have

been noted: Lowering the current blood alcohol limit from 80 mg/100 ml to 20 mg/100 ml

4.6. As paragraph 1.23 sets out, a blood alcohol concentration (BAC) limit of 20 mg/100 ml is
effectively a zero tolerance level. The NICE Report provides clear evidence that a person's
 ability to drive is affected after consuming any amount of alcohol. A driver who has a BAC of
between 20 mg/100 ml and 50 mg/100 ml is at least 3 times more likely to die in a road traffic
accident than a person who has no alcohol in their body.

4.7. In consideration of this evidence, there is clearly merit and sense in a general BAC limit,
applicable to all, of 20 mg/100 ml. It is also recognised that a limit of 20 mg/100 ml is
consistent with the absolutely correct and necessary do not drink and drive message. Indeed, a
number of European countries including Sweden, Poland and Belgium have adopted a 20
mg/100 ml, or close to 20 mg/100 ml, BAC limit. The Review also noted with interest the vote
in support of a zero tolerance drink drive limit at the Royal College of Nursing's annual
conference in April 2010."

66. We may observe here, no doubt that, the age bracket for younger driver appears to be 17-24
years going by para 3.10 of the report. The committee recommended for a reduction of the BAC
level to 50 mg of alcohol in 100ml of blood.

TWO ARTICLES EFFECT OF ALCOHOL ON BRAIN DEVELOPMENT BY FARHIN PATEL AND PAL
ASH MANDAL

67. "When people consume alcohol, about 20% is absorbed in the stomach and almost 80% is
absorbed in the small intestine. Alcohol absorption is related to the two main factors:

a. Concentration of alcohol and

b. Heavy meal consumption before drinking. An empty stomach will fasten the alcohol
absorption."

68. "Absorbed alcohol enters the blood stream and is carried all through the body. Upon reaching
the body, simultaneously the body works to eliminate it. The 10% of alcohol is removed by the
kidneys (urine) and lungs (breath) . Left-out alcohol is oxidized by the liver, converting alcohol into
acetaldehyde first and then further converted to acetic acid."

HOW DOES ALCOHOL ACT AT THE NEUROLOGICAL LEVEL?

69. " Brain chemistry is affected by alcohol through alteration of neurotransmitters.

Neurotransmitters are chemical messengers that send out the signals all through the body and
control thought processes, behaviour and sensation processes. Neurotransmitters are either
excitatory (excite brain electrical motion) or inhibitory (decrease brain electrical motion). Alcohol
increases the effects of the inhibitory neurotransmitter GABA in the brain. GABA causes the
lethargic movements and garbled speech that often occur in alcoholics. At the same time, alcohol
inhibits the excitatory neurotransmitter glutamate, which results in a suppression of a similar type
of physiological slowdown. In addition, alcohol also increases the amount of chemical dopamine in
the brain centre, which creates the feeling of pleasure after drinking alcohol. Just after a few drinks,
the physical effects of alcohol become perceptible. The level of BAC rises when the body takes up
alcohol faster than it can release it."
70. In an Article titled "Police officers' detection of breath odors from alcohol ingestion" by Herbert
Moskowitz, Marcelline Burns and Susan Ferguson, we note the following:

"Usually the strength of the odor is categorized as either slight, moderate or strong. Despite
the frequent reliance on this clue in officers' investigation of drivers, little objective evidence
is available on the probability of successfully detecting, identifying or measuring alcohol
odors.

A computer literature search supplemented by examining references in various publications

elicited only two studies examining the detectability of breath alcohol odor. The first study
was found in a monograph published by Widmark (1932) (German Edition 1932, English
Transaltion, 1981). Widmark was a professor at the University of Lund, Sweden and presented
data obtained from behavioral testing of 562 drivers arrested for possible driving under the
influence of alcohol. The behavioral testing occurred in police stations throughout Sweden,
and were performed by more than 150 physicians. The seven behavioral tests included the
odor of alcohol on the breath, the Romberg Test of body sway, walking a straight line and
turning, finger to finger test, picking up small objects and slurred speech. Each of these items
in the behavioural battery was administered to all subjects. Widmark noted that the
examination occurred sometime after arrest at the police station and therefore the breath
odor would have been during the post absorption stage. No subject whose blood alcohol
concentration (BAC) was 0.06% of below had an alcohol breath odor detected by physicians.
Between 0.061 and 0.08% BAC, 33% of the drivers were detected as having an odor; between
0.081 and 0.10% BAC, 63% of the drivers were detected; from 0.101 to 0.181% BAC, detections
averaged 81%; between 0.181% and 0.260% BAC, detections averaged 92%; and it was only
above 0.261% BAC that an alcoholic odor was 100% detected on the breath.

The other reference dealing with the issue was a National Highway Transportation Safety
Administration, Department of Traffic (NHTSA/ DOT) pilot study examining cues utilized by
officers in detecting drivers under the influence of alcohol (DUI) (Compton, 1985) . This was
an experimental study where 75 male volunteer drivers were administered ethanol beverages
sufficient to produce BACs of either zero or between 0.05 and 0.15%. Consumption was spaced
over a 1.5-2h period. After an additional half hour wait, subjects drove a car over a closed
course to a check point, where an officer/ observer conversed with the driver and noted among
other symptoms whether an alcohol odor was presented. Other symptoms examined were face
flushing, slurred speech, eye dilation, demeanor, disheveled hair, poor dexterity and clothes
disheveled. The officers then made a determination whether the driver should be detained for
further investigation.

Drivers with a zero BAC were correctly identified 93% of the time. There were 7% false-
positives, i.e. identification of a zero BAC driver as having alcohol odor. Since officers were
aware that they were participating in an alcohol study, a7% false-positive rate is undoubtedly
higher than would occur in actual traffic stops. An alcohol odor was detected in drivers with
BACs between 0.05 and 0.09% only 39% of the time producing a false negative error rate of
61%. Conversely, 61% of drivers with BACs between 0.10 and 0.15% were detected as emitting
 an alcohol odor with 39% false negatives, i.e. drivers above 0 .10% not detected. Variability
between officers in detecting odor was quite large." (Emphasis supplied)

It is not clear whether the odor in the breath was sought to be discerned without any devise.

THE ARGUMENT BASED ON INVESTIGATOR'S REPORT AND THE QUESTION RELATING TO

BURDEN OF PROOF

71. Shri Gopal Sankarnarayanan, learned Senior Counsel for respondent contended that the
argument of the appellant that the Insurer was saddled with the liability to prove violation of the
condition, which is impossible of achievement, is without basis, in the facts of this case. In this
regard, he pointed out the contents of the Investigator Report. He pointed out that the
Investigation Report would show that the Investigator was very much present in the early morning,
and therefore, he had the opportunity to interact with the driver of the car, the Police Officers and
the Doctors. The Investigator could have also insisted on getting the test done on the driver.
However, despite this opportunity being presented, he has not availed of the same. Thus, it shows
that there is no merit in the appellant's contention that the person driving the vehicle was under
the influence of alcohol.

72. The relevant portion of the Investigation Report reads as follows:

" Description of Investigation with regard to accident of above said vehicle:

With regard to above said Accident Claim, I have been deputed by you to investigate the above
said claim. In this regard, I went to accident spot at India Gate on 22.12.07 and inspected the
car and thereafter went to P.S. Tilak Marg and enquired about said accident from S.I.
Mukhtiyar Singh, I.O. of this case.

Information Received from S.I. Mukhtiar Singh:

S.I. Mukhitar Singh posted as P.S. Tilak Marg informed me that he received an accident call
which was entered in DDR register vide D.D. entry no. 39 A on 22/12/07 in the morning at 5:05
a.m. and thereafter he alongwith the constable Vinod no. 2098/ND left from P.S. Tilak Marg
for the accident spot at India Gate and while they reached at the spot they saw a car no.
DL1CJ-3577 has been burning and the Addl SHO and fire brigade were present at the spot. He
was being informed that the injured were taken to RML Hospital, where is received copy of
MLC No. 62213/07 in the name Ruchi Ram Jaipuria S/o C.K. Jaipuria R/o 11.No. 8, Prithvi Raj
Road, New Delhi wherein the doctor has mentioned "No Evidence of Fresh injuries" for
medical examination and smell of Breath Alcohol (+) and MLC No. 62214/C7 in the name of
Man Bangia S/o Sh. S.K. Bangia r/o 42A, Pkt C, Siddharth Extn. New Delhi 14 was made by the
doctor wherein doctor has mentioned 'No Evidence of Fresh Injuries "for medical examination
and smell of Breath Alcohol (+). Thereafter he again reached at the spot, where constable
Anand Prakash No. 1226 /ND posted at P.S. Tilak marg gave his statement with regard to said
accident and on the basis of the record of MLC's of injured Mr. Ruchi Ram Jaipuria and Mr.
Man Bangia they have lodged FIR No. 453/07 on 22/12/07 u/s 279/427 IPC as well as u/s 185 of
M.V. Act 1988. Copy of said FIR is enclosed herewith and same is annexed as Annexure "A".
 My observations are as under:

1. As per the information received from SI Mukhtiar Singh, and after persuing the FIR No.
453/07 dated 22/12/07 of P.s. Tilak Marg and MLC nos. 62213/07 of Mr. Man Bangia it has been
confirmed that the driver, Mr. Man Bangal was under influence of alcohol due to which he lost
the control and as a result of which the said accident has taken place."

73. An addendum report dated 06.02.2008, is found as follows:

"This is further to my investigation report dated 27/01/08 relating and pertaining to the
investigation of the motor claim of vehicle no. DL1CJ-3577 of M/S Pearl Beverages under cove
mote no. 37669622.

As per FIR no. 453/07 dated 22/12/07 of P.S. Tilak Marg filed in the instant case, . Section 185
of M.V. Act 1988 has also been imposed. As per section 185 of M.V. Act 1988, driving of a
vehicle by a drunken driver is an offence under such section and which is punishable with
imprisonment. Thus the said vehicle was being driven by it's driver Mr. Man Bangia, under the
influence of alcohol at the time of said accident.. As such' Prima Facie drunkep driving by the
driver Mr. Man Bangia, has been proved.

The insurer may treat the claim as per the policy terms conditions."

74. It must be noted that the Report, thus, indicates that the Investigator was deputed by the
appellant. It also suggests that he went to the accident spot on 22.12.2007. The reference to the
time being 5.05 A.M. relied upon by the learned Counsel for the respondent as the time at which the
Investigator, inter alia, is alleged to have reached the spot, is actually part of the information which
the Investigator received from the Sub-Inspector. The Sub-Inspector has informed the Investigator
that he received information at 5.05 am and, thereafter, he, along with a Constable, had reached the
spot and that he saw the car, which was burning. The only part which makes up the Report, as such,
of the Investigator, is his observations. Thus, the Investigator's Report does not appear to suggest
that the Investigator had been to the accident site at 05.00 A.M. in the morning and, therefore, had
the opportunity to interact with the driver of the vehicle or ensure that the test was conducted to
show that the driver was driving under the influence of alcohol. Thus, we repel the contentions of
the respondent.

75. On facts, having rejected the argument of the respondent that the surveyor appointed by the
appellant was present at the time of the accident or immediately after the accident, we must look at
the some of the terms of the insurance policy. The contract provides that the notice shall be given
in writing to the insurer immediately after the occurrence of any accidental loss or damage in the
event of any claim. The insured has to give all information and assistance as required by the
company. It is obviously true that the appellant was intimated on 22.12.2007 which is evident from
the fact that investigator did go to the accident spot on 22.12.2007 and inspected the car. The exact
time given is however not mentioned in the report. The time at which he went was also not got
articulated through the interrogatory issued by the respondent. It would appear to be a case where
the driver of the car not having suffered any fresh injury would not have been available in the
hospital. The police authorities obviously did not carry out the blood test or the breath test. As to
what transpired in this regard the matter remains a mystery. From the F.I.R. it appears that the
informant officer's priority was to take the men out and to take them to the hospital. However, we
cannot resist recording our disquiet at the conduct of the police officer in not pursuing the matter
in the form of conducting a breath test or other tests and pursuing the matter under Section 185 of
the Motor Vehicles Act or by filing of final report. However we desist from saying anything more
having regard to the fact that 14 years have gone by.

76. Coming to the question again on burden of proof, insofar as the appellant-insured seeks to
establish exclusion of liability is concerned, the burden of proof is upon it, subject to what we hold.

77. In the context of question relating to burden of proof, in the case of this nature, we cannot but
notice Section 106 of the Evidence Act. Section 106 of the Evidence Act speaks of the burden of
proving facts which are in the special knowledge of the person. Section 106 of the Evidence Act
reads as follows:

" 106 Burden of proving facts specially within knowledge - when any fact is specially is within
knowledge of any person the burden of proving that fact is upon him."

78. This Section enshrines the principle which conduces to establishing facts when those facts are
especially within the knowledge of a party.

There can be no doubt this is a salutary provision which applies to both civil and criminal matters
also. We do notice V. Kishan Rao (supra), where this Court held as follows:

"13. Before the District Forum, on behalf of Respondent 1, it was argued that the complainant
sought to prove Yashoda Hospital record without following the provisions of Sections 61, 64,
74 and 75 of the Evidence Act, 1872. The Forum overruled the objection, and in our view
rightly, that complaints before the Consumer Fora are tried summarily and the Evidence Act in
terms does not apply. This Court held in Malay Kumar Ganguly v. Dr. Sukumar Mukherjee
[(2009) 9 SCC 221 : (2010) 2 SCC (Cri) 299] that provisions of the Evidence Act are not
applicable and the Fora under the Act are to follow the principles of natural justice (see para
43, p. 252 of the report)."

79. Even if, the Section as such is not applicable to the Consumer Protection Act, there can be no
reason why the principle cannot apply to proceedings under the Consumer Protection Act. We may
notice a decision of this Court in Shambu Nath Mehra v. State of Ajmer, AIR 1956 SC 404. Paragraph
11 of the said judgment reads as under:

" 11. This lays down the general rule that in a criminal case the burden of proof is on the
prosecution and Section 106 is certainly not intended to relieve it of that duty. On the
contrary, it is designed to meet certain exceptional cases in which it would be impossible, or at
any rate disproportionately difficult, for the prosecution to establish facts which are
"especially" within the knowledge of the accused and which he could prove without difficulty
or inconvenience. The word "especially" stresses that. It means facts that are preeminently or
exceptionally within his knowledge. If the section were to be interpreted otherwise, it would
lead to the very startling conclusion that in a murder case the burden lies on the accused to
 prove that he did not commit the murder because who could know better than he whether he
did or did not. It is evident that that cannot be the intention and the Privy Council has twice
refused to construe this section, as reproduced in certain other Acts outside India, to mean
that the burden lies on an accused person to show that he did not commit the crime for which
he is tried. These cases are Attygalle v. Emperor [AIR 1936 PC 169] and Seneviratne v. R.
[(1936) 3 All ER 36, 49]." (Emphasis supplied)

80. The same view has been taken in Murlidhar and others v. State of Rajasthan, AIR 2005 SC 2345.

81. If we apply the principle of Section 106 of the Evidence Act, would it not produce the following
result?

The respondent set up the case that the driver had not consumed any alcohol. In the very next
sentence, it is pleaded that further assuming that he had consumed alcohol, as he was not
intoxicated the exclusion clause is not attracted. When it came to affidavit evidence, however, the
driver has not deposed that he had not consumed intoxicating liquor. He has only stated that he was
neither under the influence of intoxicating liquor or drugs at the time of the accident. In view of the
evidence that pointed to the driver smelling of alcohol and the absence of any evidence by even the
driver that he has not consumed alcohol and as even found by the National Commission, it would
appear to be clear that the car was driven by the driver after having consumed alcohol. In such a
case as to what was the nature of the alcohol and what was the quantity of alcohol consumed, and
where he had consumed, it would certainly be facts within the special knowledge of the person who
has consumed the alcohol. The driver has not, for instance also, once we proceed on the basis that
he has consumed alcohol, indicated when he has consumed the alcohol.

It would be "disproportionately difficult" as laid down by this Court for the insurer in the facts to
have been proved as to whether the driver has consumed liquor on an empty stomach or he had
food and then consumed alcohol or what was the quantity and quality of the drink (alcohol content)
which would have been circumstances relevant to consider as to whether he drove the vehicle under
the influence of alcohol. The driver has merely stated that he was not under the influence of
intoxicating liquor and he was in his full senses.

82. It is true, no doubt, there are no interrogatories served on the driver by the appellant. It must be
noted here that this Court has laid down that having regard to the nature of the proceeding under
the Consumer Protection Act, the proceeding being summary, cross examination be conducted
ordinarily through the modality of interrogatories. In Dr. J.J. Merchant (Dr) v. Shrinath Chaturvedi,
(2002) 6 SCC 635

"19. It is true that it is the discretion of the Commission to examine the experts if required in
an appropriate matter. It is equally true that in cases where it is deemed fit to examine
experts, recording of evidence before a Commission may consume time. The Act specifically
empowers the Consumer Forums to follow the procedure which may not require more time or
delay the proceedings. The only caution required is to follow the said procedure strictly. Under
the Act, while trying a complaint, evidence could be taken on affidavits [under Section 13(4)
(iii)]. It also empowers such Forums to issue any commission for examination of any witness
[under Section 13(4) (v) ] . It is also to be stated that Rule 4 in Order 18 CPC is substituted
 which inter alia provides that in every case, the examination-in-chief of a witness shall be on
affidavit and copies thereof shall be supplied to the opposite party by the party who calls him
for evidence. It also provides that witnesses could be examined by the court or the
Commissioner appointed by it. As stated above, the Commission is also empowered to follow
the said procedure. Hence, we do not think that there is any scope of delay in examination or
cross-examination of the witnesses. The affidavits of the experts including the doctors can be
taken as evidence. Thereafter, if cross-examination is sought for by the other side and the
Commission finds it proper, it can easily evolve a procedure permitting the party who intends
to cross-examine by putting certain questions in writing and those questions also could be
replied by such experts including doctors on affidavits. In case where stakes are very high and
still a party intends to cross-examine such doctors or experts, there can be video conferences
or asking questions by arranging telephonic conference and at the initial stage this cost
should be borne by the person who claims such video conference. Further, cross-examination
can be taken by the Commissioner appointed by it at the working place of such experts at a
fixed time." (Emphasis supplied)

83. Thus, unlike in proceeding in a court, ordinarily the insurers may not be in a position to cross
examine. It is no doubt true that since the principle of Section 106 of the Evidence Act only cast the
burden on the person who has special knowledge of the facts, apart from the facts, which we have
referred to above, viz., where it was consumed, the quality and quantity of alcohol consumed, the
time at which it was consumed, whether it was accompanied by food which can clearly be said to be
within the knowledge of the person who drove the vehicle, the effects of the drinking by way of
signs discernible, after the accident took place, in the facts, cannot be said to be within the
knowledge of the driver only. We say this for the reason that according to FIR, the police constable
on patrol has purported to describe the happening of the accident and was present at that time.
According to his version, he has with the aid of his companion officer helped the driver and the co-
passenger out of the vehicle and they were taken to the hospital. At the hospital, in the medical
legal report, there is reference to breath of alcohol(+). It is, however, true that the insurer or his
agent may not have been given notice at that stage. We also agree that it would not be proper or
legal to hold that in such circumstances, the insurer would still be in a position to prove through a
breath test or blood test that the driver was under the influence of alcohol. If the driver having
regard to the fact did not suffer any fresh injury is discharged from the hospital and goes away, we
find it inconceivable as to how the insurer could be at fault for not having a breath or blood test
conducted. It may be true that the insurer could have obtained material in the form of affidavit
evidence from the police officer or the medical practitioner concerned regarding any other facts
regarding consumption of alcohol by the driver.

RES IPSA LOQUITUR

84. The State Commission has applied the principle of res Ipsa loquitur. The question to be
answered is not whether the driver of the vehicle was negligent. Res Ipsa loquitur has been
discussed in the decision of this Court in Syad Akbar v. State of Karnataka, (1980) 1 SCC 30 and this
is what is held:
 "19. As a rule, mere proof that an event has happened or an accident has occurred, the cause
of which is unknown, is not evidence of negligence. But the peculiar circumstances
constituting the event or accident, in a particular case, may themselves proclaim in
concordant, clear and unambiguous voices the negligence of somebody as the cause of the
event or accident. It is to such cases that the maxim res ipsa loquitur may apply, if the cause of
the accident is unknown and no reasonable explanation as to the cause is coming forth from
the defendant. To emphasise the point, it may be reiterated that in such cases, the event or
accident must be of a kind which does not happen in the ordinary course of things if those
who have the management and control use due care. But, according to some decisions,
satisfaction of this condition alone is not sufficient for res ipsa to come into play and it has to
be further satisfied that the event which caused the accident was within the defendant's
control. The reason for this second requirement is that where the defendant has control of the
thing which caused the injury, he is in a better position than the plaintiff to explain how the
accident occurred. Instances of such special kind of accidents which "tell their own story" of
being off springs of negligence, are furnished by cases, such as where a motor vehicle mounts
or projects over a pavement and hurts somebody there or travelling in the vehicle; one car
ramming another from behind, or even a head-on collision on the wrong side of the road. (See
per Lord Normand in Barkway v. South Wales Transport Co. [(1950) 1 All ER 392, 399]; Cream
v. Smith [(1961) 8 AER 349]; Richley v. Faull [(1965) 1 WLR 1454 : (1965) 3 All ER 109])

20. Thus, for the application of the maxim res ipsa loquitur "no less important a requirement
is that the res must not only bespeak negligence, but pin it on the defendant".

85. Thus, it is used in cases of tort and where the facts without anything more clearly and
unerringly points to negligence. The principle of res Ipsa loquitur, as such, appears to be
inapposite, when, what is in question, is whether driver was under the influence of alcohol. It may
be another matter that though the principle as such is inapplicable, the manner in which the
accident occurred may along with other circumstances point to the driver being under the influence
of alcohol.

THE FLAWS IN THE IMPUGNED ORDER

86. In the order of the National Commission which is relied upon, the Commission has referred to
Modi's Medical Jurisprudence and Toxicology, 24th edition. The Commission finds that in the
opinion of the author, the percentage of alcohol in the blood would be 0.2% in case the quantity of
alcohol per 100 ml of blood is 200 mg. The finding that a person can be said to be moderately
intoxicated if he has 200 mg per 100 ml is an incorrect inference. The person who has such a level of
alcohol would have 0.2% of alcohol. Such a person would clearly be heavily intoxicated. This is clear
from a perusal of the table showing the effects in the Manual for Physicians referred to in paragraph
7 of the relied upon order.

87. The further finding that a person with a concentration of 0.15% of alcohol in the blood is
regarded as fit to drive a motor vehicle and such percentage happens when he has 150 mg of alcohol
per 100ml blood is an observation made based on Modi's Medical Jurisprudence and Toxicology.
Modi in his work has in this regard drawn upon the presumptive limit which prevailed in the United
States. In the United States, at one point of time, 0.15% of alcohol concentration was the maximum
presumptive limit. If the alcohol concentration was found to be in excess of 0.15% unless rebutted
by the accused, it was presumed that the driver was under the influence of alcohol. In fact, there
was a lower presumptive limit of 0.05% and if the concentration was below this limit it was
presumed that the driver was not in the wrong. What is relevant is that following various studies
the presumptive limit on the one hand stood lowered in all the states and the maximum
presumptive limit was initially reduced to 0.10% and thereafter it was reduced to 0.08%. In India
the percentage is 0.03 which is the same as 30 mg in 100 ml of blood. In China and in Sweden, the
percentage is still lower. It is 0.02%. In paragraph 6 of the relied upon order reference is made to
Lyon' s Medical Jurisprudence and Toxicology. Reference is made therein to the policy statement of
the American Medical Association and National Safety Council of the USA that 0.10% can be taken
as prima facie evidence of alcoholic intoxication and recognising that many individuals are under
the influence of 0.05% to 0.10% range. This is at loggerheads with the earlier reference to 0.15%
alcohol not rendering a person unfit to drive the motor vehicle unless it is understood as the law at
an earlier point of time. The further reference to 0.05% blood alcohol level raising a presumption
that a subject was not under the influence of alcoholic beverage is again based on the set of laws in
the United States which provided for such a presumption. The National Commission has not
considered the fact that along with such presumptive limit, the laws in the United States also
further provide that irrespective of the alcohol percentage or BAC level, if the vehicle is not driven
safely and a person has consumed alcohol, he is liable to be booked under another set of laws. The
observation made in Lyon's Medical Jurisprudence that blood alcohol level of less than 0.10% does
not raise a presumption of intoxication is also contrary to the developments under which even the
presumptive limit has been reduced to 0.08%. In fact, there is a zero-percentage alcohol level or
0.02% alcohol in most states for the under aged drivers in the United States. Coming to paragraph 7
of the relied upon order, the Commission has referred to the Manual for Physicians in National
Drug Dependence Treatment Centre, All India Institute of Medical Sciences, New Delhi.

There is in the first-place error in the second classification. Actually, it is intended for a BAC level of
above 80 . Even in the said classification the actual effects of alcohol consumption are shown as
follows - "Noisy, moody, impaired judgement, impaired driving ability" as against the third
classification 100 to 200 BAC, the effects of which are -"Electroencephalographic changes begin to
appear, Blurred vision, unsteady gait, gross motor in-coordination, slurred speech, aggressive,
quarrelsome, talking loudly." The Commission has not referred to the effects of BAC below 80
brought out in the Manual. In the same, the effects are shown as - "euphoria, feeling of relaxation
and talking freely, clumsy movement of hands and legs, reduced alertness but believes himself to be
alert." The relied upon order also shows disinclination to accept views expressed in Modi's Medical
Jurisprudence and Toxicology on the basis of the opinion of All India Institute of Medical Sciences
which is allegedly collaborated by the opinion expressed in Lyon's Medical Jurisprudence and
Toxicology. The Commission in the said case, which did not deal with a case of driving after
consuming liquor, found the limits relevant as fixed in various countries. The quantity of alcohol
allowed in the USA is stated to be not above 100 mg in 100 ml of blood. In fact, in the USA where it
also used to be l00mg in 100 ml, it has now further been reduced to 0.08% corresponding to 80 mg
in 100 ml.
88. We also find that the NCDRC was in error in conflating the requirement under Section 185 of the
Motor Vehicles Act, with that under the exclusion clause in the contract of insurance in question.

THE FIR

89. The Report is based on a statement given by a Police Constable Anand Kumar. His statement
would show that as the Constable posted at the Police Station, Tilak Marg, New Delhi, on
21/22.12.2007, he and another Constable were on patrolling. At about 02.25, he on his motorcycle
reached c-hexagon, Zakir Hussain Marg. He saw the driver of the car No. DL-1CJ-3577 (the car in
question) , came from the Nizamuddin side towards the Zakir Hussain Marg, India Gate, in a very
rash, negligent way and at a very high speed. Due to very high speed, this car got out of control and
hit at a massive force with a footpath of c-hexagon, Dr. Zakir Hussain Marg, Children Park, India
Gate, electric pole and the wall of the Children park and got overturned. The car caught fire. He
along with his associate, a Home Guard, brought the driver Shri Man Bangia and his associate out of
the said car, after great efforts and reported about the incident to wireless opp. (must be operator)
D-56 of Police Station, through wireless. Vehicles of the fire brigade, PCR Van and Additional SHO
Van, came to the spot. He reports that the accident occurred due to the rash and negligent driving.
FIR shows that the Sub-Inspector, on the basis of the said information, which he recorded, goes to
the site of the accident. It is recorded in the FIR further that the Add/SHO and the vehicles of the
fire brigade were all so present for controlling the fire. The PCR van, it is stated, had taken away the
accused to the Ram Manohar Lohia Hospital. The Sub-Inspector goes to the Hospital. He received
the MLC of the driver of the car and the co-passenger. In the same, the Doctors have reported that
there is no evidence of fresh injury and smell of alcohol (+). Virtually, the same report is made
about both the driver and the co-passenger. The age of the driver is shown as 27 years. It was
further recorded that a case under Section 27 9/427 of the IPC and Section 185 of the MV Act had
been committed. The date and time of the occurrence is again shown as 22.12.2007 at about 02.25.

90. This FIR is FIR No. 453 of 2007. The proceedings of the Metropolitan Magistrate dated
27.08.2011 would show that for the offence under Section 27 9 of the IPC the charge was separately
framed against the driver of the car and he voluntarily pleaded guilty. He was convicted under
Section 27 9 of IPC and sentenced to pay a fine of Rs.1,000/- with, no doubt, a default clause.

91. A perusal of the Order of the State Commission would show that the FIR and the Medico Legal
Case sheet has been produced by the respondent itself.

92. There can be no doubt that the respondent itself sought to rely on the FIR and the Medico Legal
Case (MLC). We have noticed its contents. The FIR has been prepared on the basis of the Report of
the Police Officer. The use of the FIR in criminal case is to be distinguished from its employment in
a consumer case. This is so, in particular, when the FIR is relied upon by the complainant himself. It
is noteworthy further that though in the complaint, it was contended that the Police had lodged the
FIR under Section 185 of the Motor Vehicles Act besides Section 279/427 of I PC but no charge-
sheet had been filed till the date of the complaint, meaning thereby that the Police, after
investigating the case, could not find any evidence to prosecute the driver for any of the offences, it
must be noticed that the complaint is of the year 2009 and it seen dated 04.03.2009, the case of the
respondent that there was no evidence to prosecute the driver for any of the offences, is falsified by
the driver pleading guilty in regard to at least one of the offences, viz., the offence under Section
279 of IPC, which took place, apparently, during the pendency of the complaint before the State
Commission and the State Commission has taken notice of this development.

93. As far as MLC is concerned, in the complaint filed by the respondent, there is no dispute that the
MLC contained reference to the driver and the co-passenger smelling of alcohol.

94. At this juncture, it is necessary to notice the case set up by the respondent. It expressly sets up
the case that the person driving the vehicle had not consumed any alcohol. The very next sentence,
no doubt, sets up the alternate case, which is that further assuming that he had consumed alcohol,
the case would not fall under the Exclusion Clause, as he was, in any case, not intoxicated.

95. It is further noteworthy that PWl, the Company Secretary of the respondent, has, in is his
Affidavit evidence, stated that under Section 185 of the MV Act, a certain percentage of alcohol is to
be found before a person is to be prosecuted for the offence of drunken driving. The law does not
prohibit driving after consuming liquor and all that is prohibited is, that the percentage of liquor
should not exceed 30 mg. per 100 ml. of blood. Therefore, the understanding appears to be that only
in circumstances, where the act of driving, having consumed liquor, attracts the wrath of Section
185 and an offence is committed thereunder, that the opprobrium of the Exclusion Clause in the
Contract of Insurance, for own damage, is attracted.

96. The Affidavit of PW2, the driver himself, would show that he does not depose that he had not
consumed liquor as was the case in the complaint. Instead, he deposes only that he was neither
under the influence of intoxicating liquor or drugs at the time of the accident. He further deposed
that he was in his full senses and capable of exercising proper control over the said vehicle. Even, at
the stage of the deposition through affidavit, which appears to have been filed in 2010, he reiterates
that the case in FIR No. 453 of 2007, was falsely registered. The case pending against him in the
Court of the Metropolitan Magistrate, New Delhi, is stated to be malaflde and he is sure to be
acquitted in the said case. Nearly, within a year, as already noticed by us, however, the allegedly
false case is accepted by the driver as true. The Affidavit of PW2, would not show that the driver had
not consumed liquor, which case is set up. On the contrary, driver having drunk, is fortified by the
MLC, which clearly indicates that the driver was smelling of alcohol.

97. Therefore, it can be safely concluded that the case set up of the respondent that the person
driving the car had not consumed liquor, is clearly false.

THE INTERROGATORIES

98. The following interrogatories dated 18.10.2010, were apparently served by the respondent on
the appellant:

"INTERROGATORIES ON BEHALF OF COMPLAINANT

1. Name the surveyor who was appointed in this case.

2. Is the said surveyor still associated with your company?

3. Why have you not filed the affidavit of the said surveyor In the present proceedings?
 4. Is M/s Bhola & Associates a Lawyer's Firm?

5. What are the educational qualifications of Mr. Sonu Bhola Advocate?

6. Does Mr. Sonu Bhola have licence to practise as an Advocate. If yes, please give his Bar
Council Registration Number?

7. Has Mr. Bhola personally met Mr. Aman Bangia, the Driver of the vehicle. If yes when and
where?

8. Whether observation made by Mr. Bhola in his investigation report is only an inference
drawn from FIR, MLC or is it based upon some cogent and reliable evidence? Please furnish
details of all those cogent and reliable evidence and show the same from the record of present
proceedings.

9. Whether M/s Bhola and Associates are qualified to investigate such case. If yes, how.

10. Did Mr. Sonu Bhola meet any doctor or during his investigation? If yes, please give the
time, place and the name of the doctor.

11. Did Mr. Bhola obtain any medical test report from the Doctor or the Investigating officer
during his Investigation?

12. Whether any urine test was carried out upon the driver Mr. Man Bangia to determine
consumption of alcohol?

13. Whether the blood sample of the driver Mr. Aman Bangia was taken by the Doctor. If yes,
whether the said sample was sent for chemical analysis to determine consumption of alcohol?

14. Do you have any report of urine or blood test of the driver Mr. Aman Bangia?

15. Have you flied affidavit of the Doctor in these proceedings who had stated "smell of
alcohol" in his report?

16. Do you have any medical test report which could show the level of alcohol in the blood of
the driver?

17. Do you know that a criminal case against Mr. Man Bangia is still pending in the court?

99. The reply given to the interrogatories by the appellant, read as follows:

"REPLY BY RESPONDENTS TO INTERROGATORIES FILED ON BEHALF OF COMPLAINANT

1. Name the surveyor who was appointed in this case.

Ans. Mr. Vikas Puri (Spot Survey) , Mr. Jawaharlal (Final Survey).

2. Is the said surveyor still associated with your company?

Ans. Yes.
3. Why have you not filed the affidavit of the said surveyor in the present proceedings?

Ans. Not necessary.

4. Is M/s Bhola & Associates a Lawyer's Firm?

Ans. Yes.

5. What are the educational qualifications of Mr. Sonu Bhola Advocate?

Ans. B.Com LLB.

6. Does Mr. Sonu Bhola have licence to practise as an Advocate. If yes, please give his Bar
Council Registration Number?

Ans. It is not relevant with the investigation, hence we did not enquire.

7. Has Mr. Bhola personally met Mr. Aman Bangia, the Driver of the vehicle. If yes when and
where?

Ans. No.

8. Whether observation made by Mr. Bhola in his investigation report is only an inference
drawn from FIR, MLC or is it based upon some cogent and reliable evidence? Please furnish
details of all those cogent and reliable evidence and show the same from the record of present
proceedings.

Ans. Based on MLC, FIR.

9. Whether M/s Bhola and Associates are qualified to investigate such case. If yes, how.

Ans. Yes. No specific qualifications are prescribed by law.

10. Did Mr. Sonu Bhola meet any doctor or during his investigation? If yes, please give the
time, place and the name of the doctor.

Ans. We are not aware of it.

11. Did Mr. Bhola obtain any medical test report from the Doctor or the Investigating officer
during his Investigation?

Ans. No.

12. Whether any urine test was carried out upon the driver Mr. Man Bangia to determine
consumption of alcohol? Ans. Don't know.

13. Whether the blood sample of the driver Mr. Aman Bangia was taken by the Doctor. If yes,
whether the said sample was sent for chemical analysis to determine consumption of alcohol?
Ans. Don't know.
 14. Do you have any report of urine or blood test of the driver Mr. Aman Bangia?

Ans. No.

15. Have you flied affidavit of the Doctor in these proceedings who had stated "smell of
alcohol" in his report?

Ans. No.

16. Do you have any medical test report which could show the level of alcohol in the blood of
the driver?

Ans. No.

17. Do you know that a criminal case against Mr Aman Bangia is still pending in the court?

Ans. No."

100. The interrogatories, along with the answers, reveal the following:

a. The Surveyor of the appellant is a Lawyers Firm.

b. The Surveyor has not personally met the driver of the car.

c. The observations made by the Surveyor is based on the MLC and FIR.

d. The appellant is not aware as to whether the Surveyor had met any Doctor, during his
investigation.

e. The Surveyor has not obtained any medical test report from the Doctor or the Investigating
Officer, during his investigation.

f. The appellant pleads ignorance as to whether any urine test was conducted on the driver to
determine the consumption of the alcohol.

g. The same is the answer also in regard to as to whether any blood sample was taken to
determine the consumption of alcohol.

h. The appellant, in its answer, has stated that it has not filed affidavit of the Doctor, who has
stated smell of alcohol in his Report.

i. The appellant has also stated that he does not have any Medical Report to show the level of
alcohol in the blood.

101. We would think that it would not be appropriate to conflate the two situations, viz., the
requirement under Section 185 of the MV Act and an Exclusion Clause in the Contract of Insurance
in question. The requirements of drunken driving under Section 185 of the MV Act, can be proved
only with reference to the presence of the alcohol concentration which is 30 mg per 100 ml of blood.
This corresponds to 0.03 per cent BAC. In fact, it is noteworthy that in Sweden and in China, it is
0.02.
102. As far as establishing the contention by the insurer in a Clause of the nature, we are dealing
with, viz. , a case where the insurer alleges that the driver was driving the vehicle under the
insurance of alcohol, it is all very well, if there is a criminal case and evidence is obtained therein,
which shows that the driver had 30 mg/100 ml or more. Or in other words, if the BAC level was 0.03
or more. We would think that in a case where, there is a blood test of breath test, which indicates
that there is no consumption at all, undoubtedly, it would not be open to the insurer to set up the
case of exclusion. The decision of this Court in Bachubhai Hassanalli Karyanl (supra) was rendered
under Section 117 of the Motor Vehicles Act, 1939, prior to its substitution in 1977, and what is
more it turned on the evidence also.

103. However, in cases, where there is no scientific material, in the form of test results available, as
in the case before us, it may not disable the insurer from establishing a case for exclusion. The
totality of the circumstances obtaining in a case, must be considered. The scope of the enquiry, in a
case under the Consumer Protection Act, which is a summary proceeding, cannot be lost sight of. A
consumer, under the Act, can succeed, only on the basis of proved deficiency of service. The
deficiency of service would arise only with reference to the terms of the contract and, no doubt, the
law which surrounds it. If the deficiency is not established, having regard to the explicit terms of
the contract, the consumer must fail.

104. It is, in this regard, we would think that an exclusion of the nature involved in this case, must
be viewed. We can safely proceed in this case, on the basis that the person driving the vehicle had
consumed alcohol. We can proceed on the basis that he drove the car after having consumed
alcohol. It is true that the exact quantity, which he had consumed, is not forthcoming. The fact that
he smelt of alcohol, is indisputable, having regard to the contents of the FIR and also the MLC. He
was accompanied by PW3. PW3 also smelt of alcohol. The incident took place in the early hours of
22.12.2007. It happened at New Delhi. It is further clear that it happened in the close vicinity of
India Gate. The driver and the passenger were in their twenties. At that time of the day, viz., the
early hours, the version of the parties must be appreciated without reference to any possibility of
the accident happening as a result of any sudden incident happening, as for instance, attempted
crossing of a person or an animal, which necessitated the vehicle, being involved in the accident, in
the manner, which is borne out by the FIR. There is simply no such case for the respondent. It is
clear that we can safely proceed on the basis that the vehicle was driven in a rash and negligent
manner, having regard to the conviction entered under Section 279 of the IPC. This is also to be
viewed in the context of the respondent putting up the case that the driver had not consumed
alcohol and that the case, even under Section 279 of the IPC was a false case. Still further, if we
examine the exact nature of the accident, it speaks eloquently for the influence, which the
consumption of alcohol had produced on the driver of the vehicle. The car, which is undoubtedly a
Porsche, which we presume, has a very powerful engine and capable of achieving enormous speed,
is reported to have gone out of control and hit at a massive force with the footpath of the road. It
overturned. It caught fire. In fact, it is the case of the respondent that the car was a complete wreck.
It was described as a total loss. The vehicles of the fire brigade came to douse the fire. We are
conscious that speed and its impact can be relative to the road, the traffic and the speed limits. The
FIR refers to the car being driven very fast. A person can be rash and negligent without having been
under the influence of alcohol. At the same time, being under the influence of alcohol can also lead
to rash and negligent driving. They are not incompatible.
105. This Court would not be remiss, if it takes into account the improbability of any traffic worth
the name at the time of the accident. While we may be in agreement with the respondent that it
would be for the insurer to make out a case, for pressing the Exclusion Clause, we cannot be
oblivious to the fact that there is no material in the pleadings of the respondent or in the evidence
tendered for explaining the accident. We can take judicial notice of the fact that the roads in the
Capital City, particularly in the area, where the accident occurred, are sufficiently wide and the
vehicle dashing against the footpath and turning turtle and catching fire, by itself, does point to,
along with the fact that the alcohol which was consumed manifests contemporaneously in the
breath of the driver, to conclude that alcohol did play the role, which, unfortunately, it is capable of
producing.

106. Applying the principles, which have been referred to, to the facts of the present case, we
summarize the following conclusions:

A. Firstly, in the MLC, in regard to the driver, the Report, inter alia, indicates that smell of
alcohol (+);

B. Pertinently, the very same Report is there in regard to the co-passenger. Both the driver and
the passenger were in the late twenties;

C. The smell of alcohol has been discerned by a Medical Practitioner;

D. Though the case was set up by the respondent that the driver had not consumed alcohol,
the driver, in his evidence (Affidavit evidence) , has not even stated that he has not consumed
alcohol, as was the specific case set up in the complaint. On the other hand, the alternate
case, which was set up that he was not under the influence of alcohol, alone was deposed to.
This is even though the respondent had reiterated in the Rejoinder Affidavit that the driver of
the vehicle had not consumed alcohol or any other intoxicating drink/drug;

E. Even the NCDRC has proceeded on the basis that the driver had consumed some alcohol.
Therefore, the conclusion is inevitable that the appellant has established that the driver had
consumed alcohol and was driving the vehicle, when the accident took place;

F. There is no evidence as to the quantity of alcohol consumed. It is also true that there is no
evidence other than the smell of alcohol being detected on both the driver and the co-
passenger, of any other effects of consumption of alcohol;

G. The requirement under Section 185 of the Motor Vehicles Act is not to be conflated to what
constitutes driving under the influence of alcohol under the policy of insurance in an Own
Damage Claim. Such a claim must be considered on the basis of the nature of the accident,
evidence as to drinking before or during the travel, the impact on the driver and the very case
set up by the parties.

H. The other aspect, which is pressed is, as regards the manner in which the accident itself
occurred. In this regard, it is clear that in any such case, this is an important circumstance,
which may establish that the driver was under the influence of alcohol. Driving, while under
the influence of alcohol, is to be understood as driving when, on account of consumption of
 alcohol, either before commencement of driving or during the driving and before the accident,
when consumption of alcohol by the driver would affect (influence) his faculties and his
driving skills. We would expatiate and hold that it means that the alcohol consumed earlier
was the cause or it contributed to the occurrence of the accident.

I. The respondent has no case that the accident occurred as a result of a sudden event which
took place, which necessitated the car being driven into the footpath. For instance, if there
was sudden attempted human or animal crossing, and the driver to obviate any such accident,
may drive in the manner, which culminated in the accident. It would be a case where the
driver would still be in control of his faculties even while having caused the accident. There is
material (particularly, in the nature of the Summary Proceedings) under the Consumer
Protection Act, in the form of the FIR. The Police Officer, who has lodged the information has
specifically stated that the car was being driven in a very fast manner;

J. The driver, in his chief examination, has not given any explanation, whatsoever, for the
happening of the accident. He does not have a case that there was any breakdown in the car or
of the brakes.

K. The driver has pleaded guilty and stands convicted under Section 279 of the IPC, which
penalises rash or negligent driving.

A person, who is not under the influence of alcohol, can be rash and negligent. But a person,
who is under the influence of alcohol, can also be rash and negligent. In other words, they are
not wholly incompatible. On the other hand, being under the influence of alcohol, aggravates
the possibility of rash and negligent driving as it can be the proximate cause. The car was
driven by the driver aged about 27. Both, he and his companion had, indeed, consumed
alcohol. The accident took place when the road would have been wholly free from any traffic
(There is no case whatsoever that the accident was caused by another vehicle being driven in
any manner or any person or animal attempting to cross the road or otherwise deflecting the
attention of the driver). The accident has no apparent cause, even according to the respondent
and the driver and his companion (PW3), yet we are asked to believe that the driver was in full
control of his senses. If the State Commission, in the circumstances, believed the version of
the respondent, in a summary proceeding, we would believe that NCDRC erred in interfering,
on the reasoning, which we find as erroneous.

107. What is in a summary proceeding noteworthy, is in the setting of the width of the road (a road
near India Gate, New Delhi) and the thinnest possible traffic, and without the slightest excuse,
hitting at the footpath with massive force, not being able to maintain control, hitting the electric
pole, the wall of the children park. The impact is so much that it led to the overturning of the car
and what is more, catching fire of the vehicle. This accident is inexplicable, if the driver is to be
believed as PW2, when he deposed "I was in my full senses and capable of exercising full control
over the car, at the time of the accident". It is more probable that his drink, really led to it. On the
facts, the view of the State Commission is a plausible view.

108. The upshot of the discussion is that the impugned Order is liable to be set aside. We order
accordingly. The Appeal stands allowed. There will be no order as to costs.
 WWW.LIVELAW.IN
19

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5635 OF 2021

(Arising out of SLP (C)No. 31444 of 2017)

CHANDRA & ORS. Appellant(s)

VERSUS

THE BRANCH MANAGER, THE ORIENTAL

INSURANCE COMPANY LIMITED & ANR. Respondent(s)

O R D E R

Leave granted.

The appellants have assailed the impugned judgment of

the High Court by which allowing the appeal filed by the

first respondent-insurer, the compensation which was awarded

to the appellants by the Motor Accidents Claims Tribunal

(hereinafter referred to as ‘MACT’ for brevity) in the sum

of Rs.30,81,577/- was reduced to Rs.8,20,000/-.

The case of the appellants was based on the death of

one J. Jeyachandran in an accident which took place on

28.07.2012. After finding liability as claimed by the

appellants, MACT arrived at a sum of Rs.30,81,577/-. The

reasoning of the MACT was that the appellant was employed in

a job in Saudi Arabia where he was earning 3,500 Riyals.

1
LL 2021 SC 481
 WWW.LIVELAW.IN
CIVIL APPEAL NO. 5635 OF 2021

MACT further took the multiplier at 16. It is this

reasoning which did not appeal to the High Court. By the

impugned order, the High Court while allowing the appeal

filed by the insurer, reasoned as follows:

The High Court found that it may not be safe to arrive

at the income of the deceased on the basis of the monthly

salary of 3,500 Riyals projected by the appellants.

Instead, the High Court substituted the income of the

deceased with the sum of Rs.15,000/- per month. Secondly,

the High Court also took the view that the age of the

parents of the deceased viz., appellants Nos. 1 and 2 being

65 and 61, the average age of the first and the second

appellants was taken, which was fixed as 63 years. On the

said basis, the multiplier was reduced from 16 to 7. This

essentially constituted the reasoning on the basis of which,

the amount awarded by MACT was reduced to the amount of Rs.8

and odd lakhs.

We have heard Shri G. Balaji, learned counsel on

behalf of the appellants, and also Shri Rajesh Kumra Gupta,

learned counsel on behalf of the first respondent-insurer.

Learned counsel for the appellants would point out

that the High Court erred in interfering with the Award

passed by MACT, insofar as, it modified the income to

Rs.15,000/- per month. He would next contend that the

multiplier should be that of the deceased which was

2
LL 2021 SC 481
 WWW.LIVELAW.IN
CIVIL APPEAL NO. 5635 OF 2021

correctly fixed at 16 by the MACT. It is further contended

that the High Court has also erred in not granting future

prospects which is to be given in terms of National

Insurance Company Limited v. Pranay Sethi and Others (2017)

16 SCC 680. Per contra, Shri Rajesh Kumar Gupta, learned

counsel for the respondent would point out that the High

Court is justified on the material placed before it, in

reducing the monthly income to Rs.15,000/-. In this regard,

he would point out that the deceased was not having any

permanent job. He was working abroad on visa and visa was

about to expire.

The appellants have also produced certain additional

documents before this Court. Learned counsel for the

respondent drew our attention to the appointment order dated

22.10.2011 issued in favour of the deceased, wherein it is

shown that, the appellant would be entitled to basic salary

of 1,000 Riyals. On the other hand, learned counsel for the

appellants drew our attention to certificate which is seen

dated 27.08.2012. Learned counsel for the appellants would

point out that this certificate was, in fact, relied upon by

the MACT also.

We must notice that the accident took place on

28.07.2012. The appointment order dated 22.10.2011 is in

close proximity to the date of accident. The basic salary

is shown as 1,000 Riyals. There is no mention of any other

3
LL 2021 SC 481
 WWW.LIVELAW.IN
CIVIL APPEAL NO. 5635 OF 2021

allowance as such therein. As far as the certificate dated

27.08.2012 is concerned, no doubt, therein, it is declared

that the last salary of the deceased was 3,500 Saudi Riyals.

However, we may take note of the other contents of the

certificate and it reads as follows:

“This letter has been issued based on his family

request to be submitted to authorities in India with
no legal obligation what so ever on the company.”

We would think that it may not be safe to place

reliance on the certification done about the salary at 3,500

Riyals. Having regard to the facts which we have noticed

which includes the actual appointment order which was issued

on 22.10.2011 as well, we would rely upon the order of

appointment which clearly establishes that the deceased was

earning a basic salary of 1,000 Riyals.

Having taken the converted value, we proceed on the

basis that the appellants was getting salary of Rs.15,000/-

per month.

The deceased was aged 33 years. He was a graduate.

He was also qualified in a course in computer. We have

indicated this to move on to the next aspect which is the

application of the principle enunciated in National

Insurance Company Limited v. Pranay Sethi and Others (2017)

16 SCC 680. Learned counsel for the first respondent-

insurer drew our attention to paragraph No. 59.3.

4
LL 2021 SC 481
 WWW.LIVELAW.IN
CIVIL APPEAL NO. 5635 OF 2021

“59.3 While determining the income, an addition of

50% of actual salary to the income of the deceased
towards future prospects, where the deceased had a
permanent job and was below the age of 40 years,
should be made. The addition should be 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, the addition should be 15%. Actual salary
should be read as actual salary less tax.”

He would point out with reference to it that in order

to get an increase of 50 per cent, deceased must have a

permanent job. Per contra, Shri G. Balaji, learned counsel

appearing for the appellants, would point out the next

paragraph that is 59.4.

“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 warrant where the deceased was
below the age of 40 years. An addition of 25% where
the deceased was between the age of 40 to 50 years and
10% where the deceased was between the age of 50 to 60
years should be regarded as the necessary method of
computation. The established income means the income
minus the tax component.”

In other words, he would submit that the Court may

proceed on the basis of this being a case where the deceased

was earning a fixed salary.

We are inclined to accept the argument of the

appellants in this regard that the appellants should be

granted increase by 40 per cent having regard to the

admitted age of the deceased being below 40 years on the

basis of the salary which we have arrived upon based on the

order of the appointment.

5
LL 2021 SC 481
 WWW.LIVELAW.IN
CIVIL APPEAL NO. 5635 OF 2021

As far as the question relating to multiplier goes,

there is hardly any dispute that it is the multiplier which

is relevant to the deceased, which shall apply.

We may only refer to the recent judgments of this

Court reported in Smt. Sunita Tokas and Anr. v. New India

Insurance Co. Ltd. and Anr. AIR 2019 SC 3921 and New India

Assurance Company Limited v. Somwati and Others (2020) 9 SCC

644.

The upshot of the above discussion is that the

appellants are entitled to partly succeed. The income of

the deceased fixed at Rs.15,000/- per month, applying 40 per

cent increase to the basic salary, the income is fixed at

Rs.21,000/- per month. Since the deceased was a bachelor, a

deduction of ½ from the same has to be made, and

resultantly, the monthly income will be Rs.10,500/-.

The amount so fixed must suffer tax, which is stated

to be 10 per cent in terms of the Constitution Bench

judgment in Pranay Sethi (supra). The amount is fixed as

Rs.18,84,400/-. To the same, under the conventional heads,

we award a sum of Rs.1,10,000/-. The total amount comes to

Rs.19,94,400/- which we round up to Rs.20 lakhs.

Accordingly, the appeal is partly allowed. The impugned

judgment of the High Court is modified substituting the sum

of Rs.20 lakhs as the amount of compensation which will be

paid with interest at 9 per cent per annum from the date of

6
LL 2021 SC 481
 WWW.LIVELAW.IN
CIVIL APPEAL NO. 5635 OF 2021

filing of the petition till realisation.

The parties are left to bear their own costs.

…………………………………………………………………., J.
[ K.M. JOSEPH ]

…………………………………………………………………., J.
[ PAMIDIGHANTAM SRI NARASIMHA ]

New Delhi;
September 09, 2021.

7
LL 2021 SC 481
 WWW.LIVELAW.IN
CIVIL APPEAL NO. 5635 OF 2021

ITEM NO.24 Court 10 (Video Conferencing) SECTION XII

S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS

Civil Appeal No. 5635/2021

(Arising out of SLP (C)No. 31444/2017)
(Arising out of impugned final judgment and order dated 05-06-2017
in CMA MD No. 562/2014 passed by the Madras High Court at Madurai)

CHANDRA & ORS. Appellant(s)

VERSUS

THE BRANCH MANAGER, THE ORIENTAL

INSURANCE COMPANY LIMITED & ANR. Respondent(s)

(With IA No. 87908/2021 - PERMISSION TO FILE ADDITIONAL

DOCUMENTS/FACTS/ANNEXURES)

Date : 09-09-2021 This matter was called on for hearing today.

CORAM :
HON'BLE MR. JUSTICE K.M. JOSEPH
HON'BLE MR. JUSTICE PAMIDIGHANTAM SRI NARASIMHA

For Appellant(s)
Mr. G. Balaji, AOR

For Respondent(s)
Mr. Rajesh Kumar Gupta, AOR

UPON hearing the counsel the Court made the following

O R D E R

Leave granted.
The appeal is partly allowed in terms of the signed
order.
Pending application stands disposed of.

(NIDHI AHUJA) (RAM SUBHAG SINGH)

AR-cum-PS BRANCH OFFICER

[Signed order is placed on the file.]

8
LL 2021 SC 481
 20

2021 (0) AIJEL-SC 67851

SUPREME COURT OF INDIA

Hon'ble Judges:Sanjay Kishan Kaul and Hrishikesh Roy JJ.

Hdfc Ergo General Insurance Co.Ltd. Versus Mukesh Kumar

CIVIL APPEAL No. 4576 of 2021 ;

CIVIL APPEAL No. 4577 of 2021 ; *J.Date :- AUGUST 3, 2021

MOTOR VEHICLES ACT, 1988

Cases Referred To :

1. Gobald Motor Service Ltd. V. R.M.K. Veluswami, AIR 1962 SC 1 : 1962 (1) SCR 929 : 1962 (1) SCJ
206 : 1962 (1) MLJ 105 : 1962 MLJ(Cri) 120
2. Kajal V. Jagdish Chand & Ors., 2020 4 SCC 413 : 2020 AIR SC 776 : 2020 (3) Scale 154 : JT 2020 (2)
126 : 2020 (2) Supreme 210
3. Lalan D. @ Lal & Another V. Oriental Insurance Company Limited, 2020 9 SCC 805 : 2020 AIR SC
4508 : 2020 (11) Scale 209 : JT 2020 (9) 513 : 2020 (4) RCR(Civ) 441
4. Mallikarjun V. Divisional Manager, National Insurance Company Limited & Another, 2014 14 SCC 396
: 2014 AIR SC 736 : 2013 (10) Scale 668 : JT 2013 (13) 465 : 2013 (8) SCR 268
5. Municipal Corporation Of Delhi V. Subhagwati, 1966 0 ACJ 57 : 1966 AIR SC 1750 : 1966 (3) SCR 649
: 1967 (2) SCJ 361 : 1966 (2) SCA 96
. Nagappa V. Gurudayal Singh & Others, 2003 2 SCC 274 : 2003 AIR SC 674 : 2002 (9) Scale 37 : JT
2002 (10) 144 : 2002 (Supp4) SCR 499
7. Parminder Singh V. New India Assurance Company Limited & Others, 2019 7 SCC 217 : 2019 AIR SC
3128 : 2019 (9) Scale 200 : 2019 (8) SCR 986 : 2019 (6) Supreme 286
. Sandeep Khanduja V. Atul Dande And Ors., 2017 3 SCC 351 : 2018 AIR SC(Supp) 1246 : 2017 (2)
Scale 314 : JT 2017 (2) 68 : 2017 (5) Supreme 29
9. Sapna V. United India Insurance Co. Ltd. & Anr., 2008 7 SCC 613 : 2008 AIR SC 2281 : 2008 (8) Scale
622 : JT 2008 (7) 569 : 2008 (8) SCR 791
10. U.P. State Road Transport Corporation And Ors. V. Trilok Chandra And Ors., 1996 4 SCC 362 : 1996
(4) Scale 522 : JT 1996 (5) 356 : 1996 (Supp2) SCR 443 : 1996 (4) Supreme 479

Equivalent Citation(s):
AIR 2021 SC 4010 : 2021 JX(SC) 643

JUDGMENT :-

SANJAY KISHAN KAUL, J.

1 Leave granted.

2 The sole question which arises for determination in this appeal led by the Insurance Company is
whether directions can be passed by the Court while determining compensation under the Motor Vehicle
Act, 1988 (hereinafter referred to as the said Act ) in the manner of a direction in perpetuity for continued
maintenance of a prosthetic limb for the injured claimant.

3 The respondent No.1 viz. Mukesh Kumar, was 19 years of age when he met with an accident on
25.8.2017 which resulted in permanent disability of his right lower limb, which was treated as a 100%
disability. An amputation had to take place below the knee
of that limb. In the assessment made by the
Motor Accident Claims
Tribunal (MACT), an amount of Rs.2 Lakhs was quantified towards
loss of
amenities, life and disfigurement which would include the
expenses towards his prosthetic limb. On
examination in appeal, the
learned judge of the High Court by the impugned order dated
04.11.2020 has
passed directions in the following terms:

7. With consent, the impugned award dated 22.01.2020

passed by the learned MACT in Petition
No.129/2018, is
modified to the extent that the claimant/R-1 shall be
supplied a prosthetic limb of
good quality which is
suitable and comfortable to him. It shall carry a lifetime
warranty. Should it be
required to be replaced/ repaired at
any stage, the insurance company will do so. The insurer
will
enquire from the victim, at least twice a year, as to
the working condition of the prosthetic limb,
through his
e-mail address and telephone number, as well as through his
counsel s e-mail address
and telephone number. The details
are as under:-

Claimant's / Claimant's/ Counsel's Counsel's E-

Rl'S Mobile Rl's email Mobile address mail
No. address No.
..........................

8. In case of any difficulty apropos the prosthetic limb,

the claimant may intimate the insurer through
e-mail
addresses and/ or telephone numbers of three officers of
the insurer, as supplied to him.
These details shall be
provided to the claimant within 2 weeks from today.

9. It will be open to the claimant to communicate the

quotation or estimate for a suitable prosthetic
limb to the
insurance company at the e-mail addresses and telephone
numbers provided by the
learned counsel for the insurer.
The impugned order is modified to this extent. (details redacted)

4 Learned counsel for the appellant submitted that the consent

which was given was for modification of
the impugned award and not
for the prosthetic limb to carry a lifetime warranty, as there is
no such thing
as a lifetime warranty for a prosthetic limb. Not
only that, the impugned directions require that if any,
repair or
replacement has to be done, the same should be done by the
Insurance Company and the insurer
was required to inquire from the
victim at least twice a year as to the working condition of the
prosthetic
limb with an email address and telephone number
specified. Thus, what has been directed by the High
Court is a
continuing maintenance of the prosthetic limb to be monitored by
the Insurance Company. We
may note that the aforesaid is the only
issue which is called upon by us to be examined.

5 We had stayed the operation of the aforesaid paragraphs by the

interim directions issued vide order
dated 15.2.2021.

6 We are of the view, that the aspect discussed in the aforesaid

paragraphs could be made only a part of
compensation, and not in
the nature of continuing directions. In this behalf, we have
noticed a view taken
by this Court vide order dated 06.8.2020 in
SLP(C) No.8631/2020 where the same learned judge has
taken a
similar view and that aspect of the order was deleted at the motion
stage without notice by the
Bench and thus we considered it
appropriate to issue notice to other side.

7 Learned counsel for the appellant has referred two judgments

of this Court before us in Nagappa v.
Gurudayal Singh & Others,
(2003) 2 SCC 274 and Sapna V. United India Insurance Co. Ltd. &
Anr. (2008) 7
SCC 613 opining that while determining compensation
under the said Act there is no provision providing
for passing of a
further award once the final award is passed. The future
eventualities are to be taken into
consideration at that time. It
was observed that:

23 . Future medical expenses required to be incurred

can be determined only on the basis of fair
guesswork
after taking into account increase in the cost of
medical treatment.

8 In our view, the process of determination of such compensation

cannot be by a continuing mandamus,
in a colloquial sense, and the
determination must take place at one go.

9 The aforesaid principle is not even disagreed to or contested

by the respondents but what is submitted
is that there must be a
provision made fixing a lump sum amount for maintenance/
replacement of the
prosthetic limb, if necessary. We agree with the
submission and in a larger canvas consider it appropriate
to direct
that in such kind of cases of providing facility of prosthetic
limb, appropriate amount may be
quantified towards such
maintenance.

10 We, thus, allow the appeal to the extent aforesaid and set
aside the paragraph Nos.7,8 & 9 to be
substituted by the
determination for maintenance/replacement of the prosthetic limb
while a
quantification of the amount for compensation is being
made.

11 The question which remains is whether we should remit this

case to the High Court to determine the
amount afresh having laid
down the principles, or we should determine it ourselves. In the
given facts of
the case, we do not consider it appropriate to remit
the case for fresh determination and instead take on
the burden
ourselves to do complete justice.

12 In order to facilitate determination of the lump sum amount,

we call upon the learned counsel for
respondent No.1 to file an
affidavit setting forth the cost of the prosthetic limb purchased
by him along
with supporting documents. He should also file
supporting documents of the company from which he
purchased the
prosthetic limb, to show what kind of maintenance/replacement would
be required. On
these documents being filed, we would determine the
amount.

13 On the other aspects the appeal stands disposed of.

Let the affidavit be filed within four weeks, as
prayed for.
Reply to the same be filed within two weeks, thereafter.
List after six weeks.

CIVIL APPEAL No.4577/2021

14 Leave granted.

15 The grievance of the Insurance Company arises from the

directions passed in the impugned order,
more specifically in
paragraph Nos.8 to 10, opining that assistance of two semi-skilled
workers on the
basis of minimum wages is to be provided to the
respondent from the date of the accident for the rest of
the
appellant s life. In order to sub-serve the said direction, inter
alia, sum of Rs.60 Lakhs is required to be
kept by the Insurance
Company in an interest bearing deposit, from which about
Rs.50,000/- per month
would be generated as interest to meet the
expenses of the assistants. The directions are contained in
the
following terms:

8. Presently, the appellant may have the benefit of his

caring parents but they cannot be expected to
be present
with him at all times, as they may be engaged in other
activities and/or be employed to
make provisions for the
family s needs. In the circumstances, the appellant shall
be paid
compensation towards the procurement of the
assistance of two semi-skilled worker on the basis of
minimum wages, from the date of the accident and for the
rest of the appellant's life.

9. The arrears towards the same shall be paid by the

insurer, on the basis of notified minimum wage
rates
applicable to a semi-skilled worker. The arrears shall be
deposited directly into the bank
account of the appellant,
jointly operated by his parents, in a month s time, along
with interest
accrued thereon @ 9% p.a. Payments apropos
attendant charges in the future shall also be ensured
by
the insurer. The current minimum wage rate of a semiskilled workman is approximately
Rs.18,000/-. Accordingly,
Rs.36,000/- per month would be required to be paid to the
appellant. These
rates are revised twice a year.
Therefore, prudently provision should be made for
automatic crediting
of the current and future wages into
the appellant s bank account. Logically, the insurance
company
should assure about Rs.50,000/- per month as DFR
interest. According to the current FDR rates, a
deposit
Rs.60 lakhs is likely to fetch about Rs.50,000/- per month
as interest. Let Rs.60 lakhs be kept
in an interest
bearing FDR by the insurer in its own bank. The interest
earned therefrom, shall be
credited into the appellants account by the 10th day of each Gregorian calendar month,
on the basis
of notified minimum wages for two attendants.

10. Should the minimum wages be subsequently enhanced to a

quantum which does not meet the
interest generated from
the FDR, the insurer shall augment the deposit to meet the
shortfall. The
insurer shall have a lien on the deposit,
which it shall encash on the demise of the claimant.
We have
heard learned counsel for the parties and are of the
view that these directions are unsustainable.

16 The reason for the same is that they are contrary to the
judicial view adopted by this court in Nagappa
v. Gurudayal Singh &
Ors.- (2003) 2 SCC 274, Sapna v. United India Insurance Company
Ltd. & Anr. (2008)
7 SCC 613 & The Oriental Insurance Co. Ltd. v.
Zakir Hussain & Ors. [SLP (C) No.12210/2020 dated
13.10.2020]. In
these cases, this Court has opined that while determining the
compensation under the
said Act there is no provision for providing
for passing of further award once the final award is made. The
future eventualities are to be taken into consideration at that
time it has been observed that;

However, it is to be clearly understood that the MV Act

does not provide for passing of further award
after the final
award is passed. Therefore, in a case where injury to a
victim requires periodical
medical expenses, fresh award
cannot be passed or previous award cannot be reviewed when
the
medical expenses are incurred after finalisation of the
compensation proceedings. Hence, the only
alternative is that
at the time of passing of final award, the Tribunal/court
should consider such
eventuality and fix compensation
accordingly. No one can suggest that it is improper to take
into
account expenditure genuinely and reasonably required to
be incurred for future medical expenses.
Future medical
expenses required to be incurred can be determined only on
the basis of fair
guesswork after taking into account
increase in the cost of medical treatment.

17 The aforesaid aspect has been considered by us today in

another appeal filed by the same Insurance
Company in SLP (C)
No.16077/2020 dealing with the aspects of provisions for prosthetic
limb. The
principles which we have appreciated in the current case
are slightly different as though it may not be
strictly in the
nature of a continuing direction; but premised on the basis of a
continuing requirement, a
lump sum amount has been directed to be
deposited the returns from which are to be utilised. We are of
the
view that this is not the appropriate course to follow.

18 Learned counsel for the appellant has taken us through various

judicial pronouncements which show
that the approach which has been
adopted by different courts is of giving a lump sum amount. The
moot
point however remains as to how the lump sum amount is to be
calculated.

19 We find that in case of extreme injuries affecting the mental

and physical abilities of a person, a similar
approach has been
adopted by this Court in Kajal V. Jagdish Chand & Ors. (2020) 4 SCC
413.

20 No doubt the factual matrix in that case painted a very grim

picture of young girl who suffered an
accident and as result
thereof while physically she would age, her mental state would
remain under one
year of age. In that scenario, a methodology was
suggested to apply the multiplier method while
determining the
attendant charges. We consider it useful to reproduce the
observations as under:-

Attendant Charges

22. The attendant charges have been awarded by the High

Court @Rs.2,500/- per month for 44
years, which works out
to Rs.13,20,000/-.Unfortunately, this system is not a
proper system. Multiplier
system is used to balance out
various factors. When compensation is awarded in lump sum,
various
factors are taken into consideration. When
compensation is paid in lump sum, this Court has always
followed the multiplier system. The multiplier system
should be followed not only for determining
the
compensation on account of loss of income but also for
determining the attendant charges etc.
This system was
recognised by this Court in Gobald Motor Service Ltd. v.
R.M.K. Veluswami (AIR
1962 SC 1).The multiplier system
factors in the inflation rate, the rate of interest payable
on the lump
sum award, the longevity of the claimant, and
also other issues such as the uncertainties of life. Out
of all the various alternative methods, the multiplier
method has been recognised as the most
realistic and
reasonable method. It ensures better justice between the
parties and thus results in
award of just compensation within the meaning of the Act.

23. It would be apposite at this stage to refer to the

observation of Lord Reid in Taylor v. O Connor
(1971 AC
115):

"Damages to make good the loss of dependency over a

period of years must be awarded as a lump
sum and that
sum is generally calculated by applying a multiplier to
the amount of one year's
dependency. That is a
perfectly good method in the ordinary case but it
conceals the fact that there
are two quite separate
matters involved, the present value of the series of
future payments, and the
discounting of that present
value to allow for the fact that for one reason or
another the person
receiving the damages might never
have enjoyed the whole of the benefit of the
dependency. It is
quite unnecessary in the ordinary
case to deal with these matters separately. Judges and
counsel
have a wealth of experience which is an
adequate guide to the selection of the multiplier and
any
expert evidence is rightly discouraged. But in a
case where the facts are special, I think, that these
 matters must have separate consideration if even rough
justice is to be done and expert evidence
may be
valuable or even almost essential. The special factor
in the present case is the incidence of
Income Tax and,
it may be, surtax."

24. This Court has reaffirmed the multiplier method in

various cases like Municipal Corporation of
Delhi v.
Subhagwati (1966 ACJ 57), U.P. State Road Transport
Corporation and Ors. v. Trilok Chandra
and Ors. [(1996) 4
SCC 362], Sandeep Khanduja v. Atul Dande and Ors. [(2017) 3
SCC 351]. This
Court has also recognised that Schedule II
of the Act can be used as a guide for the multiplier to be
applied in each case. Keeping the claimant s age in mind,
the multiplier in this case should be 18 as
opposed to 44
taken by the High Court.

25. Having held so, we are clearly of the view that the
basic amount taken for determining attendant
charges is
very much on the lower side. We must remember that this
little girl is severely suffering
from incontinence meaning
that she does not have control over her bodily functions
like passing
urine and faeces. As she grows older, she will
not be able to handle her periods. She requires an
attendant virtually 24 hours a day. She requires an
attendant who though may not be medically
trained but must
be capable of handling a child who is bed ridden. She would
require an attendant
who would ensure that she does not
suffer from bed sores. The claimant has placed before us a
notification of the State of Haryana of the year 2010
wherein the wages for skilled labourer is
Rs.4846/- per
month. We, therefore, assess the cost of one attendant at
Rs.5,000/ and she will
require two attendants which works
out to Rs.10,000/ per month, which comes to Rs.1,20,000/-
per
annum, and using the multiplier of 18 it works out to
Rs.21,60,000/-for attendant charges for her
entire life.
This takes care of all the pecuniary damages.

21 Learned counsel for the appellant did seek to persuade us that

this is not the only methodology
available and it should not be
adopted. We are of the view that in cases where the degree of
disability is
high, there is mental disability, it is a case of a
young person etc. without it being possible to anticipate all
possibilities, the course followed aforesaid would be the
appropriate course. We are not saying that the
aforesaid can be the
only course, and in a different scenario, lump sum amount can be
assessed as has
been as done in Lalan D. @ Lal & Another v.
Oriental Insurance Company Limited, (2020) 9 SCC 805 and
Parminder
Singh v. New India Assurance Company Limited & Others, (2019) 7 SCC
217.

22 Learned Senior Counsel for the appellant also sought to point

out another course followed in
Mallikarjun v. Divisional Manager,
National Insurance Company Limited & Another, (2014) 14 SCC 396,
wherein cases of children suffering disability on account of motor
vehicle accident, a broad principle was
sought to be laid down in
the following terms:-

12. Though it is difficult to have an accurate assessment

of the compensation in the case of children
suffering
disability on account of a motor vehicle accident, having
regard to the relevant factors,
precedents and the approach
of various High Courts, we are of the view that the
appropriate
compensation on all other heads in addition to
the actual expenditure for treatment, attendant, etc.,
should be, if the disability is above 10% and upto 30% to
the whole body, Rs.3 lakhs; upto 60%, Rs.4
lakhs; upto 90%,
Rs.5 lakhs and above 90%, it should be Rs.6 lakhs. For
permanent disability upto
10%, it should be Re.1 lakh,
unless there are exceptional circumstances to take
different yardstick. In
the instant case, the disability is
to the tune of 18%. Appellant had a longer period of
hospitalization
for about two months causing also
inconvenience and loss of earning to the parents.

23 The aforesaid only shows that there is more than one option
available i.e, there may be a lump sum
amount specified on general
principles as enunciated aforesaid; or in cases where the factual
scenario
requires, same multiplier method can be followed as in the
case of Kajal (supra).

24 Now turning to the facts of the present case, the child was 11
years of age when he suffered functional
disability which has been
assessed at 70% by the medical board and the tribunal, and which
the High
Court determined as 100% functional disability. It is in
these circumstances that the direction has been
passed for
attendants with a methodology of accessing the minimum wages
payable for two skilled
workers. In the given factual scenario, we
are of the view that the apposite course to follow is set out in
Kajal s case (supra).

25 On having reached that conclusion, the issue would be what

would be the lump sum amount to be
determined to be paid on those
parameters.
26 We find that in terms of the impugned order dated 08.12.2020,
the learned judge has since kept the
matter pending by issuing the
notice to the GNCTD to examine whether there could be a Government
policy in regard to assistance to be provided to permanently
disabled adolescents whose parents are not
economically well off.

27 We are of the view that in pursuance to this conclusion, it is the

High Court which ought to examine as
to what would be the
appropriate lump sum amount to be determined based on the
multiplier basis as set
out in Kajal s case (supra).
We, thus, set aside the directions contained in the impugned
order in
paragraph Nos.8 to 10.

28 We also find that while seeking to examine the larger issues,

the learned judge has ventured into the
aspect of Government policy
to be framed in that behalf. This really amounts to beyond the
jurisdiction
over determination of the amount, in the Motor
Accident Claim proceeding, but on a larger canvas taking
the colour
of a Public Interest Litigation. We, thus, consider it appropriate
that this aspect ought to be
examined by the Bench dealing with the
Public Interest Litigation, as a larger canvas would have to be
determined rather than something restricted to the case of the
respondent before us.

29 The civil appeal is allowed in the aforesaid terms leaving

parties to bear their own costs.
 SUPREME COURT OF INDIA (D.B.)

ORIENTAL INSURANCE COMPANY LIMITED

21
V/S
KAHLON @ JASMAIL SINGH KAHLON (DECEASED)

Date of Decision: 16 August 2021

Citation: 2021 LawSuit(SC) 426

Hon'ble Judges: Navin Sinha, R Subhash Reddy

Case Type: Civil Appeal

Case No: 4800 of 2021

Subject: Motor Vehicle

Acts Referred:
Motor Vehicles Act, 1988 Sec 166(1)(c), Sec 166(1)(a)

Final Decision: Appeal allowed

Advocates: H Chandra Sekhar, Nikhil Goel

Cases Referred in (+): 14

Navin Sinha, J.

[1] Leave granted.

[2] A claim arising out of injuries caused in a motor accident that has reached its
fruition more than 20 years later before this Court, which we find extremely
distressing. The original claimant and his wife, both did not survive the ordeal to see
the fruits of the litigation which is now being pursued by their daughter.

[3] The facts of the case in a nutshell are that the original claimant was severely
injured in a motor accident on 02.05.1999. He filed a claim for compensation under
Section 166(1)(a) of the Motor Vehicles Act, 1988 (hereinafter referred to as 'the Act').
The Motor Accidents Claims Tribunal on 02.11.2006 awarded him a sum of
Rs.1,00,000/- only with 9% interest. Dissatisfied, the original claimant preferred an
appeal before the High Court. Unfortunately, he was deceased on 06.11.2015 during
the pendency of the appeal, not attributed to the injuries suffered in the accident. The
daughter of the claimant, who was an unmarried girl aged 21 years at the time of the
Page 1 of 7
accident, was substituted in the appeal. The High Court substantially enhanced the
compensation.

[4] Shri H. Chandra Sekhar, learned counsel on behalf of the appellant, submits that
the cause of action being personal to the injured abates on his death, which was not
caused due to the accident. The legal heir is entitled only to such compensation which
forms part of the estate of the deceased. Loss of salary, future prospects, pain and
suffering along with attendant charges do not form part of the estate of the deceased.
The compensation could not have been fixed by application of multiplier as it was not a
case of death caused or occasioned by or due to the accident. The amount awarded by
the Tribunal would alone form part of the estate of the deceased. Reliance in support of
the submissions has been placed on two Full Bench decisions of the Karnataka High
Court in Kanamma vs. Deputy General Manager, 1990 ILR(Kar) 4300, Uttam Kumar vs.
Madhav and Another, 2002 ILR(Kar) 1864, Umedchand Golcha vs. Dayaram and
Others, 2002 1 MPLJ 249, Pravabati Gosh and another vs. Gautam Das and
others,2009 4 GLR 64. The respondent being a married daughter is not entitled to any
claim for any other loss of estate of the deceased as she was not dependent on the
deceased. It is lastly submitted that the High Court has erred in not deducting 1/3rd of
the compensation amount towards personal expenses by the deceased.

[5] Shri Nikhil Goel, learned counsel on behalf of the respondent no.1, submits that no
deduction towards personal expenses can be made as the deceased actually incurred
expenses during his lifetime. The deduction is to be made hypothetically only in a case
where death has occurred, relying on Raj Kumar vs. Ajay Kumar and another, 2011 1
SCC 343. The submission of Shri Goel is that it is only a claim for personal injuries that
will abate with the death of the deceased. The claims such as loss of income, medical
expenses etc. will survive as part of the loss to the estate. He relies upon Surpal Singh
Ladhubha Gohil vs. Raliyatbahen Mohanbhai Savlia and Ors., 2009 2 GLH 217, Munni
Devi and Others vs. New India Assurance Co. Ltd., 2003 103 DLT 464, Venkatesan vs.
Kasthuri, 2014 ACJ 1621 and Maimuna Begum and others vs. Taju and Others, 1989
MhLJ 352. Shri Goel next submits that the High Court has committed no error in
awarding loss of income along with future prospects with a multiplier of 11 relying on
Parmindar Singh vs. New India Assurance Co. Ltd. & Ors., 2019 7 SCC 217and Kajal
vs. Jagdish Chand & Ors., 2020 4 SCC 413. The injured had suffered 100 per cent
physical disability. He was unable to pursue his life and career and had to leave his job
and shift to his home town Punjab. Despite being a law graduate and professionally
qualified with a Diploma in Labour Laws, he was unable to pursue any independent
career thereafter because of complete physical disability. The compensation as
enhanced by the High Court is, therefore, not on account of personal injuries, but as
loss of the estate of the deceased, and therefore, calls for no interference.

Page 2 of 7
[6] We have considered submissions on behalf of the parties. The original claimant
was travelling with his wife and unmarried daughter when their vehicle was hit by a
lorry driven rashly and negligently on 02.05.1999. The claimant was taken to the
Government Hospital, Trivandrum but the severity of the injuries required him to be
shifted to the Apollo Hospital, Chennai the next day for professionalized management
where he remained under treatment till 24.11.1999. He suffered spinal shock, with
cervical cord injury and quadriplegia with respiratory failure. He was resuscitated and
put on ventilator support for skull traction. His right ankle needed surgery. He required
further treatment for anterior decompression, disc excision and bone grafting. His
physical activity was by way of wheel chair mobilisation. The disability certificate dated
16.06.2000 issued to him by the Government Headquarter Hospital, Cuddalore opined
100 per cent permanent motor system disability with operative scar on the right-side
neck, right ankle, healed scar on the left side forehead frontal region and parietal
region and that he was unable to lift all four limbs which were vested with sensory loss
present in certain places classified as quadriplegic orthopedically.

[7] The claimant was a law graduate with a Diploma in Personal Management and
Labour Welfare from the Punjab University. Because of the injuries, he found it difficult
and inconvenient to continue with his job as Deputy General Manager and resigned
pre-maturely on 30.09.2001 at the age of 53 years before his scheduled
superannuation on 30.04.2006. Unable to pursue his life and career with the burden of
treatment and family expenses in the changed circumstances in Cuddalore, he moved
this Court in T.P.(C) No. 1043 of 2003 for transfer of the claim case filed by him in
Cuddalore in the year 2000 which was allowed on 25.02.2004. The proceedings were
shifted to Gurdaspur in Punjab.

[8] The Tribunal in a very cursory and cryptic manner awarded a compensation of
Rs.1,00,000/- along with 9% interest. The claimant then moved the High Court which
has enhanced the compensation to Rs.37,81,234/- by taking into account his annual
salary with future prospect applying the multiplier of 11 including pain and suffering,
attendant's charges.

[9] The Act is a beneficial and welfare legislation. Section 166(1) (a) of the Act
provides for a statutory claim for compensation arising out of an accident by the
person who has sustained the injury. Under Clause (b), compensation is payable to the
owner of the property. In case of death, the legal representatives of the deceased can
pursue the claim. Property, under the Act, will have a much wider connotation than the
conventional definition. If the legal heirs can pursue claims in case of death, we see no
reason why the legal representatives cannot pursue claims for loss of property akin to
estate of the injured if he is deceased subsequently for reasons other than attributable
to the accident or injuries under Clause 1(c) of Section 166. Such a claim would be

Page 3 of 7
completely distinct from personal injuries to the claimant and which may not be the
cause of death. Such claims of personal injuries would undoubtedly abate with the
death of the injured. What would the loss of estate mean and what items would be
covered by it are issues which has to engage our attention. The appellant has a
statutory obligation to pay compensation in motor accident claim cases. This obligation
cannot be evaded behind the defence that it was available only for personal injuries
and abates on his death irrespective of the loss caused to the estate of the deceased
because of the injuries.

[10] In Umed Chand (supra), giving a broad liberal interpretation to the provisions of
the Act so that legal representatives do not suffer injustice, it was observed that the
claim for personal injuries will not survive on death of the injured unrelated to the
accident but the legal representatives could pursue the claim for enhancement of the
claim for loss of the estate which would include expenditure on medical expenses,
travelling, attendant, diet, doctor's fee and reasonable monthly annual accretion to the
estate for a certain period. It is trite that the income which a person derives
compositely forms part of the expenditure on himself, his family and the savings go to
the estate. The unforeseen expenses as aforesaid naturally have to be met from the
estate causing pecuniary loss to the estate.

[11] In Maimuna Begum (supra) the defence under Section 306 of the Indian
Succession Act, 1925 on the old English Common Law maxim "actio personalis moritur
cum persona" was rejected opining that it would be unjust to non-suit the heirs on that
ground.

[12] In Venkatesan (supra), the injured claimant preferred an appeal dissatisfied,

but was deceased during the pendency of the appeal. Compensation came to be
awarded under the Act for loss of estate keeping in mind the nature of the injuries, the
treatment, the expenditure incurred and loss of income.

[13] In Surpal Singh (supra), Justice K.S. Radhakrishnan, C.J. (as he then was),
observed that the Act was a social welfare legislation providing for compensation by
award to people who sustain bodily injuries or get killed. The grant of compensation
had to be expeditious as procedural technicalities could not be allowed to defeat the
just purpose of the act. The Courts in construing social welfare legislations had to
adopt a beneficial rule of construction which fulfils the policy of the legislation favorable
to those in whose interest the Act has been passed. Judicial discipline demanded that
the words of a remedial statutes be construed so far as they reasonably admit so as to
secure that relief contemplated by the statute and it shall not be denied to the class
intended to be relieved. Rejecting the maxim of "actio personalis moritur cum persona"

Page 4 of 7
on the premise that it was an injury done to the person and the claim abated with his
demise it was observed:

"11. The question as to whether injury was personal or otherwise is of no

significance so far as the wrong doer is concerned and he is obliged to make good
the loss sustained by the injured. Legal heirs and legal representatives would have
also suffered considerable mental pain and agony due to the accident caused to
their kith and kin. Possibly they might have looked after their dear ones in different
circumstances, which cannot be measurable in monetary terms. We are therefore in
full agreement with the view expressed by the learned Single Judge of this Court in
Gujarat State Road Transport Corporation's case (supra) that even after death of
the injured, the claim petition does not abate and right to sue survives to his heirs
and legal representatives."

[14] This view has subsequently been followed in a decision authored by brother
Justice M.R. Shah J., (as he then was) in Madhuben Maheshbhai Patel vs. Joseph
Francis Mewan and Others, 2015 2 GLH 499, holding as follows:

"12 .Considering the aforesaid decision of the Division Bench of this Court in the
case of Surpal Singh Ladhubha Gohil (supra); decisions of the learned Single Judge
of this Court in the case of Jenabai Widow of Abdul Karim Musa (supra) and in the
case of Amrishkumar Vinodbhai (supra); and aforesaid two decisions of the learned
Single Judge of the Rajasthan High Court, we are of the opinion that maxim "actio
personalis moritur cum persona" on which Section 306 of the Indian Evidence Act
(sic Indian Succession Act) is based cannot have an applicability in all actions even
in an case of personal injuries where damages flows from the head or under the
head of loss to the estate. Therefore, even after the death of the injured claimant,
claim petition does not abate and right to sue survive to his heirs and legal
representatives in so far as loss to the estate is concerned, which would include
personal expenses incurred on the treatment and other claim related to loss to the
estate. Under the circumstances, the issue referred to the Division Bench is
answered accordingly. Consequently, it is held that no error has been committed by
the learned Tribunal in permitting the heirs to be brought on record of the claim
petition and permitting the heirs of the injured claimant who died subsequently to
proceed further with the claim petition. However, the claim petition and even
appeal for enhancement would be confine to the claim for the loss to the estate as
observed hereinabove."

[15] Similar view has been taken by the Punjab & Haryana High Court in Joti Ram vs.
Chamanlal, 1985 AIR(P&H) 2and the Madras High Court in Thailammai vs. A.V.
Mallayya Pillai, 1991 ACJ 185 (Mad).

Page 5 of 7
[16] The view taken in Kanamma (supra) and Uttam Kumar (supra) that the claim
would abate is based on a narrow interpretation of the Act which does not commend to
us. The reasoning of the Gujarat High Court is more in consonance with aim, purpose
and spirit of the Act and furthers its real intent and purpose which we therefore
approve.

[17] The injuries suffered by the deceased in the accident required prolonged
hospitalization for six months. The extent of disability suffered was assessed on
16.06.2000 as 100%. The extent of disability, pursuant to physiotherapy was
reassessed as 75% on 08.08.2002. In the interregnum, the injured resigned his job on
30.09.2001 at the age of 53 years as he found movement difficult and inconvenient
without an attendant as distinct from complete immobility. The injured was possessing
professional qualifications in labour laws and Industrial relations along with a Diploma
in Personnel Management. He may have had to suffer some handicap in also practicing
before the labour court, but cannot be held to have suffered 100% physical disability
as his capacity for rendering advisory and other work coupled with movement on a
wheel chair with the aid of an attendant could still facilitate a reduced earning capacity.
It cannot be held that the injured was completely left with no source of livelihood
except to deplete his estate. In assessing, what has been described as a 'Just
Compensation' under the Act, all factors including possibilities have to be kept in mind.

[18] The Tribunal, on technicalities rejected his claim for salary, medical expenses and
percentage of disability and granted a measly compensation of Rupees one lakh only
by a cryptic order. We are, therefore, of the opinion that while the claim for personal
injuries may not have survived after the death of the injured unrelated to the accident
or injuries, during the pendency of the appeal, but the claims for loss of estate caused
was available to and could be pursued by the legal representatives of the deceased in
the appeal.

[19] In Parminder Singh (supra) compensation on the basis of complete loss of

income, the percentage of disability, future prospects were granted applying the
relevant multiplier. Again, in Kajal (supra) the injured was assessed as 100 per cent
disabled, considering all of which compensation was awarded on the notional future
prospects along with relevant multiplier. The loss of income to the injured in the facts
of the present case has to be assessed at 75%. In view of Raj Kumar (supra) there
shall be no deduction towards personal expenses.

[20] We see no reason to deviate from the consistent judicial view taken by more than
one High Court that loss of estate would include expenditure on medicines, treatment,
diet, attendant, Doctor's fee, etc. including income and future prospects which would

Page 6 of 7
have caused reasonable accretion to the estate but for the sudden expenditure which
had to be met from and depleted the estate of the injured, subsequently deceased.

[21] However, the compensation under the head pain and suffering being personal
injuries is held to be unsustainable and is disallowed. The High Court has not awarded
anything towards medical expenses despite hospitalisation for six months being an
admitted fact. We therefore award a sum of Rs.1,00,000/- towards medical expenses.
Hence, the reassessed total compensation would be Rs.28,42,175/-, calculated
hereunder:

Sl. Heads Calculation

No.
1. Annual Salary Rs. 25084*12= Rs. 3,01,008/-
After deducting 25%
75% of the annual salary will be
=Rs. 2,25,756/-
2. 15% Future 15% of 2,25,756= Rs. 33,863.4
Prospects Rs. 2,25,756+33,863= Rs.
2,59,619/-
3. Applying Rs. 2,59,619*11= Rs.
multiplier of 11 28,55,809/-
4. 10% of the Rs. 2,25,7561,50,000=
income tax 75,756,
deducted for 15 10% of 75,756= 7575.60
years For 15 years = 7575.6*15= Rs.
1,13,634/-
5. Medical Rs. 1,00,000/-
Expensesz
6. Attendant Rs. 1,00,000/-
Charges
7. Grand Total Rs. 29,42,175/-
8. Compensation Rs.1,00,000/-
already
awarded by the
Tribunal and paid
9. Net Total (7)(8) Rs.28,42,175/-

[22] The appellant is therefore directed to pay to respondent no.1 within a period of
four weeks Rs.28,42,175/- along with interest @ 9% p.a. from the date of filing of the
claim petition, till its realisation.

[23] The appeal is partly allowed to the extent indicated above.

Page 7 of 7
 22
2007 (0) AIJEL-HC 217370

GUJARAT HIGH COURT

Hon'ble Judges:M.S.Shah and Akil Kureshi JJ.

Kusumben Vipinchandra Shah And Anr. Versus Arvindbhai Narmadashankar Raval And Ors.

First Appeal No. 4543 of 2006 ; *J.Date :- FEBRUARY 08, 2007

MOTOR VEHICLES ACT, 1988 Section - 166

Cases Referred To :

1. Amarsi Jugabhai & Ors. V/s. Vijayaben Hemantlal Dhulia, 1996 1 GLH 1007 : 1996 (3) GLR 493 :
1993 AIJEL_HC 200441
2. Gujarat State Road Transport Corporation V/s. Gurunath Shahu & Ors., 1989 0 ACJ 314 : 1989
(1) GLR 581 : 1989 (2) GLH 243 : 1990 (68) CC 121 : 1989 (1) TAC 178

Cited in :

1. (Referred To) :- Patel Jiviben Wd/o Kashiram Ramchanddas Vs. Chauhan Mehbubkhan
Abdulkhan, 2015 JX(Guj) 1709 : 2015 AIJEL_HC 234867
2. (Relied on) :- New India Assurance Company Limited Vs. Josnaben @ Jashuben Vallabhbhai,
2008 (4) GLR 2876 : 2009 (1) GCD 207 : 2009 (2) ACC 378 : 2008 JX(Guj) 101 : 2008 AIJEL_HC
219962
3. (Relied on) :- Mayaben Ramanlal Jaiswal Vs. Rajubhai Chimanlal Jaiswal, 2013 (3) GLR 1993 :
2013 (34) GHJ 160 : 2014 ACJ 859 : 2014 (1) CivLJ 400 : 2013 (1) TAC 335 : 2014 AAC 180 :
2014 (4) AICJ 57 : 2015 (1) AndhWR 19 : 2013 JX(Guj) 183 : 2013 AIJEL_HC 229414
4. (Referred To) :- Minakshi @ Minaben Sureshbhai Patel Vs. Ramdas Diwarsinh Thakore, 2013 (3)
ACC 15 : 2013 AIJEL_HC 235434
5. (Referred To) :- New India Assurance Company Limited Vs. Minor Himaniben And 5, 2016 ACJ
1371 : 2015 (3) TAC 691 : 2015 (4) ACC 273 : 2016 AAC 474 : 2016 (2) AllMR 62 : 2015 JX(Guj)
444 : 2015 AIJEL_HC 232670
6. (Referred To) :- Ranchhodbhai Maadhabhai Kotadia Vs. Zahid Ishakbhai Dalvadi, 2015 JX(Guj)
443 : 2015 AIJEL_HC 232669
7. (Referred To) :- Oriental Insurance Company Limited Vs. Raval Rupsibhai Pasabhai-deceased,
2015 (1) GLR 216 : 2015 ACJ 2698 : 2015 (2) CivLJ 364 : 2016 (2) TAC 545 : 2016 (1) ACC 379 :
2014 AAC 2878 : 2014 JX(Guj) 440 : 2014 AIJEL_HC 231400
8. (Referred To) :- Lalabhai Mavjibhai Parmar Vs. Raval Natvarbhai Melabhai, 2016 JX(Guj) 497 :
2016 AIJEL_HC 235066
9. (Referred To) :- Mehta Arvindbhai Bhogilal Vs. Chandubhai Danabhai Chauhan, 2014 JX(Guj) 726
: 2014 AIJEL_HC 231721
Equivalent Citation(s):
2007 (1) GLH 601 : AIR 2007 Guj 121

JUDGMENT :-

M.S.SHAH, J.

1 This appeal at the instance of the claimants under Sec. 173 of the Motor Vehicles Act, 1988 is
directed against the judgment and award dated 20.2.2006 of the Motor Accident Claims Tribunal,
Baroda in MAC Petition No.691 of 1995 in so far as the Tribunal after having determined the amount
of compensation at Rs.3,15,000/-- has made the award for only Rupees 1,26,000/-- with proportionate
costs and interest at the rate of 7.5% per annum.

2 The appellants are the parents of one Sanjiv, a young qualified engineer who died at the age of 24
years in a motor vehicle accident between a jeep belonging to the Guj. Electricity Board where the
deceased was employed as an Electrical Engineer and a truck. The jeep belonging to the Guj.
Electricity Board and registered in the name of its Executive Engineer (Transmission) was insured by
respondent No.3- New India Assurance Co. Ltd.. The parents of the deceased filed the claim petition
for compensation of Rs.10 lakhs. Respondent No.3 - Insurance Company contested the claim petition
and contended in its written statement at Exh.31 that since the driver of the truck involved in the
accident was not joined, the claim petition was liable to be dismissed for non-joinder of a necessary
party. The contention was also pressed in service at the hearing of arguments. However, relying on the
decision of another Division Bench of this Court in Amarsi Jugabhai & Ors. V/s. Vijayaben Hemantlal
Dhulia, 1996 (1) GLH 1007 = 1996 (3) GLR 493, the Tribunal overruled the objection and held that this
was a case of composite negligence and not a case of contributory negligence because the deceased
was not driving either of the two vehicles, but the deceased was a mere passenger in the jeep insured
by respondent No.3-Insurance Company. On facts, the Tribunal attributed 60% responsibility of the
accident to the truck driver and 40% to the jeep driver. The Tribunal thereafter determined the amount
of compensation at Rs.3,15,000/--, but on the ground that the negligence of the jeep driver was only
40%, the Tribunal slashed the amount of compensation payable by the driver, owner and insurer of the
jeep to Rs.1,26,000/--. The claimants are aggrieved by this slashing of compensation.

3 Mr MTM Hakim, learned counsel for the appellant-claimants has submitted that the settled legal
principles enunciated by this Court with utmost clarity have not been properly appreciated by the
Tribunal. It is submitted that after rightly overruling the preliminary contention urged on behalf of
respondent No.3 that the claim petition was not maintainable on account of non-joinder of the
driver/owner of the truck, the Tribunal erred in not making the award for the entire compensation
amount against the present respondents, i.e. driver/owner/insurer of the jeep.

4 On the other hand, Mr Hasmukh Thakker with Mr Palak Thakker for respondent No.3-Insurance
Company (insurer of the jeep) has supported the award of the Tribunal and submitted that since the
claim petition was filed under Sec. 166 of the Act, the liability to pay compensation arises only upon
proof of negligence and, therefore, once the negligence of the jeep driver was determined at only 40%
the award of the Tribunal requiring respondent No.3-Insurance Company to pay only 40% of the
compensation amount determined by the Tribunal is legal and proper.

5 In Amarsi Jugabhai & Ors. V/s. Vijayaben Hemantlal Dhulia, 1996 (1) GLH 1007 = 1996 (3) GLR 493,
this Court was concerned with a similar controversy involving the accident between a truck and a car.
The claim petition was filed only against the driver/owner/insurer of the truck without impleading
either the heirs of the driver-cum-owner of the car who died in the accident or the Insurance Company
with which the said car was insured. The Tribunal found that the accident took place on account of
composite negligence of the truck driver and the deceased car driver determined by the Tribunal in the
ratio of 75:25 per cent respectively. The Tribunal fastened joint and several liability to satisfy the
award of the entire compensation amount on the driver/owner/insurer of the truck. The
driver/owner/insurer of the truck filed First Appeal before this Court contending that in view of the
specific plea raised by the appellants before the Trial Court that the driver/owner/insurer of the car
were necessary parties, the Tribunal ought not to have made the award against the insurer of the truck
to pay the entire amount of compensation.

6 After examining all the previous decisions of this Court and also the leading books on the subject,
including Pollock, the Division Bench held that where a person is injured without his own negligence
but on account of the negligence of the two drivers of the colliding vehicles, it is a case of composite
negligence and the plaintiff is not bound to a strict analysis of the proximate or immediate cause of
the event to find out whom he can sue. Subject to the rule as to remoteness of damage, he is entitled
to sue all or any of the negligent persons and it is no concern of his whether there is any duty or
contribution or indemnity as between those persons, though in any case he cannot recover in the
whole more than his whole damages. He has a right to recover the full amount of damage from any of
the joint tortfeasors. Those who are sued cannot insist on having the others being joined as
defendants because the liability of the joint tortfeasors is joint and several. Every wrong doer is liable
for the whole damage and it does not matter whether they acted between themselves as equals. This
Court further held that the defendant who is compelled to pay the entire amount of damages decreed
has a right to contribution from the other wrong doer. The liability in the case of composite negligence,
normally should not be apportioned, as both wrong doers are jointly and severally liable for the whole
loss. Rule of apportionment of liability applies in a case of contributory negligence, i.e. where the
injured himself is also guilty of negligence.
The Division Bench also dealt with the discordant note
sounded in Guj. State Road Transport Corporation V/s. Gurunath Shahu & Ors., 1989 ACJ 314 and held
that when the opponents in the claim petition apply for bringing the other joint tortfeasor on record,
the Tribunal should normally allow such application but the claim petition does not cease to be
maintainable merely because all the joint tortfeasors are not joined as party defendants. It further held
that the finding given by the Tribunal in such a case regarding apportionment of liability would be
tentative for the purpose of subsequent proceeding which may be filed by the defendant tortfeasor
against the other joint tortfeasor who was not a party to the first proceeding. But this tentativeness for
the purpose of contribution between two joint tortfeasors does not at all affect the right of the
plaintiff-claimant to recover the full damages from the defendant tortfeasor against whom the first
proceeding is filed.

7 In view of the above settled legal position, we find considerable substance in the submission of the
learned counsel for the appellant-claimants that the Tribunal after having determined the
compensation at Rs.3,15,000/-- with proportionate costs and interest erred in slashing down the
compensation to Rupees 1,26,000/--.

8 The appeal is accordingly allowed. The amount of compensation awarded by the Tribunal is
enhanced to Rs.3,15,000/-- and it is held that the appellant- original claimants are entitled to recover
the entire amount of compensation with proportionate costs and interest at the rate of 7.5% per
annum jointly and severally from all the respondents herein. Respondent No.3-Insurance Company
shall deposit the additional amount of compensation as per this judgment within two months from the
date of receipt of certified copy of this judgment.
It is, however, clarified that it will be open to the
respondents herein to institute appropriate proceedings against the other tortfeasors in accordance
with the principles laid down by this Court in Amarsi Jugabhai & Ors. V/s. Vijayaben Hemantlal Dhulia,
1996 (1) GLH 1007 = 1996 (3) GLR 493.

9 The appeal is accordingly allowed in the aforesaid terms.

 23

2021 (0) AIJEL-HC 243219

GUJARAT HIGH COURT

Hon'ble Judges:Vikram Nath, R.M.Chhaya and B.N.Karia JJ.

Valiben Laxmanbhai Thakore (Koli) Wd/o Late Laxmanbhai ramsingbhai Thakore (Koli)
Versus Kandla Dock Labour Board

FIRST APPEAL No. 3907 of 2017 ; 3079 of 2017 ; 3191 of 2017 ; *J.Date :- AUGUST 27, 2021

MOTOR VEHICLES ACT, 1988 Section - 173

Cases Referred To :

1. Amrit Lal Sood Vs. Kaushalya Devi Thapar, 1998 3 SCC 744 : 1998 (2) GLR 1788 : 1998
(1) GLH 842 : 1998 (2) Scale 344 : JT 1998 (2) 484
2. General Assurance Society Ltd Vs. Chandumull Jain, AIR 1966 SC 1644
3. Gulam Rasool Rahman Malek Vs. Gsrtc, 2015 0 ACJ 20 : 2014 (1) GCD 450 : 2014 (35)
GHJ 513 : 2014 (3) TAC 560 : 2014 (2) ACC 95
4. Gulamrasul Rehman Malek Vs. Gsrtc, 2014 2 ACC 95 : 2014 (1) GCD 450 : 2014 (35)
GHJ 513 : 2015 ACJ 20 : 2014 (3) TAC 560
5. Maniben S Pandya Vs. Shashikant P.Shrigalor, 2004 3 GLR 1878 : 2005 (1) GCD 395 :
2004 (6) GHJ 714 : 2004 (23) AIC 891 : 2004 AIHC 4502
. Minu B. Mehta Vs. Balkrishna Ramchandra Nayan, AIR 1977 SC 1248
7. National Insurance Co. Ltd Vs. Prembai Patel And Ors, 2005 6 SCC 172
. National Insurance Co. Ltd Vs. R Mohan And R.Murthy, 1995 2 ACC 484
9. National Insurance Company Limited Vs. Mahadeb Kar & Ors, 1986 0 ACJ 362
10. New India Assurance Co. Ltd Vs. C.M.Jaya And Ors., 2002 2 SCC 278
11. New India Assurance Co. Ltd. Vs. Shanti Bai, 1995 2 SCC 539
12. New India Assurance Co. Vs. Kamlaben Widow Of Sumantrai, And Others, 34 GLR 779 :
1993 (1) GLH 961 : 1993 (1) GCD 778 : 1993 AIR Guj 171 : 1993 ACJ 673
13. Oriental Insurance Company Limited Vs Meena Variyal & Ors, 2007 5 SCC 428
14. Oriental Insurance Company Limited Vs. Jhuma Saha & Ors, AIR 2007 SC 1054
15. Tamil Nadu State Transportation Corporation Vs. Natarajan, 2003 6 SCC 137
1 . United India Ins. Co. Vs. Jagatsinh Valsinh, 1986 2 GLR 1423 : 1986 GLH 573 : 1986
ACJ 951 : 1986 (2) TAC 248 : 1986 (1) ACC 338
17. United India Insurance Company Limited Vs. M:s. Harchand Rai Chandan Lal, 2004 8
SCC 644
1 . United Indian Insurance Company Limited Vs. Mukeshbhai Bhikhabhai Prajapati & Ors,
First Appeal No. 2208 of 2007
19. Workmen s Compensation Act Of Harivadan Maneklal Modi & Anr. Vs. Chandrasinh
chhatrasinh Parmar & Ors., 28 2 GLR 1274 : 1987 (2) GLH 399 : 1988 AIR Guj 69 : 1988
ACJ 311 : 1988 (2) ACC 254
Equivalent Citation(s):
2021 JX(Guj) 439 : 2021 AIJEL_HC 243219

JUDGMENT :-

R.M.CHHAYA, J.

1 Identical issues are raised in all the appeals and referred

by the Division Bench, hence all
the appeals were heard
together and are dealt with by this common judgment
and order.

2 The facts as stated in First Appeal No.3907 of 2017 are

made basis of this judgment and
order.

2.1. The present appeal under Section 173 of the Motor

Vehicles Act, 1988 (hereinafter
referred to as the Act for sake of brevity) arises out of judgment and award
dated
28.07.2017 whereby learned Tribunal was pleased
to dismiss the claim petition of the
appellants. The
present appeal is filed by the legal heirs of deceased
Laxmanbhai
Thakore who succumbed to injuries in motor
accident which took place on 24.03.2003.
As per the
record, deceased Laxmanbhai Thakore was driving the
Ambulance bearing
registration no. GJ-12-T-1920 from
Gandhidham to Ahmedabad, during the course of
employment, with Kandla Dock Labour Board. As per the
facts which can be culled out
from the record, there were
three other occupants i.e. one second driver also an
employee of the Kandla Dock Labour Board, one patient
and one person accompanying
along with the patient, out
of them, three succumbed to the said injuries. Appellants
original claimants filed Claim Petition under Section 163
A of the Act which was
numbered as MACP No.300 of
2003, which came to be converted into Claim Petition
under Section 166 of the Act.

2.2. It was the case of the appellants original claimants

before the Tribunal that vide
policy at Exh. 66, additional
premium of Rs.30/-, vide Indian Motor Tariff Endorsement
No.19 was paid by the insured to the insurer towards the
legal liability for paid Drivers /
Workman No.2. It was
therefore, case of the appellant that liability of the
Insurer was
extended being contractual liability and not
restricted to statutory liability or act only
liability. It was
thus contended by the appellants that irrespective of
negligence of the
deceased, the Insurer would be liable
to pay the entire compensation to the appellants
original claimants as payable under Section 166 of the
Act. By the impugned judgment
and award dated
28.07.2017, the Tribunal dismissed the said claim
petition mainly
relying upon the ratio laid down by this
Court in Gulam Rasool Rahman Malek vs.
GSRTC reported
in 2015 ACJ 20. The Tribunal came to the conclusion that
deceased
driver of the Ambulance was found to be solely
negligent and therefore, appellants are
held not entitled
to any compensation under the Act. The said judgment
and award is
subject matter of challenge in the present
appeal under Section 173 of the Act.

2.3. The Division Bench of this Court, vide order dated

27.06.2018, has referred this
matter to the Larger Bench
and has framed the following question to be examined
and
answered by this Bench, which reads as under:
Whether the Division Bench of this
Court in the case
of Saberabibi Hisammiya Umarvmiya and Anr (supra_
laid down
correct law by holding that in view of
insured paying additional premium for the liability
of
the paid driver, the Insurance Company is liable to
pay compensation under the
Motor Vehicles Act
computed upon the death or injury caused to the
driver out of an
accident which arises solely on
account of driver s own negligence?
3 Heard Mr. M.T.M. Hakim, learned counsel along with Mr.
Hemal Shah, learned counsel for
the original claimantsappellants,
Mr. Maulik Shelat, Mr. Vibhuti Nanavati and
Dr. Rushang
Mehta, learned counsels for the insurance
Companies and Mr. Yogi Gadhiya, learned counsel
appearing for the Kandla Dock Labour Board in all these
appeals.

4 Mr. Hakim, learned counsel for the appellants has taken

this Court to the factual matrix
arising in the appeals and
has also relied upon the relevant evidence on record and
has
contended as under:

4.1. It was submitted by Mr. Hakim, learned counsel for the

appellants that the ratio
laid down by the Division Bench
of this Court in the case of Saberabibi Hisammiya
Umarvmiya & Anr. v. Yakubkhan Abdulkhan Kherwaji &
Ors. dated 15th October 1993
rendered in First Appeal
Nos. 124, 125, 1013 and 1383 of 1984 is the correct law.
Mr.
Hakim contended that the said judgment is on
identically similar facts arising in the
present appeals. Mr.
Hakim elaborately relied upon the said judgment and
further
contended that the same contentions which are
now raised by the respondent
Insurance Company in
these appeals were considered by the Division Bench.
Referring
to the judgment of the Calcutta High Court in
the case of National Insurance Company
Limited vs.
Mahadeb Kar & Ors reported in 1986 ACJ 362, it was
contended by Mr.
Hakim that IMT-19 has been correctly
interpreted by the Calcutta High Court wherein it
is held
that on payment of additional premium, the liability of
Insurer would be to pay
the full amount payable under
the Act on the principles embodied in the Workman
Compensation Act. Mr. Hakim also contended that said
ratio has been followed by this
Court in Saberabibi
Hisammiya Umarvmiya (supra), and thereafter, it has
been also
considered and relied upon by the Division
Bench in the case of Maniben S Pandya vs.
Shashikant P
Shrigalor reported in 2004(3) GLR 1878. Mr. Hakim also
further
contended that the said proposition is thereafter
followed many a times by this Court
and contended that
the Reference be answered accordingly. Mr. Hakim also
relied upon
the judgment of the Madras High Court in the
case of National Insurance Co. Ltd vs. R
Mohan and
R.Murthy reported in 1995(II) ACC 484.

4.2. Mr. Hakim also heavily relied upon the judgments of the
Hon ble Supreme Court in
the case of New India
Assurance Co. Ltd vs. C.M.Jaya and Ors reported in
(2002) 2
SCC 278 as well as in the case of National
Insurance Co. Ltd vs. Prembai Patel and Ors
reported in
(2005) 6 SCC 172 and contended that issue involved in
these appeals is
squarely covered by the ratio laid down
by the Hon ble Supreme Court in both these
cases.

4.3. Accordingly Mr. Hakim contended that once the

additional premium is paid and
accepted, the liability of
the insured is on the principles embodied under the
Workman
Compensation Act irrespective of negligence. It
was contended that when insurer
accepts additional
premium and covers the liability under the Common Law
or the
Motor Vehicles Act, the Insurer is bound to pay
compensation more than what is
payable statutorily
under the Workman Compensation Act and necessarily
irrespective
of negligence. It was therefore, contended
that the appellants would be entitled to total
compensation under the Act. Mr. Hakim also referred to
provisions of Sections 147 and
149 of the Act and
contended that on conjoint reading of the said provisions
of the Act,
it is clear that same are beneficial in nature to
protect the rights of victims of the
accident and their
entitlement of compensation, the term to indemnify has
to be read,
understood and interpreted to effectuate the
purpose of the Act and in favour of the
victims of the
accident. It was therefore, contended that once a policy
of Insurance is
issued under Section 147(3), the Insurer
shall be liable to indemnify the persons or
classes of
persons specified in the policy in respect of any liability,
which the policy
 purports to cover in the case of that
person or those classes of persons. Mr. Hakim,
therefore,
contended that once certificate of insurance is issued
under Section 147(3),
as per Section 149(1), the Insurer
is liable to satisfy the judgment and award against
the
persons insured save and except the defences available
to the Insurer under
Section 149(2).

4.4. It was contended by Mr. Hakim that judgments cited and

relied upon by the
Insurance Company would not be
applicable to the present case as the facts arising in
these appeals are different and distinct and in none of
the judgments, the issue of
additional premium and IMT-
19 endorsement arose and said vital aspect is not
considered in the judgments which are relied by the
respondent- Insurance Company.

4.5. It was contended by Mr. Hakim that as such the

provisions of the Act, Section
147(1)(b)(i) sub clauses (a)
or (b) or (c) and the IMT-19 endorsements is clear and
unambiguous and is held so by the Hon ble Supreme
Court in PremBai (supra) and as
Division Bench of this
Court in Sabera Bibi (supra) and other decisions.

4.6. It was further contended by Mr. Haikim that as per the

settled principles of
interpretation of the provisions of the
Act and the contract of insurance, it is settled law
that
the same are to be read with a benevolent eye without
considering the Insurer s
profitability and the victims of
accidents entitlement of compensation for the loss
sustained has to be the prime consideration. It was
further contended by Mr. Hakim
that the pirnciple of
contra proferentum is also applied to the contract of
insurance in
case of ambiguity in the terms of the
contract of insurance. It was also contended that
considering both the said propositions, as held by a
catena of decisions of the Hon ble
Supreme Court viz. (I)
Skandia Insurance (1987) 2 SCC 654, (ii) Sushilabai (2020
SCC
Online SC 367 or Civil Appeal No.2235 of 2020), the
IMT Endorsements being part of
the contract of Insurance
is required to be interpreted and applied to alleviate the
hardships and agonies of victims of accident rather than
benefit the Insurer in its
profits.

4.7. Mr. Hakim further contended that the liability of Insurer in

the present case is
required to be held beyond the
statutory liability that is covered under and upto the
extent of the Workman Compensation Act particularly, on
account of payment of
additional premium as per IMT-19.
It was further contended that the consistent view of
this
Court and Calcutta High Court on the issues are required
to be upheld and the
reference be answered accordingly.

5 Mr. Hemal Shah, learned counsel for the appellants in

their First Appeals has also adopted
the arguments made
by Mr. Hakim, learned counsel for the appellants of First
Appeal
No.3907 of 2017.

6 Per contra, Mr. Maulik Shelat, learned counsel for the

Insurance Company has contended
as under:

6.1. Mr. Shelat, contended that it is not in dispute that any

claim petition filed by
claimant under Section 166 of MV
Act than claimant carrying burden to prove
negligence of
driver to get compensation under MV Act as it is based
upon principle of
fault liability. Mr. Shelat contended that
once, it is established that driver of vehicle is
negligent
for causing accident which resulted into injury or death to
third party than
being principal tort-feasor, driver is liable
to pay compensation. It was also contended
that owner
of vehicle is vicariously liable for such tortious act of his
driver qua third
party to pay compensation. It was
contended by Mr, Shelat that the insurance company
having issued policy under chapter XI of MV Act is
required to indemnify owner of
vehicle for his vicarious
liability as per Sec. 147 of MV Act subject to terms of
policy.
Mr. Shelat further contended that thus, it is now
well settled principle of law that insurer
of motor vehicle
will indemnify insured-owner of vehicle against his
vicarious liability
which arise under MV Act for tortious
act of his driver subject to terms and conditions
and
provisions of MV Act.

6.2. Mr. Shelat contended that there is no cavil that motor

accident insurance policy is
an Indemnity Policy. It was
contended by Mr. Shelat that the liability of insurance
company is to the extent of indemnification of insured
against injured third person or
deceased s being third
party or in respect of third party property damaged as
per terms
of policy. If the insured cannot be fastened
with any liability under the provisions of MV
Act, the
question of insurer being liable to indemnify insured,
does not arise.

6.3. Relying upon the judgment of the Hon ble Supreme Court
in the case of Tamil
Nadu State Transportation
Corporation vs. Natarajan reported in 2003 (6) SCC 137,
Mr.
Sheltat contended that corporation as an employer
cannot be held to be vicariously
liable for the negligence
of claimant himself being driver of corporation bus. It was
further contended that thus, observation made by
Hon ble Calcutta High Court in
National Insurance
Company Ltd. V/s Mahdeb Kar & Ors. Reported in 1986
ACJ 362
(para-13) is impliedly overruled by said dictum of
Hon ble Apex Court. Mr. Shelat
further contended that a
person cannot seek compensation under Section 166 for
his
own fault. It was further contended that the Hon ble
Division Bench in a case of United
India Ins. Co. vs.
Jagatsinh Valsinh reported 1986 (2) GLR 1423 has lucidly
discussed
such issue in great detail. It has been observed
that if the claimant is held to be a tort-
feasor then it is
beyond comprehension as to how a tort-feasor can be
awarded
compensation for tortious act committed by
him. It has been further observed that if
the claimant
was negligent, he cannot come forward and say, pay
me compensation
for my own negligence . It has been
further observed that the insurance policy taken
out by
owner of vehicle is a contract of indemnity and liability of
Insurance Company if
any is to indemnify the owner of
vehicle to the extent he is made liable to pay damages
or
compensation. It was further contented that therefore
unless the owner is made
liable, the insurance company
cannot be held liable. Mr. Shelat also contended that
thus, a driver when found to be solely negligent for
causing accident cannot maintain a
claim against his
employer owner of vehicle under Section 166 of MV Act
which is
based upon principle of Tort - Fault liability
principle.

6.4. Mr. Shelat further contended that as per submission of

claimants, owner of said
ambulance has paid additional
premium as per Indian Motor Tariff, IMT-19 covering
legal
liability to paid driver then insurance company would be
per se liable to pay
compensation under Section 166 of
MV Act. It was contended by Mr. Shelat that such
submission is fallacious as IMT-19 does not cover risk of
driver but it covers legal
liability of owner of vehicle
(insured) qua paid driver arises under different Acts. It
was
further contended that there is a difference between
covering someone s risk vis-a-vis
someone s liability
under motor vehicle policy. It was further contended that
to
appreciate submission of insurer, Hon ble court needs
to interpret terms of policy (IMT-
19). The relevant part of
such condition (IMT 19 now IMT-28) reads as under:

In consideration of payment of an additional

premium, it is hereby understood and
agreed
that notwithstanding anything contained herein
to the contrary, the company
shall indemnify the
insured against his legal liability, under the
workman compensation
1923 and subsequent of
amendment of the act prior to the date of this
endorsement,
the Fatal Accident Act, 1885 or at
common law in respect of personal injury to paid
 driver while engaged in service of the insured in
such occupation in connection with
motor
vehicle .

Mr. Shelat further contended that reading of IMT-19

makes it very much clear that insurance
company will
indemnify the insured against his legal liability arising
under the said Acts for
the personal injury caused to his
paid driver. It was contended that if no legal liability of
insured arises under the said Acts, then insurance
company cannot be held liable to pay
compensation
under IMT-19. It is now well settled and in view of said
judgments, owner of
vehicle cannot be held liable to pay
compensation for personal injury or death of his paid
driver due to sole negligence of paid driver (claimant or
deceased paid driver respectively) in
the claim petition
filed by driver-claimant or his legal heirs under Section
166 of MV Act. Mr.
Shelat also contended that thus, in
view of above stated principle of law, condition of IMT-19
and considering principle of indemnity viz-a-viz policy of
motor vehicle, when owner of the
vehicle cannot be held
liable to pay compensation to paid driver or his legal
heirs then
insurance company cannot be saddled with
liability.

6.5. Mr. Shelat further contended that claimants- appellants

have placed heavy reliance
upon decision of this Hon ble
Court in the case of Saberabibi Hisamia Umaravmia
(supra) followed in Maniben S Pandya vs. Shashikant P
Sharigalor reported in 2004 (3)
GLR 1878 by contending
that once an additional premium covering the risk of
driver is
paid then insurance company is liable to pay
compensation in a claim petition filled u/s
166 MV Act
irrespective of sole negligence of paid driver. It was
contended that in said
decisions neither earlier decision
in the case of Jagatsinh Valsinh (supra) was brought
to
the notice/referred nor IMT-16 (now IMT19) which was
referred in said decisions
was interpreted in context of
contractual liability of insurance company. It was further
contended that as per said decision, IMT-16 covers risk of
driver under policy and
based on such premise, it holds
that insurance company is liable to pay compensation
to
legal heirs of deceased driver irrespective of his (driver s)
negligence. Mr. Shelat also
contended that the said
decision has neither taken into account insurance cover
given
under IMT-16 nor interpreted its terms resulted into
such finding which is contrary to
principles of indemnity.
It is reiterated that under IMT-16 or 19 or 28 legal liability
of
insured is covered which may arise under different
Acts in respect of personal injury
caused to insured s paid
driver. It was further contended that insurer by getting
an
additional premium does not per se cover risk of paid
driver but it covers legal liability
of insured that arise
under Act qua paid driver. The principle of indemnity
which is sine
qua non in a motor insurance policy is lost
sight in said decisions resulting into fixing
the liability of
insurance company without holding owner liable to pay
compensation
which is contrary to settled legal position
of law. Thus, decisions which are pressed
into service by
claimants are not laying down correct law and contrary to
basic
principle of indemnity of Motor Insurance Policy as
well as overlooking and not
properly appreciating terms
of contract of insurance.

6.6. Mr. Shelat further contended that it is settled law that

contract of insurance is like
any other ordinary contract
and its terms are binding to parties to the contract. It was
contended that the Court cannot add, alter, modify or
change its terms of the contract
and requires to interpret
terms of insurance contract as it is understood between
the
parties as per its terms. Relying upon the judgments
in the case of General Assurance
Society Ltd vs.
Chandumull Jain reported in AIR 1966 SC 1644 and in the
case of
United India Insurance Company Ltd. V/s
Harchand Rai Chandan Lal reported in 2004
(8) SCC 644,
Mr. Shelat contended that it is not for Court to make a
new contract,
however reasonable, if the parties have not
made it themselves. The clause of IMT-19
which is
replaced by IMT-28 w.e.f. 30-06-2002 is unambiguous
and clear. It was further
contended that there is no
ambiguity in IMT which is sought to be canvassed by
learned counsel for the claimant. Mr. Shelat further
contended that it is engrafted and
based upon principle
of indemnity unlike a personal accident policy than in
absence of
any liability of insured (owner of vehicle) arise
in a claim petition filed under Section
166 of MV Act
where driver himself is found negligent then insurance
company can not
be saddled with liability to pay
compensation as per IMT-16/IMT-19/IMT-28.

6.7. Mr. Shelat also contended that unless court finds insured
liable to pay
compensation to his paid driver under
Section 166 claim petition where no fault can be
found
out of paid driver than insurer would be liable to
indemnify its insured as per IMT-
16 or IMT-19 or IMT-28
as case may be otherwise not. It was further contended
that the
Apex Court in a case of National Insurance Co.
Ltd. V/s Prembai Patel & Ors. Reported
in AIR 2005 SC
2337 : 2005 (6) SCC 172 found owner of vehicle solely
negligent and
not paid driver who was victim of accident
awarded compensation to be paid by insurer
as per
terms of policy & owner of vehicle respectively.

6.8. Mr. Shelat further contended that additional premium

paid by insured as per IMT-
19 or IMT-28 is for own safety
and protection against his liability which may arise under
Workman Compensation Act, Fatal Accident Act or under
Common Law in connection
with an injury cause to driver
under his employment. There is no absolute insurance
cover given by charging an additional premium, thereby
irrespective of liability of
insured arise or not qua his paid
driver, insurance company would be liable to pay
compensation to insured s driver for his own negligence
as well. It was contended that
the insurance cover given
under said IMT is subject to certain condition which is
based
upon principle of indemnity unlike any Personal
Accident cover wherein on happening
of event and
sustained injuries resulted into permanent
disablement/loss of
limb/death then fixed amount will be
paid as per cover given under such additional PA
cover
given under policy (IMT-6 in Tariff dated 01-08-1989 &
IMT-17 in Tariff w.e.f. 30-
06-2002).

6.9. Mr. Shelat contended that there is fallacy on part of

claimant to contend that once
an additional premium is
paid to cover risk of paid driver under IMT-19 then as per
Section 147 (5) of the Act, irrespective of driver s own
negligence, insurer is required to
pay compensation
under Section 166 of the Act. It was contended by Mr.
Shelat that
Section 147 (5) of the Act does not override
provisions contained in Act itself but Non-
Obstante
Clause of sub-section (5) of Section 147 only overrides
other law than MV
Act. The said provision does not
whisper about no negligence to be seen when claim
filed
under Section 166 of the Act, otherwise irrespective of
status of claimant or victim
including Third Party whose
risk covered under Section 147 (1) (b) of the Act, no one
is
required to prove negligence to get compensation. It
was contended that this is not the
intention of Parliament
to bring Section 147 (5) under the Act and submission of
claimant is just contrary to principles enunciated by
Hon ble Apex Court in said
decisions in relation to claim
petition filed under Section 166 of the Act. Mr. Shelat
contended that upon conjoint reading of Section 147 (1)
(b) & (5) of the Act makes it
very clear that insurer is
required to indemnify person or classes of persons
specified
in policy in respect of any liability which policy
purports to cover. Thus, Section 147
(5S) of the Act also
speaks about indemnity of insured person or classes of
person
given under policy subject to any liability of
person or classes of persons arises. Mr.
Shelat contended
that in absence of such liability arising of such persons
or classes of
person under the Act to pay compensation
then insurer can not be held liable to pay
compensation.
 6.10. Mr. Shelat contended that on comparison of Section 147
(5) & Section 163-A of
the Act which is produced herein
below, clearly supports submission of appellant in
relation to not giving overriding effect of other provisions
of the Act as tried to
canvassed by claimant.

Section 147 (5) - Notwithstanding anything

contained in an law or the time being in
force, an
insurer issuing a policy of insurance under this
section shall be liable to
indemnify the person or
classes of persons specified in the policy in respect
of any
liability which the policy purports to cover in
the case of that person or those classes of
persons.
Section 163-A Special provisions as to payment
of compensation on
structured formula basis. ({1) Notwithstanding anything contained in this
Act or in an
other law or the time being in force or
instrument having the force of law, the owner of
the motor vehicle or the authorised insurer shall
be liable to pay in the case of death or
permanent
disablement due to accident arising out of the use
of motor vehicle,
compensation, as indicated in
the Second Schedule, to the legal heirs or the
victim, as
the case may be.

Mr. Shelat further contended that thus, Section 147 (5) of

the Act does not even override
requirement of Section
166 of the Act i.e. proof of negligence which is sine qua
non to get
compensation from driver/owner/insurer as
case may be.

6.11. Mr. Shelat further contended that claimant is again

wrong in contending that
word indemnity in plain English
means to pay. The word indemnity is defined under
Black
Law Dictionary, which means To promise to reimburse
another for such loss / To
give another security against
such a loss. It was further contened that the word
indemnity itself suggests discharging someone s liability
arising under law qua third
party. Mr. Shelat contended
that thus, it is incorrect to contend that indemnity is
nothing but only a payment by selectively ignoring its
context and purport in respect of
Motor Insurance Policy.

6.12. Mr. Shelat further contended that keeping in mind

principle of indemnity and plain
reading of IMT-19 or IMT-
28 makes it very clear that when there is no liability of
insured
arising under a claim petition filed under Section
166 of the Act by his driver wherein
driver himself is
found solely negligent for causing accidental injury or
death then
insurance company cannot be saddled with
liability to pay compensation merely
because an
additional premium has been paid by insured. Mr. Shelat
contended that
reference be answered accordingly.

6.13.Mr. Shelat, learned counsel for the Insurance Company

has relied upon the
following decisions.

1. Oriental Insurance Company Limited vs Meena Variyal &

ors reported in (2007) 5
SCC 428.

2. Oriental Insurance Company Limited vs. Jhuma Saha &

Ors reported in AIR 2007 SC
1054.

3. Tamilnadu State Transport Corporation vs. Natrajan & Ors

reported in (2003) 6 SCC
137.

4. United India Insurance Company vs. Jagatsinh Valsinh

reported in 1986(2) GLR
1423.
 5. National Insurance Company Ltd vs. R Mohan & R. Murthy
reported in 1995(II) ACC
484 (Madras).

6. Gulamrasul Rehman Malek vs. GSRTC reported in 2014(II)

ACC 95.

7. United Indian Insurance Company Limited vs. Mukeshbhai

Bhikhabhai Prajapati &
Ors rendered in First Appeal No.
2208 of 2007.

8. United India Insurance Company Limited vs. M/s.

Harchand Rai Chandan Lal
reported in (2004) 8 SCC 644.

7 Mr. Vibhuti Nanavati and Dr. Rushang Mehta, learned

counsels for the insurance
Companies and Mr. Yogi
Gadhiya, learned counsel appearing for the Kandla Dock
Labour
Board have also adopted the arguments made by
Mr.Shelat, learned counsel for the
Insurance Company.

8 No other and further submissions, contentions and

grounds have been raised by the
learned counsel for the
respective parties.

9 Before reverting to the submissions made by the learned

counsel for the respective
parties, it would be
appropriate to refer to Sections 147 and 149 of the Act,
which reads as
under:

147. Requirement of policies and limits of

liability

(1) In order to comply with the requirements of this

Chapter, a policy of insurance must
be a policy which-

(a) is issued by a person who is an authorised insurer;

and

(b) insures the person or classes of persons specified in

the policy to the extent
specified in sub-section (2)-

(i) against any liability which may be incurred by him in

respect of the death of or bodily
injury to any person
including owner of the goods or his authorised
representative
carried in the motor vehicle or damage
to any property of a third party caused by or
arising out
of the use of the motor vehicle in a public place

(ii) against the death of or bodily injury to any

passenger of a transport vehicle, except
gratuitous
passengers of a goods vehicle, caused by or arising out
of the use of the
motor vehicle in a public place.
Explanation.-For the removal of doubts, it is hereby
clarified that the death of or bodily injury to any person
or damage to any property of a
third party shall be
deemed to have been caused by or to have arisen out
of, the use of
a vehicle in a public place,
notwithstanding that the person who is dead or injured
or
the property which is damaged was not in a public
place at the time of the accident, if
the act or omission
which led to the accident occurred in a public place.

(2) Notwithstanding anything contained under any

other law for the time being in force,
for the purposes
of third party insurance related to either death of a
person or grievous
hurt to a person, the Central
Government shall prescribe a base premium and the
liability of an insurer in relation to such premium for an
insurance policy under sub-
section (1) in consultation
with the Insurance Regulatory and Development
Authority.

(3) A policy shall be of no effect for the purposes of this

Chapter unless and until there
is issued by the insurer
in favour of the person by whom the policy is effected,
a
 certificate of insurance in the prescribed form and
containing the prescribed
particulars of any condition
subject to which the policy is issued and of any other
prescribed matters; and different forms, particulars and
matters may be prescribed in
different cases.

(4) Notwithstanding anything contained in this Act, a

policy of Insurance issued before
the commencement
of the Motor Vehicles (Amendment) Act, 2019 shall be
continued
on the existing terms under the contract and
the provisions of this Act shall apply as if
this Act had
not been amended by the said Act.

(5) Where a cover note issued by the insurer under the

provisions of this Chapter or the
rules or regulations
made thereunder is not followed by a policy of
insurance within the
specified time, the insurer shall,
within seven days of the expiry of the period of the
validity of the cover note, notify the fact to the
registering authority or to such other
authority as the
State Government may prescribe.

(6) Notwithstanding anything contained in any other law

for the time being in force, an
insurer issuing a policy of
insurance under this section shall be liable to indemnify
the
person or classes of persons specified in the policy
in respect of any liability which the
policy purports to
cover in the case of that person or those classes of
persons.

Section 149 Settlement by insurance company

and procedure therefor

149. (1) The insurance company shall, upon receiving

information of the accident,
either from claimant or
through accident information report or otherwise,
designate an
officer to settle the claims relating to such
accident.

(2) An officer designated by the insurance company for

processing the settlement of
claim of compensation
may make an offer to the claimant for settlement
before the
Claims Tribunal giving such details, within
thirty days and after following such
procedure as may
be prescribed by the Central Government.

(3) If, the claimant to whom the offer is made

under sub-section (2),-

(a) accepts such offer-

(i) the Claims Tribunal shall make a record of such

settlement, and such claim shall be
deemed to be
settled by consent; and

(ii) the payment shall be made by the insurance

company within a maximum period of
thirty days from
the date of receipt of such record of settlement;

(b) rejects such offer, a date of hearing shall be fixed by

the Claims Tribunal to
adjudicate such claim on merits.

10 Chapter XI of the Act covers the subject Insurance of

Motor Vehicles Against Third Party
Risks under section
146(1) of which no person shall use a motor vehicle in
public unless
there is a valid policy of insurance which
complies with the requirements of the chapter.
Section
147 provides for mandatory requirements of such
insurance policy. It deserves to be
noted that as per the
provisions of Section 147 r/w 149 of the Act, the risks
which are
covered are statutorily provided, however,
parties may enter into a contract by which the
insurer
agrees to cover additional risks by charging / payment
of additional payment. It also
deserves to be noted that
the policy has a clause which defines the limits of
liability in
respect of death or bodily injury to any
person caused by or arising out of the use of the
motor
vehicle under section 11(i) of the terms and conditions
of the policy. In proviso (b) to
section II (1), which reads
as under:

"Except so far as is necessary to meet the

requirements of the Motor Vehicles Act, the
company shall not be liable in respect of death
of or bodily injury to any person in the
employment of the insured arising out of and in
the course of such employment"

Thus, the insurance policy would cover only the person

or classes of persons specified in the
policy. Thus, when
the Insurance Company accepts the additional premium
for legal liability
to paid Driver and / or Conductor and /
or Cleaner, employed in connection with the
operation
of the insured vehicle, by accepting additional premium
as per IMT 28, the
Insurance Company shall entail
liability of indemnifying and legal liability is created
towards
paid Driver and / or Conductor and/ or Cleaner.
In case when such additional premium is
paid, the
policy includes following clause:

In consideration of an additional premium of

notwithstanding anything to the contrary
contained in the policy it is hereby understood and
agreed that the insurer shall
indemnify the insured
against the insured s legal liability under the
Employees
Compensation Act 1923 the Fatal
Accidents Act, 1855 or at Common Law and
subsequent amendments of these Acts prior to the
date of this Endorsement in respect
of personal
injury to any paid driver and/or conductor and/or
cleaner whilst engaged in
the service of the
insured in such occupation in connection with the
vehicle insured
herein and will in addition be
responsible for all costs and expenses incurred
with its
written consent.

The aforesaid clause therefore, clearly prescribes that

it covers the insured against the
insured s legal liability
under the Employee s Compensation Act, 1923, the
Fatal Accidents
Act, 1855 or at Common Law. It may be
noted that statutory policy would cover liability
under
the Employee s Compensation Act, 1923 as far as
Driver is concerned. By accepting
additional premium
as per the IMT 28, the same added liability under
Common Law and
Fatal Accidents Act. Motor accidents
liability predates the imposition of this liability under
any form of statute and such liability would be part of
Common Law till the time it was made
a statutory
liability.

11 At this juncture, it would be appropriate to refer to

judgment of the Hon ble Supreme
Court in the case of
Prembai Patel (supra) wherein the Hon ble Supreme
Court has observed
thus:

12. The heading of Chapter XI of the Act is

Insurance of Motor Vehicles Against Third
Party
Risks and it contains Sec. 145 to 164. Section
146(1) of the Act provides that no
person shall use,
except as a passenger, or cause or allow any other
person to use, a
motor vehicle in a public place,
unless there is in force in relation to the use of the
vehicle by that person or that other person, as the
case may be, a policy of insurance
complying with
the requirements of Chapter XI. Cl. (b) of sub-Sec.
(1) of Sec. 147
provides that a policy of insurance
must be a policy which insures the person or
classes
of persons specified in the policy to the extent
specified in sub-sec. (2) against
any liability which
may be incurred by him in respect of death of or
bodily injury to any
person or passenger or damage
to any property of a third party caused by or arising
out of the use of the vehicle in public place. SubCl.
(i) and (ii) of Cl. (b) are
comprehensive in the sense
that they cover both any person' or 'passenger . An
employee of owner of the vehicle like a driver or a
conductor may also come within the
purview of the
words any person' occurring in sub-Cl. (i). However,
the proviso (i) to Cl.
(b) of sub-Sec. (1) of Sec. 147
says that a policy shall not be required to cover
liability
in respect of death, arising out of and in the
course of his employment, of the employee
of a
person insured by the policy or in respect of bodily
injury sustained by such an
employee arising out of
and in the course of his employment other than a
liability
arising under the Workmen's Act if the
employee is such as described in sub-Cl. (a) or
(b)
or (c). The effect of this proviso is that if an
insurance policy covers the liability
under the
Workmen's Act in respect of death of or bodily injury
to any such employee
as is described in sub-Cl. (a)
or (b) or (c) of proviso (i) to Sec. 147(1)(b), it will be
a valid
policy and would comply with the
requirements of Chapter XI of the Act. Section 149
of
the Act imposes a duty upon the insurer
(insurance company) to satisfy judgments and
awards against persons insured in respect of third
party risks. The expression - "such
liability as 1s
required to be covered by a policy under Cl. (b) of
sub-Sec. (1) of Sec. 147
(being a liability covered by
the terms of the policy)" - occurring in sub-sec. (1)
of Sec.
149 is important. It clearly shows that any
such liability, which is mandatorily required
to be
covered by a policy under Cl. (b) of Sec. 147(1), has
to be satisfied by the
insurance company. The effect
of this provision is that an insurance policy, which
covers only the liability arising under the Workmen's
Act in respect of death of or bodily
injury to any
such employee as described in sub-Cl. (a) or (b) or
(c) to proviso (i) to Sec.
147(1)(b) of the Act is
perfectly valid and permissible under the Act.
Therefore, where
any such policy has been taken by
the owner of the vehicle, the liability of the
insurance
company will be confined to that arising
under the Workmen's Act.

13. The insurance policy being in the nature of a

contract, it is permissible for an owner
to take such
a policy whereunder the entire liability in respect of
the death of or bodily
injury to any such employee
as is described in sub-Cl. (a) or (b) or (c) of proviso
(i) to
Sec. 147(1)(b) may be fastened upon the
insurance company and insurance company
may
become liable to satisfy the entire award. However,
for this purpose the owner
must take a policy of that
particular kind for which he may be required to pay
additional
premium and the policy must clearly
show that the liability of the insurance company in
case of death of or bodily injury to the aforesaid
kind of employees is not restricted to
that provided
under the Workmen's Act and is either more or
unlimited depending upon
the quantum of premium
paid and the terms of the policy.

14. The aforesaid interpretation of the relevant

provisions applicable to the case in
hand is in
consonance with the view expressed by a
Constitution Bench in New India
Assurance Co. Ltd.
V/s. CM. Jaya and others, 2002 2 SCC 278 where,
while interpreting
the provisions of Sec. 95(2) of
Motor Vehicles Act, 1939, the Court held as under: -
The
liability could be statutory or contractual. A
statutory liability cannot be more than what
is
required under the statute itself. However, there is
nothing in Sec. 95 of the Act
prohibiting the parties
from contracting to create unlimited or higher
liability to cover
wider risk. In such an event, the
insurer is bound by the terms of the contract as
specified in the policy in regard to unlimited or
higher liability as the case may be. In the
absence
of such a term or clause in the policy, pursuant to
the contract of insurance, a
limited statutory liability
cannot be expanded to make it unlimited or higher.
If it is so
done, it amounts to rewriting the statute or
the contract of insurance which is not
permissible."
The Bench also referred to earlier decisions
rendered in New India
Assurance Co. Ltd. V/s. Shanti
Bai, 1995 2 SCC 539 and Amrit Lal Sood V/s.
Kaushalya
Devi Thapar, 1998 3 SCC 744 and
observed that in case of an insurance policy not
taking any higher liability by accepting a higher
premium, the liability of the insurance
company is
neither unlimited nor higher than the statutory
liability fixed u/s. 95(2) of
the Motor Vehicles Act,
1939. It was further observed that it is open to the
insured to
make payment of additional higher
premium and get higher risk covered in respect of
third party also. But in the absence of any such
clause in the insurance policy, the
 liability of the 15.
Though the aforesaid decision has been rendered
on Sec. 95(2) of
the Motor Vehicles Act, 1939 but
the principle underlying therein will be fully
applicable
here also. It is thus clear that in case the
owner of the vehicle wants the liability of the
insurance company in respect of death of or bodily
injury to any such employee as is
described in Cl.
(a) or (b) or (c) of proviso (i) to Sec. 147(1)(b)
should not be restricted
to that under the
Workmen's Act but should be more or unlimited, he
must take such a
policy by making payment of extra
premium and the policy should also contain a
clause
to that effect. However, where the policy mentions
"a policy for Act Liability" or
"Act Liability", the
liability of the insurance company qua the
employees as aforesaid
would not be unlimited but
would be limited to that arising under the
Workmen's Act.

16. The High Court, in the impugned judgment, has

held that if the legal representatives
of the
deceased employee approach the Motor Accident
Claims Tribunal for payment
of compensation to
them by moving a petition u/s. 166 of the Act, the
liability of the
insurance company is not limited to
the extent provided under the Workmen's Act and
on its basis directed the appellant insurance
company to pay the entire amount of
compensation
to the claimants. As shown above, the insurance
policy taken by the
owner contained a clause that it
was a policy for "Act Liability" only. This being the
nature of policy the liability of the appellant would
be restricted to that arising under the
Workmen's
Act. The Judgement of the High Court, therefore,
needs to be modified
accordingly .

11.1. It would be appropriate to refer to the judgment of the

Hon ble Supreme Court in
the case of C.M. Jaya and Ors
(supra) wherein the Constitutional Bench of the Hon ble
Supreme Court while interpreting Section 95(2) of the Old
Act has held that the liability
of the insurer is limited as
indicated in Section 95 of the Act but it is open to the
insured to make payment of additional higher premium
and get higher risk covered in
respect of third party also.
Thus, if additional premium is paid by the owner of the
vehicle and additional premium is paid for paid Driver
and / or Conductor and / or
Cleaner, Insurance Company
by accepting such higher premium would cover higher
risks i.e. risk of paid Driver and / or Conductor and / or
Cleaner.

12 The Division Bench of this Court in the case of Saberabibi

Hisammiya Umarvmiya (supra)
has observed thus:

21. Then comes the question of liability of the United

India Insurance Co., so far as
truck driver is concerned.
It was submitted by the learned counsel for the
Insurance Co.
that the dependents of deceased truck
driver cannot get compensation from the
Insurance Co.
in view of the finding of the tribunal that the driver was
100% negligent. It
was submitted by Mr. Nanavati that
in view of the above finding recorded by the
tribunal
and affirmed by this Court, neither the owner nor the
Insurance Co. can be
directed to make payment of
compensation towards the claim of the death of
Riyajuddin. Mr. Nanavati submitted that recording of
finding of negligence is a sine qua
non for getting
compensation in any motor accident case. Heavy
reliance was placed
by Mr. Nanavati in this connection
on the decision of the Hon ble Supreme Court in the
case of Minu B. Mehta vs. Balkrishna Ramchandra
Nayan, reported in AIR 1977 SC
1248. In that case, the
Hon ble Supreme Court held that a person is not liable
unless he
contravenes any of the duties imposed on
him by common law or by a statute. In a
motor
accident, the owner is only liable for negligence. If there
was no negligence on
the part of the owner, the
Insurance Company cannot be held liable for the
payment of
compensation in a motor accident claim
case. Mr. Nanavati submitted that since the
driver
himself was negligent, he cannot claim any
compensation from the owner and
the Insurance Co.
can be held liable only if the owner is liable in law and,
hence, the
Insurance Co. must be exonerated.

22. Mr. Shah, on the other hand, submitted that in

the instant case, as per the policy
Exh. 282, additional
premium of Rs.16/- as per I.M.T. 16 has been paid
covering the risk
of driver and cleaner subject to I.M.T.
16. Mr. Shah, therefore, submitted that the claim
is
based on policy and since as per the terms and
conditions of the policy, a driver is
covered, the
Insurance Company is liable and the tribunal ought to
have held the
company liable

23. Looking to the provisions of Section 95 of the Act

and the policy, Exh. 288, it is clear
that the policy
covers the risk of driver and cleaner and additional
payment of Rs.16/-
was paid. In view of payment of
additional premium of Rs.16/-, the Insurance Co. is
liable as per the terms of policy and the ratio laid down
in Minu Mehta s case (supra)
cannot be attracted and
pressed in service by the Insurance Co. because of
payment of
additional premium, the Insurance
Company has extended the coverage for the risk of
driver and cleaner. In our opinion, therefore, the
Insurance Co. cannot be absolved from
liability by
contending that the claimants were not entitled to
compensation since there
was 100% negligence on the
part of the driver. The claimants are entitled to get
compensation from the Insurance Co. for the death of
driver on the ground that the
case is covered under the
terms of policy irrespective of negligence on his part.

24. Mr. Nanavati then submitted that in that case, the

provisions of Section 95 (1) of
the Act would apply, and
the claimants will be entitled to get compensation in
respect
of death or bodily injury arising out of and in
the course of employment as payable
under the
provisions of the Workmen s Compensation Act of
Harivadan Maneklal Modi
& Anr. Vs. Chandrasinh
Chhatrasinh Parmar & Ors., reported in 28 (2) GLR
1274, Mr.
Nanavati submitted that the compensation
can be claimed either under the Motor
Vehicles Act or
under the Workmen s Compensation Act, but not under
both. He
submitted that, in the instance case, since the
driver was 100% negligent, he could not
have claimed
compensation under the Motor Vehicles Act. At the
most, therefore, an
application could have been filed
under the Workmen s Compensation Act before the
Commissioner for Workmen s Compensation. Since it is
not done, the claim is liable to
be dismissed. In our
opinion, the contention has no merit. Reliance placed
on
Harivadan s case (Supra) is also ill-founded. What
the Division Bench in Harivadan s
case (Supra) held was
that a person cannot file a petition in both the forums,
namely,
by invoking provisions of the Motor Vehicles
Act as well as the Workmen s
Compensation Act. At the
sametime, however, if the driver could have made claim
under the Motor Vehicles Act and is otherwise entitled
to get compensation under that
Act, such application
cannot be rejected on the ground that the application
could have
been made before the Commissioner for
Workmen s Compensation. In our opinion,
when the
policy has covered the risk of driver, a petition under
the Motor Vehicles Act is
maintainable. Sub-Section (1)
of Section 95 merely provides the extent of liability. It
clearly lays down that if the case falls under Sub-
Section (1) of Section 95, the extent
of liability would be
to the extent to which it would arise under the
provisions of the
Workmen s Compensation Act. From
that it cannot be said that such a person will have
to
approach the Commissioner for Workmen s
Compensation and file an application
only before that
forum. Since the additional coverage is given in policy
Exh.282, the
liability of the Insurance Co. arises. In our
opinion, if the application is made before the
Commissioner for Workmen s Compensation as also
before the Motor Accident Claims
Tribunal, the person is
not entitled to get benefit from both the forums. In the
instant
case, no such application was filed before the
Commissioner for Workmen s
Compensation under the
Workmen s Compensation Act, and hence, the
claimants are
entitled to claim compensation under the
Motor Vehicles Act. In our view, the claim
petition
requires to be allowed and the Insurance Co. must be
held liable to pay
compensation to the claimants for the
death of driver Riyajuddin.

25. First Appeal Nos. 1013 of 1984 and 1383 of 1994

are also required to be allowed.
Admittedly, the
deceased were traveling in the truck. True it is that the
accident took
place because of the sole negligence on
the part of the truck driver. The tribunal for
that reason,
relying upon the decision of the Full bench in Nathiben s
case (supra) held
that all the conditions laid down by
the Full Bench having been satisfied by the
Insurance
Co., the Insurance Co. could successfully disclaim the
liability to pay
compensation to the claimants. But Mr.
Shah drew our attention to a recent decision of
the Full
bench in the case of New India Assurance Co. vs.
Kamlaben widow of
Sumantrai, and others, reported in
34(1) GLR 779, wherein after considering a number
of
decisions including the decision in Nathiben s case
(supra) laid down that in order to
successfully disclaim
the liability, the Insurance Co. has to satisfy the
following
conditions:

(I) that on the date of the contract of insurance, the

insured vehicle was expressly or
implicitly not covered
by a permit to carry any passenger for hire or reward,

(ii) that there was a specified condition in the policy

which excluded the use of the
insured vehicle for the
carriage of any passenger for hire or reward,

(iii) that the vehicle was, in fact, used in breach of such

specified condition on the
occasion giving rise to the
claim by reason of the carriage of the passenger therein
for
hire or reward, and

(iv) that the vehicle was used by the insured or at his

instance in breach of specific
conditions including a
condition that in the goods vehicle passengers for hire
or reward
were not to be carried. If it is done without
knowledge of the insured by the driver s
acts or
omission, the insurer would be liable to indemnify the
insured.

The said observation is the basis of this Reference. The

provisions of the Act
prescribes statutory liability as
provided under Sections 147 and 149 of the Act. The
same stands modified to the extent of Common Law
Liability by adding certain
beneficial features for
claimants. Under Common Law, a person could recover
compensation only in case of proof of negligence on the
part of the alleged tortfeasor.
The Act under Section 140
and 163-A provides for No Fault Liability and no such
equivalent provision is found in Common Law. Thus,
under the Act certain burdens are
imposed on the insurer
which would not be there if the liability had been
determined
under Common Law. Section 149 of the Act
also postulates that the insurer to first pay
to the third
party and then only recover from the owner of the
vehicle in case of a
breach of the policy. However, such
principle would not be applicable if the liability had
been
determined under Common Law. Thus, when the owner
of a vehicle pays
additional premium to cover the Legal
Liability of the paid Driver, the legal heirs of
Driver have
option either to file Claim application under the
Employees Compensation
Act, 1923 which no fault
liability or under the Act as provided under Section 167 of
the
Act. Thus, the Act provides that option is left to the
person entitled to compensation to
choose a particular
remedy. In the case of Prembai Patel (supra), the Hon ble
Supreme
Court has clearly held that when the Policy is
Act Only and additional premium for
Legal Liability for
paid Driver and Conductor is not paid then the
appropriate remedy
would be under the Employees
Compensation Act for Compensation. However, when
 additional premium for legal liability of the paid Driver or
Conductor is paid by the
Owner, the insurance company
on accepting additional liability for payment of
compensation for such class of person, a claim petition
under the Act would be
available and the claimants have
right to chose appropriate forum as per Section 167
of
the Act.

13 Thus, when the owner of a vehicle pay additional

premium and same is accepted by the
Insurance
Company, liability of the Insurance Company gets
extended under the Motor
Vehicles Act. Section 147 of
the Act clearly prescribes for statutory liability to cover
risk of
paid Driver and Conductor under the Insurance
Policy, which is a matter of contract. On
payment of such
additional premium by the owner, the liability of the
owner shifts upon the
Insurance Company. Thus, the risk
of paid Driver and Conductor would be covered under the
Insurance Policy. Only when the additional premium is
not paid, liability would be as per the
Employees
Compensation Act, 1923 and in such cases,
compensation would be computed
as prescribed under
the Act which is limited to the extent provided under
provisions of the
Act. However, when owner pays
additional premium to cover the legal liability of his paid
driver and conductor to the Insurance Company, as such,
the Insurance Company is
enlarging the scope for
unlimited liability for payment of compensation, when
additional
premium is accepted. The liability of the
Insurance Company gets extended and it has no
right to
raise issue of self negligence or otherwise of the such
class of the driver of the
Insured vehicle. By accepting
additional premium as per the IMT 28, the Insurance
Company
expressed its willingness to extend its liability
under the Clause of Legal Liability to the Paid
driver and
conductor as envisaged under Section 147 of the Act.
Thus, in our opinion,
Insurance Company has no legal
right to avoid its legal liability under the indemnity clause
arising from the contract of insurance towards the
insured owner of such classes of
vehicles.

14 The judgments relied upon by the learned counsel for the

Insurance Company would not
be applicable in the
instant case and therefore, it is not necessary to be dealt
with. The other
judgments which are cited by the learned
counsels for the respective parties, deal with
different
facts & situations and are not relevant to the question
referred to this Bench and
hence they are not dealt with
individually.

15 In our opinion, by accepting additional premium, the

Insurance Company indemnifies the
owners for paid
Driver and / or Conductor and risk of Driver / Conductor is
covered under it.
Upon death or injury caused to the paid
Driver and / or Conductor, the Insurance Company
would
be liable to satisfy such claim irrespective of the self
negligence. Thus, the
observations made by the Division
Bench in the case of Saberabibi Hisammiya Umarvmiya
&
Anr (supra) lays down the correct law. Reference is
thus, answered accordingly.

The respective appeals be placed before the

Division Bench taking up such appeals for
its final
disposal in view of the observations made by us.
 24

2019 (0) AIJEL-SC 64619

SUPREME COURT OF INDIA

(DELHI HIGH COURT)

Hon'ble Judges:Indu Malhotra and Sanjiv Khanna JJ.

Sunita Tokas Versus New India Insurance Co.Ltd.

CIVIL APPEAL No. 6339 of 2019 ; *J.Date :- AUGUST 16, 2019

MOTOR VEHICLES ACT, 1988 Section - 166 , 168 , 173

(a) Motor Vehicles Act, 1988 - S. 166 - motor accident claim - death of bachelor - determination of multiplier -
amount of compensation is to be paid to claimants who are dependents in the event of death of a person, based
on what deceased would have contributed to their support - amount received by dependants, becomes a part of
estate, as they may live longer, or may be younger than the age limits taken into account for calculation of
multiplier to be applied - in case of death of a married person, it is an accepted norm that age of deceased would
be taken into account - even in case of a bachelor, same principle must be applied - once law is settled, it should
not repeatedly be changed, since certainty of law is of crucial importance, to avoid any confusion - in present
case, since deceased was 21 years old, multiplier of 18 was applicable. (Para 4)

(b) Motor Vehicles Act, 1988 - S. 166, 168, 173 - motor accident claim - compensation - death of son of appellant
who was a trained swimmer aged 21 years and was a bachelor - deceased had won several State level
competitions - Tribunal awarded Rs. 14,87,140/- along with interest @ 7% per annum - appeal for enhancement
of compensation - held, while applying multiplier, age of deceased is required to be considered and not the age
of dependents - deceased certainly had potential to earn a living by utilizing his skills - compensation awarded
loss of income after adding 40% towards future prospects and deducting 50% towards personal expenses Rs.
8,400/- - multiplier of 18 applied - loss of future income Rs. 18,14,400/- awarded - compensation towards loss of
love and affection Rs. 2 lacs awarded - total compensation enhanced from Rs. 9,25,000 to Rs. 20,64,400 - appeal
allowed. (Para 4,5,6)

Imp.Para: [ 4 ] [ 5 ] [ 6 ]

Cases Relied on :

1. Amrit Bhanu Shali & Ors. V. National Insurance Co. Ltd. & Ors., 2012 11 SCC 738 : 2012 (6) Scale 1 : JT
2012 (6) 301 : 2012 (5) SCR 207 : 2012 AIR SCW 3901
2. Munna Lal Jain & Ors. V. Vipin Kumar Sharma & Ors., 2015 6 SCC 347 : 2015 AIR SC(Supp) 1130 : 2015 (6)
Scale 522 : JT 2015 (5) 1 : 2015 AIR SCW 3105
3. National Insurance Company Limited V. Pranay Sethi & Ors., 2017 16 SCC 680 : 2017 AIR SC 5157 : 2017
(13) Scale 12 : JT 2017 (10) 450 : 2017 (8) Supreme 107
4. New India Assurance Co. Ltd. V. Shanti Pathak & Ors., 2007 10 SCC 1 : 2007 AIR SC 2649 : 2007 (9) Scale
216 : JT 2007 (9) 318 : 2007 (8) SCR 237
5. Reshma Kumari & Ors. V. Madan Mohan & Ors., 2013 9 SCC 65 : 2013 AIR SC(Supp) 474 : 2013 (5) Scale
160 : JT 2013 (4) 362 : 2013 (2) SCR 706
. Royal Sundaram Alliance Insurance Co. Ltd. V. Mandala Yadagari Goud & Ors., 2019 5 SCC 554 : 2019 AIR
SC 1825 : 2019 (6) Scale 82 : JT 2019 (4) 547 : 2019 (4) Supreme 254
7. Sarla Verma & Ors. V. Delhi Transport Corporation & Anr., 2009 6 SCC 121 : 2009 AIR SC 3104 : 2009 (6)
Scale 129 : JT 2009 (6) 495 : 2009 (5) SCR 1098
. Sube Singh & Ors. V. Shyam Singh (Dead) & Ors., 2018 3 SCC 18 : 2018 AIR SC 1195 : 2018 (2) Scale 385 :
JT 2018 (2) 204 : 2018 (3) Supreme 453

Equivalent Citation(s):
2019 (20) SCC 688 : AIR 2019 SC 3921
JUDGMENT :-

INDU MALHOTRA, J.

1 Leave granted.

The present Civil Appeal has been filed to challenge the final
Judgment and Order dated 01.08.2017
passed by the High
Court of Delhi in MAC. APP. No. 323 of 2017.

The Appellants herein have filed the present Civil Appeal

for enhancement of the compensation granted by
the Motor
Accident Claims Tribunal, Patiala House Courts, New Delhi
( MACT ) and the High Court.

2 The factual matrix in which the present Civil Appeal arises is

briefly stated as under :

2.1. The son of the Appellants viz. Pradeep Tokas was a

student who was a trained swimmer, and had won
prizes in State-level events.

2.2. On 11.05.2004, Pradeep Tokas was sitting on a two-wheeler as a pillion rider, while travelling on the
Upper Ridge Road towards Karol Bagh, New Delhi.

At 1:05 a.m., the said two-wheeler met with an

accident with a stationary Truck bearing Registration
No.
HR-51-GA-0525, which was not visible at night.
The truck was standing in the middle of the road
without
any indicator lights on. The two-wheeler
dashed against the stationary truck, and both Pradeep
Tokas and
the driver died on the spot. Pradeep Tokas
was 21 years old at the time of his death.

2.3. The Appellants herein are the parents of the deceased,

who filed the Claim Petition before the MACT,
Patiala
House Courts, New Delhi claiming compensation on
the death of their son.

2.4. The MACT vide Award dated 25.05.2009 granted

compensation of Rs. 14,87,140/- along with interest
@7% p.a. to the Appellant -Claimants.
The compensation was awarded under the following
heads :

(i) The notional income of the deceased was assessed

@Rs. 16,246/- p.m. after adding Future Prospects
@50%;

(ii) Deduction of 50% towards personal expenses was

made from the notional income of the deceased,
since he was a bachelor;

(iii) The MACT applied the Multiplier of 15 on the

basis of the age of the mother of the deceased;

(iv) Rs. 25,000/- was awarded towards loss of love

and affection;

(v) Rs. 10,000/- was awarded towards loss of estate

and consortium;

(vi) Rs. 5,000/- was awarded towards funeral

expenses.

2.5. Aggrieved by the aforesaid Award, the Appellants filed

MAC. APP. 323 of 2017 before the Delhi High
Court for
enhancement of compensation.

The Respondent Insurance Company also filed a

cross-Appeal for reduction of compensation.

The High Court vide the impugned common

Judgment and Order dated 01.08.2017 dismissed the
Appeal
filed by the Appellant Claimants, and allowed
the Appeal filed by the Respondent Insurance
Company in
part.

The High Court reduced the amount of compensation

awarded by the MACT to Rs. 9,25,000/-. The High
Court awarded the following amounts under various
heads :

(i) The notional income of the deceased was assessed

@Rs. 7,500/- p.m.;

(ii) Deduction of 50% was made from the notional

income of the deceased towards personal
expenses,
since the deceased was a bachelor;

(iii) Multiplier of 15 was applied on the basis of the

age of the mother of the deceased;

(iv) Rs. 2,00,000/- was awarded towards loss of love

and affection;

(v) Rs. 50,000/- was awarded towards loss of estate

and funeral expenses.
3 Aggrieved by the aforesaid Judgment, the Appellant Claimants have filed the present Civil Appeal for
enhancement of the compensation awarded.

We have heard the learned Counsel for the Appellants and

the Respondent Insurance Company.

3.1. The Counsel for the Appellants inter alia submitted

that the MACT and the High Court had erroneously
applied the wrong Multiplier of 15, on the basis of the
age of the mother of the deceased.

It was submitted that the Multiplier of 18 ought to

have been applied on the basis of the age of the
deceased, as per the table set out in the judgment of
this Court in Sarla Verma & Ors. v. Delhi Transport
Corporation & Anr., 2009 6 SCC 121

3.2. It was further submitted that the High Court erred in

fixing the notional income of the deceased
@7,500/-
p.m., and did not award Future Prospects.

3.3. On the other hand, the Counsel for the Insurance

Company inter alia submitted that the Courts below
were justified in applying the Multiplier of 15 as per
the age of the mother of the deceased, and not the age
of the deceased who was a bachelor. Reliance was
placed on the decision in New India Assurance Co. Ltd.
v. Shanti Pathak & Ors., 2007 10 SCC 1

4 We have perused the judgments of the Courts below, and

find that the Multiplier has been fixed on the basis of
the age
of the mother of the deceased boy.

The issue with respect to whether the Multiplier to be

applied in the case of a bachelor, should be
computed on the
basis of the age of the deceased, or the age of the mother, is
no longer res integra. There
are a catena of judgments
rendered by this Court, wherein it has been held that the
Multiplier has to be
applied on the basis on the age of the
deceased, and not on the basis of the age of the dependants.

4.1. In Sarla Verma (supra), this Court held that :

19. Having regard to the age of the deceased

and period of active career, the appropriate
multiplier should
be selected. This does not
mean ascertaining the number of years he
would have lived or worked but for
the accident.
Having regard to several imponderables in life
and economic factors, a table of multipliers
with
reference to the age has been identified by this
Court. The multiplier should be chosen from the
said
table with reference to the age of the
deceased. (emphasis supplied)

4.2. In Reshma Kumari & Ors. v. Madan Mohan & Ors., 2013 9 SCC 65.
a three judge bench of this Court
held that :

36. In Sarla Verma, this Court has endeavoured

to simplify the otherwise complex exercise of
assessment
of loss of dependancy and
determination of compensation in a claim made
under Section 166. It has been
rightly stated in
Sarla Verma 2009 (6) SCC 121 that claimants in
case of death claim for the purposes of
compensation must establish (a) age of the
deceased; (b) income of the deceased; and (c) the
number of
dependants. To arrive at the loss of
dependency, the Tribunal must consider (i)
additions/deductions to be
made for arriving at
the income; (ii) the deductions to be made
towards the personal living expenses of the
deceased; and (iii) the multiplier to be applied
with reference to the age of the deceased. We do
not think it
is necessary for us to revisit the law
on the point as we are in full agreement with the
view in Sarla Verma
2009 (6) SCC 121. (emphasis supplied)

4.3. In Amrit Bhanu Shali & Ors. v. National Insurance Co.

Ltd. & Ors., 2012 11 SCC 738 this Court held that
the selection of
multiplier is based on the age of the deceased, and not
on the basis of the age of the
dependants. There may
be a number of dependants of the deceased, whose
ages would vary. Therefore,
the age of the dependants
would have no nexus with the computation of
compensation.

4.4. Another three judge bench of this Court in Munna Lal

Jain & Ors. v. Vipin Kumar Sharma & Ors., 2015 6
SCC 347 discussed
the issue as to whether the multiplier should depend
on the age of the dependants, or
that of the deceased.
This Court held that the issue had been decided in
Reshma Kumari (supra), wherein it
was held that the
multiplier to be used, must be with reference to the age
of the deceased. The Court cited
para 36 of the
judgment in Reshma Kumari (supra), and held that :

11. The remaining question is only on multiplier.

The High Court following Santosh Devi (supra),
has taken
13 as the multiplier. Whether the
multiplier should depend on the age of the
dependants or that of the
deceased, has been
hanging fire for sometime; but that has been
given a quietus by another three-Judge
Bench
decision in Reshma Kumari (supra). It was held
that the multiplier is to be used with reference to
the
age of the deceased. One reason appears to
be that there is certainty with regard to the age
of the
 deceased but as far as that of dependants
is concerned, there will always be room for
dispute as to
whether the age of the eldest or
youngest or even the average, etc., is to be
taken. (emphasis supplied)

4.5. The decision in Munna Lal Jain (supra) was followed by

another three judge bench of this Court in
Sube Singh
& Ors. v. Shyam Singh (dead) & Ors., 2018 3 SCC 18.

4.6. The Constitution Bench in National Insurance

Company Limited v. Pranay Sethi & Ors., 2017 16 SCC
680.
affirmed the view taken in Sarla Verma (supra) and Reshma Kumari
(supra), and recorded in the
conclusions as under :

59.7. The age of the deceased should be the

basis for applying the multiplier.

4.7. Recently the legal issue whether in case of a motor

accident of a bachelor, the age of the deceased, or
the
age of the dependants, would be taken into account,
for calculating the multiplier, came up for
consideration before a three judge bench of this Court
in Royal Sundaram Alliance Insurance Co. Ltd. v.
Mandala Yadagari Goud & Ors., 2019 5 SCC 554.

The Court referred to the earlier three judge bench

decision rendered in Munna Lal Jain (supra), which in
turn relied upon the judgment in Sarla Verma (supra),
which has been affirmed by the Constitution Bench in
Pranay Sethi (supra). The Court also referred to the
three judge bench decision in Sube Singh (supra).

The Court after perusing all earlier judgments,

observed that the judicial pronouncements had devised
a
standard formula for calculation of the compensation
qua various components. The amount of
compensation
is to be paid to the claimants who are dependants in
the event of the death of a person,
based on what the
deceased would have contributed to their support. The
amount received by the
dependants becomes a part of
the estate, as they may live longer, or may be younger
than the age limits
taken into account for calculation
of the multiplier to be applied in such a situation. In
the case of the death
of a married person, it is an
accepted norm that the age of the deceased would be
taken into account. The
Court held that even in the
case of a bachelor, the same principle must be applied.
The Court held that once
the law is settled, it should
not repeatedly be changed, since certainty of law is of
crucial importance, to
avoid any confusion.

4.8. In the present case, since the deceased was 21 years

old, the Multiplier of 18 was applicable as per the
table
set out in the Sarla Verma case.

4.9. The High Court erred in reducing the notional income

of the deceased from Rs. 16,246/- as awarded by
the
MACT, and reduced it to Rs. 7,500/.

The deceased was a trained swimmer who had won

several State-level competitions. His mother runs a
Swimming/Gym Centre at Air Force Station (Central
School), Gurgaon. Therefore, the deceased certainly
had the potential to earn a living by utilizing his skills.
In such circumstances, we deem it appropriate to fix
the notional income of the deceased @Rs. 12,000/-
p.m.

4.10. The Courts below failed to grant Future Prospects

@40% of the notional income of the deceased, as
per
the judgment of the Constitution Bench in Pranay
Sethi (supra).

4.11. The amounts awarded by the High Court under the

heads of loss of love and affection, loss of estate,
funeral expenses, and the Interest awarded by the
MACT, are however, maintained.

5 In light of the aforesaid discussion, the compensation

awarded to the Appellants is being enhanced as follows
:

i) Income : Rs. 12,000/-

ii) Future Prospects : Rs. 4,800/- (i.e. 40% of the income)

iii) Deduction towards personal expenses : 50%

iv) Total income : Rs. 8,400/- (i.e. 50% of 12,000 + 4,800)

v) Multiplier : 18
vi) Loss of future income : Rs. 18,14,400/- (i.e. 8,400 x 12 x 18)

vii) Loss of love and affection : Rs. 2,00,000/-

viii) Loss of estate and funeral expenses : Rs. 50,000/-

Total : Rs. 20,64,400/-

Enhanced amount : Rs. 11,39,400/- (i.e. 20,64,400 9,25,000)

6 The Respondent Insurance Company is directed to pay the

enhanced amount of Rs. 11,39,400/- to the
Appellants within
1 month from the date of this judgment.

The enhanced amount shall carry Simple Interest @7% p.a.

from the date of filing the Claim Petition till the
date of
realization.

The Civil Appeal is allowed in the aforesaid terms. All

pending Applications, if any, are accordingly disposed
of.
Ordered accordingly.
 25

2017 (0) AIJEL-SC 59667

SUPREME COURT OF INDIA

(.)

Hon'ble Judges:Arjan Kumar Sikri and R.K.Agrawal JJ.

Sandeep Khanuja Versus Atul Dande

Civil Appeal No. 1329 of 2017 ; *J.Date :- FEBRUARY 2, 2017

MOTOR VEHICLES ACT, 1988 Section - 166 , 168 , 173

Motor Vehicles Act, 1988 - S. 166, 168, 173 - motor accident - determination of
compensation - applicability of multiplier method - appellant was aged about 30 years - he
was working as a Chartered Accountant - 70% permanent disability - Tribunal granted him
compensation in the sum of Rs. 5,35,227/- - High Court enhanced the same to Rs. 6,35,000/-
- appeal - held, in awarding compensation multiplier method is logically sound and legally
well established - this method, known as 'principle of multiplier', has been evolved to
quantify loss of income as result of death or permanent disability suffered in accident -
further, multiplier method involves ascertainment of loss of dependency or multiplicand
having regard to circumstances of case and capitalising multiplicand by appropriate
multiplier - choice of multiplier is determined by age of deceased or that of claimant, as the
case may be - in injury cases, description of nature of injury and permanent disablement are
relevant factors and it has to be seen as to what would be impact of such injury/disablement
on earning capacity of injured - further, there are many statutory functions under various
statutes which the Chartered Accountants perform - free movement is involved for
performance of such functions - person who is engaged and cannot freely move to attend to
his duties may not be able to match earning in comparison with one who is healthy and
bodily abled - movements of appellant have been restricted to a large extent and that too at
a young age - High Court recognised this, however, it did not go forward to apply the
principle of multiplier.

Motor Vehicles Act, 1988 - S. 166, 168, 173 - motor accident - permanent partial disability -
compensation - MACT had quanti ed income of appellant at Rs.10,000, i.e. Rs.1,20,000 per
annum - going by the age of appellant at the time of accident, multiplier of 17 would be
admissible - keeping in view that permanent disability is 70%, compensation under this head
would be worked out at Rs.14,28,000 - MACT had awarded compensation of Rs.70,000 for
permanent disability, which stands enhanced to Rs.14,28,000 - for mental and physical
agony and frustration and disappointment towards life, MACT has awarded a sum of
Rs.30,000, which enhanced to Rs.1,30,000 - thus, after providing for loss of income, medical
and transport expenses and expenses towards removal of rod, total compensation of Rs.
19,93,227/- is awarded - appellant will also be entitled to interest and cost of appeal - appeal
disposed of.
Imp.Para: [ 12 ] [ 13 ] [ 15 ] [ 17 ]

Cases Referred To :

1. England, As Appears From Mallet V/s. Mcmonagle, 1969 0 ACJ 312

2. Kerala Srtc V/s. Susamma Thomas, 1994 2 SCC 176 : 1994 AIR SC 1631 : 1993 (4)
Scale 643 : JT 1993 (Supp) 573 : 1994 AIR SCW 1356
3. Madhya Pradesh State Road Transport Corporation, Bairagarh, Bhopal V/s. Sudhakar,
1977 3 SCC 64 : 1977 AIR SC 1189 : 1977 (3) SCR 627 : 1977 (79) PLR 443 : 1977 ACJ
290
4. Municipal Corporation Of Delhi V/s. Subhagwanti, 1966 3 SCR 649 : 1966 AIR SC 1750 :
1967 (2) SCJ 361 : 1966 (2) SCA 96 : 1967 SCD 240
5. Raj Kumar V/s. Ajay Kumar, 2011 1 SCC 343 : 2010 (12) Scale 265 : 2010 (13) SCR 179
: 2011 (1) SCC(Cri) 1161 : 2011 (98) AIC 251
6. U.P. State Road Transport Corporation, V/s. Trilok Chandra, 1996 4 SCC 362 : 1996 (4)
Scale 522 : JT 1996 (5) 356 : 1996 (Supp2) SCR 443 : 1996 (4) Supreme 479
7. Yadava Kumar V/s. Divisional Manager, National Insurance Company Limited, 2010 10
SCC 341 : 2010 AIR SC 3741 : 2010 (8) Scale 567 : JT 2010 (9) 91 : 2010 (10) SCR 746

Cited in :

1. (Referred To) :- New India Assurance Company Limited Vs. Gajender Yadav, 2017 (8)
Scale 190 : JT 2017 (7) SC 284 : 2017 (180) AIC 171 : 2017 (3) ApexCJ(SC) 298 : 2017
(3) RCR(Civ) 974 : 2017 (4) RecApexJ 577 : 2017 DNJ(SC) 887 : 2017 ACJ 2834 : 2017
(2) TNMAC 465 : 2017 AIJEL_SC 61341

Equivalent Citation(s):
2017 (3) SCC 351 : AIR 2018 SC(Supp) 1246

JUDGMENT :-

A.K.Sikri, J.

1 Leave granted.

2 In a motor accident, the appellant herein suffered physical injuries. It happened on July 08,
2006 when the appellant was going on a scooter to Gram Pendri in the State of
Chhattisgarh. When he reached near Gram Pendri, a Hyundai Getz car bearing Registration
No. MH 12 CR 6917, driven by respondent No.1, hit the scooter, as a result of which the
appellant fell down and sustained fractures on both the legs, thereby suffering permanent
disability to some extent. He filed claim for compensation against the respondents before
the Motor Accidents Claims Tribunal (MACT), Rajnandgaon, Chhattisgarh. The MACT, vide
award dated May 05, 2009, granted him compensation in the sum of Rs.5,35,227, under the
following heads:

padding:2.4pt padding:2.4pt padding:2.4pt

2.4pt 2.4pt 2.4pt 2.4pt 2.4pt 2.4pt
2.4pt' > 2.4pt' > 2.4pt' >

font-family:Arial'   font-family:Arial'
>Head >Amount (in Rs.
)
 padding:2.4pt padding:2.4pt padding:2.4pt
2.4pt 2.4pt 2.4pt 2.4pt 2.4pt 2.4pt
2.4pt;height:.4in' 2.4pt;height:.4in' 2.4pt;height:.4in'
> > >
Medical & font-family:Arial' font-family:Arial'
Transport >- >3,10,227
Expenses
padding:2.4pt padding:2.4pt padding:2.4pt
2.4pt 2.4pt 2.4pt 2.4pt 2.4pt 2.4pt
2.4pt' > 2.4pt' > 2.4pt' >
Loss of Income font-family:Arial' font-family:Arial'
>- >1,00,000
padding:2.4pt padding:2.4pt padding:2.4pt
2.4pt 2.4pt 2.4pt 2.4pt 2.4pt 2.4pt
2.4pt' > 2.4pt' > 2.4pt' >
Mental & Physical font-family:Arial' font-family:Arial'
agony >- >30,000
padding:2.4pt padding:2.4pt padding:2.4pt
2.4pt 2.4pt 2.4pt 2.4pt 2.4pt 2.4pt
2.4pt' > 2.4pt' > 2.4pt' >
Removal of rod font-family:Arial' font-family:Arial'
inserted
in right leg >- >25,000
padding:2.4pt padding:2.4pt padding:2.4pt
2.4pt 2.4pt 2.4pt 2.4pt 2.4pt 2.4pt
2.4pt' > 2.4pt' > 2.4pt' >
Permanent font-family:Arial' font-family:Arial'
disability to
some >- >70,000
extent
padding:2.4pt padding:2.4pt padding:2.4pt
2.4pt 2.4pt 2.4pt 2.4pt 2.4pt 2.4pt
2.4pt' > 2.4pt' > 2.4pt' >

font-family:Arial' font-family:Arial' font-family:Arial'

>TOTAL >- >5,35,227

3 Not satisfied with the quantum of compensation, the appellant approached the High Court
by way of appeal under Section 173 of the Motor Vehicles Act, 1988 (for short, the 'Act'). The
High Court has, vide impugned judgment, enhanced the compensation to Rs.6,35,000. The
High Court has not awarded compensation under different heads but has deemed it proper
to award lump sum compensation in the aforesaid amount. Relevant discussion in this
behalf can be traced to paras 8 and 9 of the impugned judgment, which reads as under:

"(8) We have gone through the evidence adduced by the claimant on the issue of injury
sustained by him. In our opinion, taking into consideration the nature of injury, the
permanent disability occurred on the body of the appellant (claimant) to some extent,
as a result of which he claims to be not as fit as he was prior to accident in his day-to-
day work, resulting in reducing his capacity to do some extent of work, the expenditure
 incurred in receiving medical treatment in actual, the loss and mental pain suffered due
to his involvement in accident we consider it proper to enhance in lump sum the
compensation from Rs.5,35,227/- to Rs.6,35,000/-. In other words, in our view, the
claimant is held entitled for a total sum of Rs.6,35,000/- by way of compensation for
the injuries sustained by him.

(9) In our considered opinion, due to injuries in both legs which is also duly proved in
evidence by the claimant and his doctor, he cannot freely move and attend to his
duties. His movements are restricted to a large extent and that too in young age. It is
for all these reasons, we feel that the Tribunal had awarded a less compensation under
this head and hence, some enhancement under the head of pain and suffering and also
under the head of permanent partial disability and loss of earning capacity is called for.
This enhancement figure is arrived at taking into consideration all relevant factors."

4 The appellant is not satisfied with the aforesaid approach and the manner in which the
compensation is awarded. According to him, had the Court applied proper provision and
principles laid down under the Act, the appellant would have been entitled to much more
compensation.

5 We may state, at the outset, that the MACT recorded a specific finding that the accident
took place due to rash and negligent driving of car by respondent No.1 which hit the scooter
of the appellant. Respondent No.1 did not challenge the finding of the MACT and, therefore,
this aspect has attained finality and we need not go into the same. The dispute, therefore,
pertains only to the quantum of the compensation that has to be awarded. Few facts
relevant for resolving the dispute, which appear on the record, are as under:

6 At the time of the accident, the appellant was aged about 30 years. He was working as a
Chartered Accountant. The appellant had produced evidence to the effect that he had
worked as a Chartered Accountant for various institutions for which he was paid
professional fee. He had produced statements in this behalf (Exhibits P-195 to P-208) and
on that basis he claimed that his monthly income was Rs.34,600. He also proved on record
the income tax return for the year 2006-2007 (Exhibit P-194). The certificates which were
produced by the appellant showing the professional fee which he had received was not
accepted by the MACT on the ground that he had started the business in the month of
March 2006 and there was enough professional competition in the said field. Moreover, the
person issuing the certificate had not been produced. On this basis, the Tribunal assessed
the monthly income of the appellant at Rs.10,000.

7 Insofar as injuries suffered by the appellant in the said accident are concerned, he had
stated that his health had impaired drastically and lungs infected because of which he was
admitted in the Intensive Care Unit and he was kept on ventilator and was operated thrice.
He had problem in climbing stairs, running, trouble of back while sleeping, etc. A rod is
planted in his leg. Because of all this he has suffered 70% permanent disability, apart from
mental and physical agony and the said disability is going to give him frustration and
disappointment towards life. He pleaded that this disability has affected his efficiency in
work as well resulting in loss of future income as well.

8 As already noticed above, the MACT granted him compensation by reimbursing expenses
incurred towards treatment and transportation, loss of income, mental and physical agony
and expenses for removing the rod planted in his leg. The appellant contends that
compensation awarded for mental agony and physical suffering is too less. That apart, his
main grievance is that only a paltry sum of Rs.70,000 is awarded by the MACT for
permanent disability suffered by him, which is too inadequate.
9 We may note in this behalf that the MACT, though accepted the aforesaid injuries and
physical incapacity suffered by the appellant, was of the opinion that even when it was not
possible for the appellant to do work like a healthy person, looking to the nature of the said
injuries, insofar as work of a Chartered Accountant is concerned, he could still perform it
properly and there was no impairment therein. For this reason, the MACT refused to award
compensation to the appellant by applying the principle of multiplier based on permanent
disability and granted a lump sum amount of Rs.70,000. The High Court has not gone into
this aspect specifically.

10 In this conspectus, the only argument advanced by the learned counsel for the appellant
was that the appellant was entitled to the compensation on the basis of multiplier, as per the
provisions of the Act, fur suffering permanent disability to the extent of 70% and there was
no reason not to apply the said multiplier.

11 Learned counsel for the respondent, on the other hand, made an endeavour to justify the
approach of the MACT with the submission that when the injuries suffered by him, even
resulting in 70% permanent disability, had no adverse affect on the working of the appellant,
who was a Chartered Accountant, he was not entitled to have the compensation computed
by invoking the principle of multiplier.

12 We may observe at the outset that it is now a settled principle, repeatedly stated and
restated time and again by this Court, that in awarding compensation the multiplier method
is logically sound and legally well established. This method, known as 'principle of
multiplier', has been evolved to quantify the loss of income as a result of death or permanent
disability suffered in an accident. Recognition to this principle was given for the first time in
the year 1966 in the case of Municipal Corporation of Delhi V/s. Subhagwanti & Ors., (1966)
3 SCR 649 Again, in Madhya Pradesh State Road Transport Corporation, Bairagarh, Bhopal v.
Sudhakar & Ors. (1977) 3 SCC 64, the Court referred to an English decision while
emphasising the import of this principle in the following manner: "

4. A method of assessing damages, usually followed in England, as appears from

Mallet v. McMonagle 1969 ACJ 312 (HL. England), is to calculate the net pecuniary
loss upon an annual basis and to "arrive at the total award by multiplying the figure
assessed as the amount of the annual `dependency' by a number of `year's purchase'
that is the number of years the benefit was expected to last, taking into consideration
the imponderable factors in fixing either the multiplier or the multiplicand..."

13 While applying the multiplier method, future prospects on advancement in life and career
are taken into consideration. In a proceeding under Section 166 of the Act relating to death
of the victim, multiplier method is applied after taking into consideration the loss of income
to the family of the deceased that resulted due to the said demise. Thus, the multiplier
method involves the ascertainment of the loss of dependency or the multiplicand having
regard to the circumstances of the case and capitalising the multiplicand by an appropriate
multiplier. The choice of the multiplier is determined by the age of the deceased or that of
the claimant, as the case may be. In injury cases, the description of the nature of injury and
the permanent disablement are the relevant factors and it has to be seen as to what would
be the impact of such injury/disablement on the earning capacity of the injured. This Court,
in the case of U.P. State Road Transport Corporation & Ors. v. Trilok Chandra & Ors. (1996) 4
SCC 362 justified the application of multiplier method in the following manner:

"13. It was rightly clarified that there should be no departure from the multiplier method
on the ground that Section 110-B, Motor Vehicles Act, 1939 (corresponding to the
present provision of Section 168, Motor Vehicles Act, 1988 ) envisaged payment of
 `just' compensation since the multiplier method is the accepted method for
determining and ensuring payment of just compensation and is expected to bring
uniformity and certainty of the awards made all over the country."

The multiplier system is, thus, based on the doctrine of equity, equality and necessity. A
departure therefrom is to be done only in rare and exceptional cases.

14 In the last few years, law in this aspect has been straightened by this Court by removing
certain cobwebs that had been created because of some divergent views on certain
aspects. It is not even necessary to refer to all these cases. We find that the principle of
determination of compensation in the case of permanent/partial disablement has been
exhaustively dealt with after referring to the relevant case law on the subject in the case of
Raj Kumar v. Ajay Kumar & Ors. 2011(1) Recent Apex Judgments (R.A.J.) 571 : (2011) 1 SCC
343 in the following words:

"Assessment of future loss of earnings due to permanent disability

8. Disability refers to any restriction or lack of ability to perform an activity in the

manner considered normal for a human being. Permanent disability refers to the
residuary incapacity or loss of use of some part of the body, found existing at the end
of the period of treatment and recuperation, after achieving the maximum bodily
improvement or recovery which is likely to remain for the remainder life of the injured.
Temporary disability refers to the incapacity or loss of use of some part of the body on
account of the injury, which will cease to exist at the end of the period of treatment and
recuperation. Permanent disability can be either partial or total. Partial permanent
disability refers to a person's inability to perform all the duties and bodily functions that
he could perform before the accident, though he is able to perform some of them and
is still able to engage in some gainful activity. Total permanent disability refers to a
person's inability to perform any avocation or employment related activities as a result
of the accident. The permanent disabilities that may arise from motor accident injuries,
are of a much wider range when compared to the physical disabilities which are
enumerated in the Persons with Disabilities (Equal Opportunities, Protection of Rights
and Full Participation) Act, 1995 ("the Disabilities Act", for short). But if any of the
disabilities enumerated in Section 2(i) of the Disabilities Act are the result of injuries
sustained in a motor accident, they can be permanent disabilities for the purpose of
claiming compensation.

9. The percentage of permanent disability is expressed by the doctors with reference to

the whole body, or more often than not, with reference to a particular limb. When a
disability certificate states that the injured has suffered permanent disability to an
extent of 45% of the left lower limb, it is not the same as 45% permanent disability with
reference to the whole body. The extent of disability of a limb (or part of the body)
expressed in terms of a percentage of the total functions of that limb, obviously cannot
be assumed to be the extent of disability of the whole body. If there is 60% permanent
disability of the right hand and 80% permanent disability of left leg, it does not mean
that the extent of permanent disability with reference to the whole body is 140% (that is
80% plus 60%). If different parts of the body have suffered different percentages of
disabilities, the sum total thereof expressed in terms of the permanent disability with
reference to the whole body cannot obviously exceed 100%.

10. Where the claimant suffers a permanent disability as a result of injuries, the
assessment of compensation under the head of loss of future earnings would depend
upon the effect and impact of such permanent disability on his earning capacity. The
 Tribunal should not mechanically apply the percentage of permanent disability as the
percentage of economic loss or loss of earning capacity. In most of the cases, the
percentage of economic loss, that is, the percentage of loss of earning capacity, arising
from a permanent disability will be different from the percentage of permanent
disability. Some Tribunals wrongly assume that in all cases, a particular extent
(percentage) of permanent disability would result in a corresponding loss of earning
capacity, and consequently, if the evidence produced show 45% as the permanent
disability, will hold that there is 45% loss of future earning capacity. In most of the
cases, equating the extent (percentage) of loss of earning capacity to the extent
(percentage) of permanent disability will result in award of either too low or too high a
compensation.

11. What requires to be assessed by the Tribunal is the effect of the permanent
disability on the earning capacity of the injured; and after assessing the loss of earning
capacity in terms of a percentage of the income, it has to be quantified in terms of
money, to arrive at the future loss of earnings (by applying the standard multiplier
method used to determine loss of dependency). We may however note that in some
cases, on appreciation of evidence and assessment, the Tribunal may find that the
percentage of loss of earning capacity as a result of the permanent disability, is
approximately the same as the percentage of permanent disability in which case, of
course, the Tribunal will adopt the said percentage for determination of compensation."

15 The crucial factor which has to be taken into consideration, thus, is to assess as to
whether the permanent disability has any adverse effect on the earning capacity of the
injured. In this sense, the MACT approached the issue in right direction by taking into
consideration the aforesaid test. However, we feel that the conclusion of the MACT, on the
application of the aforesaid test, is erroneous. A very myopic view is taken by the MACT in
taking the view that 70% permanent disability suffered by the appellant would not impact the
earning capacity of the appellant. The MACT thought that since the appellant is a Chartered
Accountant, he is supposed to do sitting work and, therefore, his working capacity is not
impaired. Such a conclusion was justified if the appellant was in the employment where job
requirement could be to do sitting/table work and receive monthly salary for the said work.
An important feature and aspect which is ignored by the MACT is that the appellant is a
professional Chartered Accountant. To do this work efficiently and in order to augment his
income, a Chartered Accountant is supposed to move around as well. If a Chartered
Accountant is doing taxation work, he has to appear before the assessing authorities and
appellate authorities under the Income Tax Act, as a Chartered Accountant is allowed to
practice up to Income Tax Appellate Tribunal. Many times Chartered Accountants are
supposed to visit their clients as well. In case a Chartered Accountant is primarily doing
audit work, he is not only required to visit his clients but various authorities as well. There
are many statutory functions under various statutes which the Chartered Accountants
perform. Free movement is involved for performance of such functions. A person who is
engaged and cannot freely move to attend to his duties may not be able to match the
earning in comparison with the one who is healthy and bodily abled. Movements of the
appellant have been restricted to a large extent and that too at a young age. Though the High
Court recognised this, it did not go forward to apply the principle of multiplier. We are of the
opinion that in a case like this and having regard to the injuries suffered by the appellant,
there is a definite loss of earning capacity and it calls for grant of compensation with the
adoption of multiplier method, as held by this Court in Yadava Kumar v. Divisional Manager,
National Insurance Company Limited & Anr., 2010(5) Recent Apex Judgments (R.A.J.) 116 :
(2010) 10 SCC 341:
 "9. We do not intend to review in detail state of authorities in relation to assessment of
all damages for personal injury. Suffice it to say that the basis of assessment of all
damages for personal injury is compensation. The whole idea is to put the claimant in
the same position as he was insofar as money can. Perfect compensation is hardly
possible but one has to keep in mind that the victim has done no wrong; he has
suffered at the hands of the wrongdoer and the court must take care to give him full
and fair compensation for that he had suffered.

10. In some cases for personal injury, the claim could be in respect of lifetime's
earnings lost because, though he will live, he cannot earn his living. In others, the claim
may be made for partial loss of earnings. Each case has to be considered in the light of
its own facts and at the end, one must ask whether the sum awarded is a fair and
reasonable sum. The conventional basis of assessing compensation in personal injury
cases-and that is now recognised mode as to the proper measure of compensation-is
taking an appropriate multiplier of an appropriate multiplicand."

16 In that case, after following the judgment in Kerala SRTC v. Susamma Thomas (1994) 2
SCC 176, the Court chose to apply multiplier of 18 keeping in view the age of the victim, who
as 25 years at the time of the accident.

17 In the instant case, the MACT had quantified the income of the appellant at Rs.10,000, i.e.
Rs.1,20,000 per annum. Going by the age of the appellant at the time of the accident,
multiplier of 17 would be admissible. Keeping in view that the permanent disability is 70%,
the compensation under this head would be worked out at Rs.14,28,000. The MACT had
awarded compensation of Rs.70,000 for permanent disability, which stands enhanced to
Rs.14,28,000. For mental and physical agony and frustration and disappointment towards
life, the MACT has awarded a sum of Rs.30,000, which we enhance to Rs.1,30,000. In this
manner, the compensation that is payable to the appellant is worked out as under:

2-2.(1)htm.

The appellant shall also be entitled to the interest, as awarded by the High Court, as
well as costs of this appeal. The amount shall be paid to the appellant within two
months after deducting the payments already made.

18 The appeal is disposed of accordingly.

 26
2020 (0) AIJEL-SC 66336

SUPREME COURT OF INDIA

Hon'ble Judges:S.Abdul Nazeer, Indu Malhotra and Aniruddha Bose JJ.

United India Insurance Co.Ltd. Versus Satinder Kaur @ Satwinder Kaur

with

Satinder Kaur @ Satwinder Kaur Versus United India Insurance Co.Ltd.

CIVIL APPEAL No. 2705 of 2020 ;

CIVIL APPEAL No. 2706 of 2020 ; *J.Date :- JUNE 30, 2020

MOTOR VEHICLES ACT, 1988 Section - 166 , 168 , 173

(a) Motor Vehicles Act, 1988 - S. 166 - accidental death - principles for assessment of compensation in cases of death -
criteria which are to be taken into consideration for assessing compensation in the case of death, are (i) age of
deceased at the time of his death; (ii) number of dependants left behind by deceased; and (iii) income of deceased at
the time of his death. (Para 8)

(b) Motor Vehicles Act, 1988 - S. 166 - compensation in head of losing of love and affection - loss of consortium was
historically given a narrow meaning to be awarded only to spouse i.e. right of spouse to company, care, help, comfort,
guidance, society, solace, affection and sexual relations with his or her mate - loss of companionship, love, care and
protection, etc., spouse is entitled to get, has to be compensated appropriately - right to consortium would include the
company, care, help, comfort, guidance, solace and affection of deceased, which is a loss to his family - there is no
justification to award compensation towards loss of love and affection as a separate head. (Para 8)

(c) Motor Vehicles Act, 1988 - S. 166, 168, 173 - accidental death - computation of compensation - deceased working
in Qatar - income of deceased in 1984 as per his Employment Contract Form dated 21.8.1984, was 750 Qatari Riyal
p.m. - in absence of any other evidence being produced by claimants, income of deceased would be required to be
computed by taking his base salary at 750 Qatari Riyal p.m. in 1984 as a skilled labourer, as reflected in his
Employment Contract Form - by taking an increment of 10% per annum from 1984 till 1998, notional income of
deceased could be fixed at 2590 Qatari Riyal p.m., which can be rounded off to 2600 Qatari Riyal p.m. - therefore,
income of deceased would work out to 2600 x 12.41 = Rs. 32,266 p.m. i.e. Rs. 3,87,192 p.a. - deduction towards
personal and living expenses should be 50% of income, since he was living in a foreign country - High Court rightly
deducted 50% of his income towards personal and living expenses - courts below failed to award any amount towards
future prospects - future prospects @ 30% are to be awarded for computing compensation payable to claimants -
multiplicand for computing the compensation would be Rs. 3,87,192 - 50% + 30% = Rs. 2,51,675/- - deceased was 40
years of age at the time of his death - therefore, multiplier of 15 would be the appropriate multiplier - thus, loss of
dependency payable to claimants would work out to Rs. 37,75,125 - further, under conventional heads for loss of
Estate Rs. 15,000/-, for loss of Consortium, spousal Consortium Rs. 40,000/-, parental Consortium Rs. 40,000/- each
awarded and for Funeral Expenses Rs. 15,000/- awarded - therefore, total compensation to be paid is Rs. 19,82,563/- -
dependants have been pursuing legal proceedings for grant of compensation since the past 22 years - therefore, it is
appropriate to direct that Interest @12% p.a. be paid on total compensation awarded, from the date of filing the
claim petition, till realization. (Para 9,10)

Cases Relied on :

1. General Manager, Kerala S.R.T.C., Trivandrum V. Susamma Thomas & Ors., 1994 2 SCC 176 : 1994 AIR SC 1631
: 1993 (4) Scale 643 : JT 1993 (Supp) 573 : 1994 AIR SCW 1356
 2. Magma General Insurance Co. Ltd. V. Nanu Ram & Ors., 2018 18 SCC 130 : 2018 (11) Scale 247 : JT 2018 (9) 195
: 2019 (1) Supreme 262 : 2019 (3) SCC(Cri) 153
3. Munna Lal Jain & Ors. V. Vipin Kumar Sharma & Ors., 2015 6 SCC 347 : 2015 AIR SC(Supp) 1130 : 2015 (6)
Scale 522 : JT 2015 (5) 1 : 2015 AIR SCW 3105
4. National Insurance Co. Ltd. V. Pranay Sethi & Ors., 2017 16 SCC 680 : 2017 AIR SC 5157 : 2017 (13) Scale 12 :
JT 2017 (10) 450 : 2017 (8) Supreme 107
5. New India Assurance Co. Ltd. V. Charlie & Ors, 2005 10 SCC 720 : 2005 AIR SC 2157 : 2005 (3) Scale 541 : JT
2005 (11) 264 : 2005 (2) SCR 1173
6. Reshma Kumari & Ors. V. Madan Mohan & Anr., 2013 9 SCC 65 : 2013 AIR SC(Supp) 474 : 2013 (5) Scale 160 :
JT 2013 (4) 362 : 2013 (2) SCR 706
7. Royal Sundaram Alliance Insurance Co. Ltd. V. Mandala Yadagari Goud & Ors., 2019 5 SCC 554 : 2019 AIR SC
1825 : 2019 (6) Scale 82 : JT 2019 (4) 547 : 2019 (4) Supreme 254
8. Sarla Verma & Ors. V. Delhi Transport Corporation & Anr., 2009 6 SCC 121 : 2009 AIR SC 3104 : 2009 (6) Scale
129 : JT 2009 (6) 495 : 2009 (5) SCR 1098
9. Sube Singh & Ors. V. Shyam Singh (Dead) & Ors., 2018 3 SCC 18 : 2018 AIR SC 1195 : 2018 (2) Scale 385 : JT
2018 (2) 204 : 2018 (3) Supreme 453
10. Sunita Tokas And Ors. V. New India Insurance Co. Ltd. And Ors., 2019 11 SCALE 24 : 2019 (20) SCC 688 : 2019
AIR SC 3921 : 2019 (11) Scale 24 : JT 2019 (8) 264
11. U.P.S.R.T.C. & Ors. V. Trilok Chandra & Ors., 1996 4 SCC 362 : 1996 (4) Scale 522 : JT 1996 (5) 356 : 1996
(Supp2) SCR 443 : 1996 (4) Supreme 479

Equivalent Citation(s):
AIR 2020 SC 3076 : 2020 (8) Scale 482

JUDGMENT :-

INDU MALHOTRA, J.

1 The deceased - Satpal Singh was residing in Doha, Qatar since 1984. The Employment Contract Form of the deceased
dated 21.08.1984 revealed that he was engaged as a labourer initially for a period of one year on a salary of 750 Qatari Riyal
p.m., and continued to live in Qatar where he was employed, till he passed away in a motor vehicle accident in India in
1998.

2 Satpal Singh was visiting India in November, 1998. On 18.11.1998, 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 the offending car.

The FIR was lodged on the statement of Satinder Kaur - widow of the deceased, wherein she had stated that the
accident had occurred due to the rash and negligent driving of the driver of the Maruti car. It was further stated that
the accident took place while her husband was over-taking a tractor-trolley, when the Maruti car was coming at a
high speed from the opposite side. This led to the accident, and caused the death of Satpal Singh on the spot.

The Claimant No. 1 i.e. wife of the deceased was also seriously injured. Her right leg and jaw were fractured. The
Claimant No. 1 remained in hospital for over a month. A rod was inserted in her leg, and remained in plaster for
about 7 to 8 months. The accident led to 25% permanent disability, which is borne out from the Disability Certificate
issued by the Civil Surgeon, Patiala.

3 Claim Petition bearing M.A.C. Application No. 152 was filed before the MACT, Patiala (Punjab) on 24.12.1998 u/S. 166
of the Motor Vehicles Act, 1988 by the widow of the deceased, on behalf of herself and 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.

3.1. A copy of the FIR was placed before the MACT, as also the Post Mortem Report which recorded the serious
head injuries caused by the road accident on the deceased.

3.2. The Claimants filed a photocopy of the Employment Contract Form dated 10.07.1984 certified by the Indian
Embassy at Doha, which records the engagement of the deceased as a labourer by the firm Ali Al Fayyad Trading
Contracting Est., Doha on a salary of 750 Qatari Riyal p.m., when he first shifted to Qatar.
 3.3. The Claimants also placed on record a letter dated 27.06.1997 purported to have been issued by his employer -
the High Speed Group to the Counsellor, New Zealand Consulate for issuance of a visa. It was stated that the
General Manager of their company, Mr. Satpal Harbans Singh was intending to spend his annual vacation during
June - August 1997 in New Zealand, and had been employed by this organization since 1984, and was now drawing
a salary of $ 6,700 p.m.

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

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

The passport entries reveal frequent foreign travel during the period 1986 till 1998 when he expired.

4 The MACT vide Award dated 30.03.2001 held that a perusal of the first statement made by Claimant No. 1 - widow of the
deceased in the FIR, revealed that her husband was over-taking a tractor-trolley when the accident occurred, because the
Maruti car was coming at a high speed from the opposite side. Consequently, the MACT held that it was a case of
contributory negligence on the part of the deceased Satpal Singh, as also on the part of the driver of the Maruti car.

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

4.2. With respect to the income of the deceased, the MACT held that the letter dated 27.06.1997 issued by the High
Speed Group, had not been proved by the Claimants, nor was it attested by the Indian Embassy at Doha, and
therefore refused to take it into consideration.

4.3. The MACT assumed that the income of the deceased Satpal Singh should be assessed just as an ordinary skilled
worker, and assessed his income at Rs. 4,000 p.m. The amount of dependency 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 out to Rs. 1.80 lacs. An amount of Rs. 10,000 was awarded towards 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 of
payment.

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

5 Aggrieved by the aforesaid Judgment, the Claimants filed an Appeal being F.A.O. No. 2294/2001 before the High Court
for further enhancement.

5.1. The High Court vide the impugned Judgment and Order dated 10.03.2014 upheld the findings of the MACT
regarding contributory negligence.

5.2. With respect to the income of the deceased, the High Court proceeded on the basis of the letter dated 27.06.1997
issued by the High Speed Group, , wherein it was stated that Satpal Singh was working as a General Manager, and
drawing a salary of $ 6,700 p.m. which would be equivalent to Rs. 2,68,000 p.m. at the time when the claim was
filed.

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

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

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

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

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

5.4. The High Court held the Insurance Company to be liable to pay the compensation, which would be distributed
equally between the widow and children of the deceased. The enhanced 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 evidence placed on record before the Courts below, and have
considered the oral submissions made by the Counsel for the parties.

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

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

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

In Sarla Verma & Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121. this Court held that to arrive at the
loss of dependency, the tribunal ought to 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 expenses of the deceased; and

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

In order to provide uniformity and consistency in awarding compensation, 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
regard to the amount which the deceased would have spent on himself by way of personal and living expenses. The
balance, which is 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 active career, the appropriate multiplier should be selected.
This does not mean ascertaining the number of years he would have lived or worked but for the accident. Having
regard to several imponderables in life and economic factors, a table of multipliers with reference to the age has been
identified by this Court. The multiplier should be chosen from the said table with reference to the age of the
deceased.

Step 3 (Actual calculation)

The annual contribution to the family (multiplicand) when multiplied by such multiplier gives the 'loss of
dependency' to the family.

Thereafter, a conventional amount in the range of Rs. 5,000/- to Rs. 10,000/- may be added as loss of estate. Where
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. But no amount is to be awarded under the head of pain, suffering or
hardship caused to the legal heirs of the deceased.

The funeral expenses, cost of transportation of the body (if incurred) and cost of any medical treatment of the
deceased before death (if incurred) should also added.

(emphasis supplied)

(a) Deduction for personal and living expenses

The personal and living expenses of the deceased should be deducted from the income, to arrive at the contribution
to the family. In Sarla Verma (supra) (paras 30, 31 and 32), this Court took the view that it was necessary to
standardize the deductions to be made under the head personal and living expenses of the deceased.
Accordingly, it was held that :

where the deceased was married, the deduction towards personal and living expenses should be 1/3rd if the number
of dependant family members is two to three;

1/4th if the number of dependant family members is four to six; and

1/5th if the number of dependant family members exceeds six.

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

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

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

Thus, even if the deceased was survived by parents and siblings, only the mother would be considered to be a
dependant. The deduction towards personal expenses of a bachelor would be 50%, and 50% would be the
contribution to the family.

However, in a case where the family of the bachelor was large and dependant on the income of the deceased, as in a
case where he had a widowed mother, and a large number of younger non-earning sisters or brothers, his personal
and living expenses could be restricted to 1/3rd, and contribution to the family be taken as 2/3rd.

A three-judge bench in Reshma Kumari & Ors. v. Madan Mohan & Anr., (2013) 9 SCC 65. affirmed the standards
fixed in Sarla Verma (supra) with respect to the deduction for personal and living expenses, and held that these
standards must ordinarily be followed, unless a case for departure is made out. The Court held :

41. The above does provide guidance for the appropriate deduction for personal and living expenses. One must bear
in mind that the proportion of a man s net earnings that he saves or spends exclusively for the maintenance of others
does not form part of his living expenses but what he spends exclusively on himself does. The percentage of
deduction on account of personal and living expenses may vary with reference to the number of dependant members
in the family and the personal living expenses of the deceased need not exactly correspond to the number of
dependants.

42. In our view, the standards fixed by this Court in Sarla Verma 2009 (6) SCC 121 on the aspect of deduction for
personal living expenses in paragraphs 30, 31 and 32 must ordinarily be followed unless a case for departure in the
circumstances noted in the preceding para is made out.

43. In what we have discussed above, we sum up our conclusions as follows:

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

(emphasis supplied)

A Constitution Bench of this Court in National Insurance Co. Ltd. v. Pranay Sethi & Ors., (2017) 16 SCC 680 held
that the standards fixed in Sarla Verma (supra) would provide guidance for appropriate deduction towards personal
and living expenses, and affirmed the conclusion in para 43.6 of Reshma Kumari (supra).

(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 with the age of the deceased, after considering the judgments in 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) 4
SCC 362. and New India Assurance Co. Ltd. v. Charlie & Ors, (2005) 10 SCC 720.

The relevant extract from the said chart i.e. Column 4 has been set out hereinbelow for ready reference :-
Age of the deceased Multiplier (Column 4)
Upto 15 years -

15 to 20 years 18
21 to 25 years 18
26 to 30 years 17
31 to 35 years 16
36 to 40 years 15
41 to 45 years 14
46 to 50 years 13
51 to 55 years 11
56 to 60 years 9
61 to 65 vears 7
Above 65 vears 5
The Court in Sarla Verma (supra) held :-

42. We therefore hold that the multiplier to be used should be as mentioned in column (4) of the Table above
(prepared by applying Susamma Thomas, Trilok Chandra and Charlie), which starts with an operative multiplier of
18 (for the age groups of 15 to 20 and 21 to 25 years), reduced by one unit for every five years, that is M-17 for 26 to
30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and M-13 for 46 to 50 years,
then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to
65 years and M-5 for 66 to 70 years.

(emphasis supplied) In Reshma Kumari (supra), this Court affirmed Column 4 of the chart prepared in Sarla Verma (supra),
and held that this would provide uniformity and consistency in determining the multiplier to be applied. The Constitution
Bench in Pranay Sethi (supra) affirmed the chart fixing the multiplier as expounded in Sarla Verma (supra), and held :-

44. At this stage, we must immediately say that insofar as the aforesaid multiplicand/multiplier is concerned, it has to
be accepted on the basis of income established by the legal representatives of the deceased. Future prospects are to
be added to the sum on the percentage basis and income means actual income less than the tax paid. The multiplier
has already been fixed in Sarla Verma which has been approved in Reshma Kumari with which we concur.

59.6. The selection of multiplier shall be as indicated in the Table in Sarla Verma read with paragraph 42 of that
judgment.

(emphasis supplied)

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

In Sarla Verma (supra), this Court held that the multiplier should be determined with reference to the age of the
deceased. This was subsequently affirmed in Reshma Kumari (supra), and followed in a line of decisions.

A three-judge bench in Munna Lal Jain & Ors. v. Vipin Kumar Sharma & Ors., (2015) 6 SCC 347. held that the issue
had been decided in Reshma Kumari (supra), wherein this Court held that the multiplier must be with reference to
the age of the deceased. The decision in Munna Lal Jain (supra) was followed by another three-judge bench of this
Court in Sube Singh & Ors. v. Shyam Singh (dead) & Ors., (2018) 3 SCC 18.

The Constitution Bench in National Insurance Company Limited v. Pranay Sethi & Ors., (2017) 16 SCC 680.
affirmed the view taken in Sarla Verma (supra) and Reshma Kumari (supra), and held that the age of the deceased
 should be the basis for applying the multiplier.

Another three-judge bench in Royal Sundaram Alliance Insurance Co. Ltd. v. Mandala Yadagari Goud & Ors.,
(2019) 5 SCC 554. traced out the law on this issue, and held that the compensation is to be computed based on what
the deceased would have contributed to support the dependants. In the case of the death of a married person, it is an
accepted norm 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 this Court in Sunita Tokas and Ors. v. New India
Insurance Co. Ltd. and Ors., 2019 (11) SCALE 24.

(d) Future Prospects

In the wake of increased inflation, rising consumer prices, and general standards of living, future prospects have to
be taken into consideration, not only with respect to the status or educational qualifications of the deceased, but also
other relevant factors such as higher salaries and perks which are being offered by private companies these days. The
dearness allowance and perks from which the family would have derived monthly benefit, are required to be taken
into consideration for determining the loss of dependency.

In Sarla Verma (supra), this Court held :

24. In Susamma Thomas, this Court increased the income by nearly 100%, in Sarla Dixit, the income was increased
only by 50% and in Abati Bezbaruah the income was increased by a mere 7%. In view of imponderables and
uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50% of actual salary to the actual salary
income of the deceased towards future prospects, where the deceased had a permanent job and was below 40 years.
[Where the annual income is in the taxable range, the words actual salary should be read as actual salary less tax ].
The addition should be only 30% if the age of the deceased was 40 to 50 years. There should be no addition, where
the age of deceased is more than 50 years. Though the evidence may indicate a different percentage of increase, it is
necessary to standardize the addition to avoid different yardsticks being applied or different methods of calculations
being adopted. Where the deceased was self-employed or was on a fixed salary (without provision for annual
increments etc.), the courts will usually take only the actual income at the time of death. A departure therefrom
should be made only in rare and exceptional cases involving special circumstances.

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

57. Having bestowed our anxious consideration, we are disposed to think when we accept the principle of
standardization, there is really no rationale not to apply the said principle to the self-employed or a person who is on
a fixed salary. To follow the doctrine of actual income at the time of death and not to add any amount with regard to
future prospects to the income for the purpose of determination of multiplicand would be unjust. The determination
of income while computing compensation has to include future prospects so that the method will come within the
ambit and sweep of just compensation as postulated Under Section 168 of the Act. In case of a deceased who had
held a permanent job with inbuilt grant of annual increment, there is an acceptable certainty. But to state that the
legal representatives of a deceased who was on a fixed salary would not be entitled to the benefit of future prospects
for the purpose of computation of compensation would be inapposite. It is because the criterion of distinction
between the two in that event would be certainty on the one hand and staticness on the other. One may perceive that
the comparative measure is certainty on the one hand and uncertainty on the other but such a perception is fallacious.
It is because the price rise does affect a self-employed person; and that apart there is always an incessant effort to
enhance one's income for sustenance. The purchasing capacity of a salaried person on permanent job when increases
because of grant of increments and pay revision or for some other change in service conditions, there is always a
competing attitude in the private sector to enhance the salary to get better efficiency from the employees. Similarly, a
person who is self-employed is bound to garner his resources and raise his charges/fees so that he can live with same
facilities. To have the perception that he is likely to remain static and his income to remain stagnant is contrary to the
fundamental concept of human attitude which always intends to live with dynamism and move and change with the
time. Though it may seem appropriate that there cannot be certainty in addition of future prospects to the existing
income unlike in the case of a person having a permanent job, yet the said perception does not really deserve
acceptance. We are inclined to think that there can be some degree of difference as regards the percentage that is
meant for or applied to in respect of the legal representatives who claim on behalf of the deceased who had a
permanent job than a person who is self-employed or on a fixed salary. But not to apply the principle of
standardization on the foundation of perceived lack of certainty would tantamount to remaining oblivious to the
marrows of ground reality. And, therefore, degree-test is imperative. Unless the degree-test is applied and left to the
 parties to adduce evidence to establish, it would be unfair and inequitable. The degree-test has to have the inbuilt
concept of percentage. Taking into consideration the cumulative factors, namely, passage of time, the changing
society, escalation of price, the change in price index, the human attitude to follow a particular pattern of life, etc., an
addition of 40% of the established income of the deceased towards future prospects and where the deceased was
below 40 years an addition of 25% where the deceased was between the age of 40 to 50 years would be reasonable.

59. The controversy does not end here. The question still remains whether there should be no addition where the age
of the deceased is more than 50 years. Sarla Verma thinks it appropriate not to add any amount and the same has
been approved in Reshma Kumari. Judicial notice can be taken of the fact that salary does not remain the same.
When a person is in a permanent job, there is always an enhancement due to one reason or the other. To lay down as
a thumb Rule that there will be no addition after 50 years will be an unacceptable concept. We are disposed to think,
there should be an addition of 15% if the deceased is between the age of 50 to 60 years and there should be no
addition thereafter. Similarly, in case of self-employed or person on fixed salary, the addition should be 10% between
the age of 50 to 60 years. The aforesaid yardstick has been fixed so that there can be consistency in the approach by
the tribunals and the courts.

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

59.3. While determining the income, an addition of 50% of actual salary to the income of the deceased towards
future prospects, where the deceased had a permanent job and was below the age of 40 years, should be made. The
addition should be 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, the addition should be 15%. Actual salary should be read as actual salary less tax.

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 warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased
was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be
regarded as the necessary method of computation. The established income means the income minus the tax
component.

(emphasis supplied)

(e) Three Conventional Heads

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

The Court held that the conventional and traditional heads, cannot be determined on percentage basis, because that
would not be an acceptable criterion. Unlike determination of income, the said heads have to be quantified, which
has to be based on a reasonable foundation. It was observed that factors such as price index, fall in bank interest,
escalation 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 be Rs. 15,000/-, Rs.
40,000/- and Rs. 15,000/- respectively. The Court was of the view that the amounts to be awarded under these
conventional heads should be enhanced by 10% every three years, which will bring consistency 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 a narrow meaning to be awarded only to the spouse i.e.
the right of the spouse to the company, care, help, comfort, guidance, society, solace, affection and sexual relations
with his or her mate. The loss of companionship, love, care and protection, etc., the spouse is entitled to get, has to
be compensated appropriately. The concept of non-pecuniary damage for loss of consortium is one of the major
heads for awarding compensation in various jurisdictions such as the United States of America, Australia, etc.
English courts have recognised the right of a spouse to get compensation even during the period of temporary
disablement.

In Magma General Insurance Co. Ltd. v. Nanu Ram & Ors., (2018) 18 SCC 130. this Court interpreted consortium to
be a compendious term, which encompasses spousal consortium, parental consortium, as well as filial consortium.
The right to consortium would include the company, care, help, comfort, guidance, solace and affection of the
deceased, which is a loss to his family. With respect to a spouse, it would include sexual relations with the deceased
 spouse.

Parental consortium is granted to the child upon the premature death 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 the case of an accidental death of a child. An accident
leading to the death of a child causes great shock and agony to the parents and family of the deceased. The greatest
agony for a parent is to lose their child during their lifetime. Children are valued for their love and affection, and
their role in the family unit.

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

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

Parental Consortium is awarded to the children who lose the care and protection of their parents in motor vehicle
accidents.

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

At this stage, we consider it necessary to provide uniformity with respect to the grant of consortium, and loss of love
and affection. Several Tribunals and High Courts have been awarding compensation for both loss of consortium and
loss of love and affection. The Constitution Bench in Pranay Sethi (supra), has recognized only three conventional
heads under which compensation can be awarded viz. loss of estate, loss of consortium and funeral expenses.

In Magma General (supra), this Court gave a comprehensive interpretation to consortium to include spousal
consortium, parental consortium, as well as filial consortium. Loss of love and affection is comprehended in loss of
consortium.

The Tribunals and High Courts are directed to award compensation for loss of consortium, which is a legitimate
conventional head. There is no justification to award compensation towards loss of love and affection as a separate
head.

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

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

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

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

It is pertinent to note that the income of the deceased in 1984 as per his Employment Contract Form dated
21.08.1984, was 750 Qatari Riyal p.m. This document was duly certified by the Indian Embassy at Doha.

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

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

The Insurance Company has seriously disputed the authenticity of this letter.

We have perused the said letter, and are inclined to accept the submission made on behalf of the Insurance Company,
that the said document was not attested by the Indian Embassy at Doha, as per the Diplomatic & Consular Offices
Oaths and Fees Act, 1948.

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

The letter dated 27.06.1997 seems to be suspicious for two other grounds. One, as per the Employment Contract
Form dated 21.08.1984 certified by the Indian Embassy at Doha, the deceased was engaged by the firm Ali Al
Fayyad Trading Contracting Est., Doha in 1984. The letter dated 27.06.1997 issued by the High Speed Group, stated
that the deceased was employed with them since 1984. This leads to a serious doubt about the authenticity of the
letter. Furthermore, the salary is mentioned in U.S. Dollars, rather than Qatari Riyal, even though the High Speed
Group is a local company in Qatar.

Second, the letter dated 27.06.1997 was addressed to the Counselor, New Zealand Consulate for a visa to be issued
to the deceased for his annual vacation to New Zealand during the period June - August, 1997. The passport entries
however, do not show that the deceased travelled to New Zealand.

Consequently, we have serious doubts about the authenticity and veracity of the letter dated 27.06.1997, and decline
to make it the basis for computing the income of the 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 contributory negligence, worked out to Rs. 96,78,000. It is pertinent to
note that the Claimants had prayed for an amount of Rs. 50 lacs as compensation in their claim petition before the
MACT. The High Court has committed an error in awarding such an exorbitant amount on the basis of an unverified
document, the authenticity of which was seriously disputed.

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

A perusal of the passport entries of the deceased reveal that he had continued to remain in employment for a period
of over 14 years in Qatar till he passed away in 1998. He was evidently doing fairly well, since there are numerous
entries of foreign travel in his passport during the 14 years of his stay in Doha. By taking an increment of 10% per
annum from 1984 till 1998, the notional income of the deceased could be fixed at 2590 Qatari Riyal p.m., which can
be rounded off to 2600 Qatari Riyal p.m. As per the exchange rate prevailing in 1998, 1 Qatari Riyal was equivalent
to 12.41 INR. Accordingly, the income of the deceased 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 the deduction towards personal and living expenses should
be 1/4th, if the number of dependant family members is four, in the present case, we feel that 50% of the income of
the deceased would be required to be deducted, since he was living in a foreign country.

The deceased had to maintain an establishment there, and incur expenditure for the same in commensurate with the
high cost of living in a foreign country. Therefore, we are 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 any amount towards future prospects. The deceased Satpal
Singh was just over 40 years of age at the time of his death. As per the judgment of the Constitution Bench in Pranay
Sethi (supra), future prospects @30% are to be awarded for computing the compensation payable to the Claimants.

9.4. The multiplicand for computing the compensation would therefore, 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 time of his death. Accordingly, the multiplier of 15 would
be the appropriate multiplier as per the table set out in Sarla Verma (supra).

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

9.7. Insofar as the conventional heads are concerned, the deceased Satpal Singh left behind a widow and three
children as his dependants. On the basis of the judgments in Pranay Sethi (supra) and Magma General (supra), the
following amounts 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

9.8. We affirm the deduction of 50% made by the MACT and the High Court towards contributory negligence.

10 In light of the aforesaid discussion, the Claimants are awarded compensation as follows :

i) Income : Rs. 3,87,192 p.a.

ii) Deduction towards

Personal Expenses : 50%

iii) Future Prospects : 30%

iv) Multiplicand : Rs. 2,51,675 (3,87,192-50%+30%)

v) Multiplier : 15

vi) Loss of Dependency : Rs. 37,75,125 (2,51,675 x 15)

vii) Funeral Expenses : Rs. 15,000

viii) Loss of Estate : Rs. 15,000

ix) Loss of Spousal Consortium : Rs. 40,000

x) Loss of Parental Consortium to each of the 3 children : Rs. 1,20,000

xi) Total compensation : Rs. 39,65,125

xii) Deduction on account 50%

of contributory negligence :
Total compensation to be paid : Rs. 19,82,563

11 This Court vide Order dated 13.10.2014 had stayed the operation of the impugned judgment subject to the Appellant -
Insurance Company depositing a sum of Rs. 10 lacs before the Trial Court. The Claimants were granted liberty to withdraw
the same.

12 The Appellant - Insurance Company is directed to pay the balance amount of compensation within a period of twelve
weeks from the date of this judgment.

13 The deceased Satpal Singh had died on 18.11.1998. His dependants have been pursuing legal proceedings for grant of
compensation since the past 22 years. As a consequence, we deem it appropriate to direct that Interest @12% p.a. be paid on
the total compensation awarded, from the date of filing the claim petition, till realization.

14 The Claimant No. 1 i.e. widow of the deceased has suffered permanent disability of 25% in this accident. She has single-
handedly raised her three minor children, and eked out her livelihood through agricultural 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 the balance 50% be divided equally between the three children.
15 The Civil Appeals are disposed of in the aforesaid terms.
 27

2021 (0) AIJEL-SC 67338

SUPREME COURT OF INDIA

Hon'ble Judges:N.V.Ramana, Surya Kant and Aniruddha Bose JJ.

Rahul Sharma Versus National Insurance Company Ltd.

CIVIL APPEAL No. 1769 of 2021 ; *J.Date :- MAY 07, 2021

MOTOR VEHICLES ACT, 1988 Section - 140 , 166

Motor Vehicles Act, 1988 - S. 140, 166 - motor accident - grant of compensation for death -
deceased was self-employed and was 37 years old, earning Rs. 2,55,349 p.a - warranting
addition of 40% towards future prospects - 1/3rd of income deducted towards personal and
living expenses - after deducting personal and living expenses and adding future prospects,
annual income determined at Rs. 2,38,326 p.a. - multiplier of 15 is appropriate, considering
age of deceased - claimant is entitled to total compensation of Rs. 38,24,890 payable with
interest of 9% p.a from date of ling of claim petition till realisation - appeal disposed of.

Imp.Para: [ 10 ] [ 11 ]

Cases Relied on :

1. National Insurance Co.Ltd.Vs.Pranay Sethi, 2017 16 SCC 680 : 2017 AIR SC 5157 : 2017
(13) Scale 12 : JT 2017 (10) 450 : 2017 (8) Supreme 107
2. Sarla Verma Vs. Delhi Transport Corporation, 2009 6 SCC 121 : 2009 AIR SC 3104 :
2009 (6) Scale 129 : JT 2009 (6) 495 : 2009 (5) SCR 1098

Equivalent Citation(s):
2021 (6) SCC 18 : AIR 2021 SC 2255

JUDGMENT :-

N.V.RAMANA, J.

1 Leave granted.

2 The appellants before us seek to impugn the judgment dated 4th September, 2017, passed
by the Delhi High Court in MAC. App. No. 740/2016.

3 The brief facts, necessary for the adjudication of this appeal are as follows: on the
intervening night of the 18th/19th May, 2010, the vehicle in which parents of the Appellants
were NonReportable travelling rammed into a truck, near Phagwara, Punjab. Resultantly, they
succumbed to the injuries sustained in the accident. The car was plying other relatives of the
Appellants
and the deceased. Thereafter, F.I.R. no. 76/10, was registered
in PS Sadar
Phagwara, Punjab under Sections 249, 304A,
427 of the Indian Penal Code, 1860 in this
regard. It may be
relevant to note that the vehicle was, during the relevant
period, insured by
the National Insurance Co. Ltd.
(hereinafter, referred to as NIC), the Respondent No. 1 herein.

4 The Appellants instituted a claim petition before the

Motor Accidents Claims Tribunal
(hereinafter, the MACT ),
under Sections 166 and 140 of the Motor Vehicles Act, 1988 ,
for
grant of compensation for the death of their parents, which
were registered as cases
numbered, MACT No. 349/2010 (with
respect to Mrs. Manisha Sharma) and MACT No.
350/2010
(with respect to Mr. Sunil Sharma), and were adjudicated vide
a common award
dated 7th June, 2016.

5 The present appeal pertains to the claim petition

preferred on the account of the death of
the appellants mother.
The appellants mother, Mrs. Manisha Sharma, was aged
about 37
years and was a selfemployed
individual.

6 The Tribunal, while adjudicating the claim, determined

the compensation to be Rs.
41,55,235. The Tribunal relied
upon the Income Tax Return of the deceased and concluded
that her annual income was Rs. 2,55,349. Based on the
dictum of this Court in Sarla Verma
v. Delhi Transport
Corporation, (2009) 6 SCC 121, 50% addition was included
towards future
prospects and the multiplier was taken to be
15. Since, the deceased had two dependents,
1/3rd of the
deceased s income was deducted on account of personal and
living expenses.
The nonpecuniary
compensation was
calculated at Rs. 3,25,000. The NIC, being the insurer
of the
vehicle, was held liable to pay the compensation of Rs.
41,55,235 with an interest of
9% per annum from the date of
filing of the claim petition.

7 Aggrieved, the insurance company preferred an appeal

against the award of the MACT
before the Delhi High Court,
which disposed of the appeal vide the impugned judgment
dated 4th September, 2017. The High Court, in its common
judgement, calculated the
pecuniary compensation as Rs.
19,16,000 and the nonpecuniary
damages was calculated as
Rs.2,50,000, for a total compensation of Rs. 21,66,000/,
in
MAC. APP. 740/2016. While
passing the aforesaid impugned
order, the High Court deducted 50% of income towards
personal and living expenses. The High Court however, held
the deceased ineligible for the
grant of future prospects as she
was selfemployed.

8 Aggrieved by the impugned judgement, the Appellants

have preferred the present appeal,
by way of Special Leave,
impugning only the compensation as modified in MAC. App.
No.
740/2016.

9 We have heard the counsel for the Appellants and the

counsel for the NIC, Respondent No.
1. The Respondents No. 2
and 3 have not tendered their appearances, despite service.
The
insurance company has also placed on record their
written submissions, which have been
perused.

10 This Court in a Five Judge Bench decision in National

Insurance Co. Ltd. v. Pranay Sethi,
(2017) 16 SCC 680,
clearly held that in case the deceased is selfemployed
and
below the
age of 40, 40% addition would be made to their
income as future prospects. In the present
case, the deceased
was selfemployed
and was 37 years old, therefore, warranting
the
addition of 40% towards future prospects. Moreover,
Pranay Sethi (supra), affirming the ratio
in Sarla Verma
(supra), held that the deduction towards personal and living
expenses for a
person such as the deceased who was married
with two dependents, to be onethird
(1/3rd).
Since the High
Court in the impugned judgment deducted 50% the same
merits interference
by this Court.
11 Therefore, in light of the above, the compensation as
awarded to the Appellants by the
High Court is modified to the
extent of deduction towards personal and living expenses
(determined to be onethird
(1/3rd)) and 40% addition towards
future prospects. The annual
income of the deceased (Mrs.
Manisha Sharma) was Rs. 2,55,349. After deducting personal
and living expenses and adding future prospects, the annual
income is determined at Rs.
2,38,326/.
The multiplier of 15 is
appropriate, considering the age of the deceased.
Accordingly,
the total loss of dependency, is calculated to be
Rs. 35,74,890/.
We do not find
any reason to interfere with
any other heads as determined by the High Court.

12 Hence, the total compensation is determined to be,

Rs. 38,24,890/payable
with interest of
9% per annum from
the date of filing of the claim petition till realisation, set off
against the
part compensation already received, if any.

13 This Civil Appeal is disposed of in the aforesaid terms.

 28
2019 (0) AIJEL-SC 65498

SUPREME COURT OF INDIA

(DELHI HIGH COURT)

Hon'ble Judges:S.Abdul Nazeer and Sanjiv Khanna JJ.

Kunjan Sadana Versus Mahesh Kumar

CIVIL APPEAL No. 9312 of 2019 ; *J.Date :- DECEMBER 10, 2019

MOTOR VEHICLES ACT, 1988 Section - 166 , 168 , 173

Motor Vehicles Act, 1988 - S. 166, 168, 173 - motor accident - death compensation - future prospects - appropriate
multiplier - High Court applied multiplier at 15, as it took age of mother into consideration, and not that of deceased
- justification - held, age of deceased which has to be taken into account and not age of dependents - deceased was
aged 19 years, an additional 40% of established income must be added while computation of compensation - in
addition, 50% of said amount has to be deducted in lieu of his personal expenses, that he would have incurred to
maintain himself as a bachelor, had he been alive - even if deceased is a bachelor, his age has to be taken into account
to adopt a multiplier - however, High Court has rightly determined monthly salary of deceased at Rs. 3,918 - in
addition, 40% of actual salary income of deceased has to be added towards future prospects of deceased, as his age
was less than 40 years - therefore, gross income of deceased must be calculated to Rs. 5,485 - 50% of said amount has
to be deducted in lieu of his personal expenses he being bachelor which comes to Rs. 2,743 - thus, compensation
payable to claimants towards loss of dependency is Rs. 5,92,488 (Rs.2,743 x 12 x 18 = Rs. 5,92,488) - in addition,
claimants are also entitled for a sum of Rs. 70,000 under conventional heads - total compensation payable to
claimants comes to Rs. 6,62,448 - amount of Rs. 5,02,620 awarded by High Court, has to be deducted from said
amount, therefore, balance compensation payable to claimants comes to Rs. 1,59,868, which is rounded off to Rs.
1,60,000 - third respondent/insurance company directed to deposit a sum of Rs. 1,60,000 with simple interest at rate
of 7% per annum from the date of claim petition till date of deposit - appeal partly allowed.

Imp.Para: [ 9 ] [ 10 ] [ 12 ] [ 14 ]

Cases Relied on :

1. National Insurance Company Limited V. Pranay Sethi, 2017 16 SCC 680 : 2017 AIR SC 5157 : 2017 (13) Scale 12 :
JT 2017 (10) 450 : 2017 (8) Supreme 107
2. Royal Sundaram Alliance Insurance Company Limited V. Mandala Yadagari Goud, 2019 5 SCC 554 : 2019 AIR SC
1825 : 2019 (6) Scale 82 : JT 2019 (4) 547 : 2019 (4) Supreme 254

Equivalent Citation(s):
2020 (12) SCC 645 : 2019 (17) Scale 657

JUDGMENT :-

S.ABDUL NAZEER, J.

1 Delay condoned.

2 Leave granted.

3 The instant appeal has been filed by the claimants challenging the judgment and order dated 08.08.2017 of the High Court
of Delhi, in MAC Appeal No.479 of 2009 wherein the High Court has partly allowed the appeal and consequently enhanced
the amount of compensation from Rs 3,72,620/- to Rs 5,02,620/-. The appellants have filed this appeal, seeking further
enhancement of the compensation.

4 The appellants are the widowed mother and the younger brother (a minor) of the deceased. The deceased namely, Shri
Yitesh Sadana alias Prince, a bachelor, aged 19 years, succumbed to injuries that he sustained in a motor vehicle accident
that occurred on 18.04.2007, which was caused due to the negligence of the driver of a bus, bearing registration No DL-1PA-
4403. It is admitted that 1the offending vehicle was insured with New India Assurance Co Ltd, the third respondent herein,
for third party risk. As mentioned above, the claim petition was allowed in part, by the Tribunal by Award dated 06.06.2009.
Thereafter, the appeal filed by the appellants was partly allowed by the High Court.

5 It is contended by the learned counsel for the appellants that the deceased was aged 19 years, therefore, the multiplier
applicable for this age group is 18 . However, the Tribunal and the High Court have adopted the multiplier 15 , on the basis
of the age of the mother of the deceased. In addition, it is also submitted that the High Court failed to consider the future
prospects, while awarding the compensation. The learned counsel appearing for the insurer has sought to justify the
impugned judgment and order herein.

6 Summary of the compensation awarded by the Tribunal: -

Sl Details Amount
No. Rs.

1 Loss of Dependency 3,52,620.00

2 Funeral Expenses 5,000.00

3 Loss of Estate, Love & Affection 15,000.00

TOTAL 3,72,620.00

7 While calculating the loss of dependency at Rs. 3,52,620/-, the Tribunal considered the income of the deceased at Rs.
3,918/- per month. The age of the mother i.e. 42 years was considered, in order to apply the multiplier 15 . In addition, as the
deceased was a bachelor, the Tribunal has reduced 50% of his salary in lieu of his personal expenses. The High Court had
enhanced the award to Rs. 5,02,610/-.

8 The High Court while enhancing the compensation, did not consider the future prospects of the deceased. The material on
record makes it evident that the deceased was self-employed. The Constitution Bench of this Court in National Insurance
Company Limited v. Pranay Sethi and Others, (2017) 16 SCC 680, has considered the issue in relation to future prospects,
while granting the compensation. It was held as under:-

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 warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased
was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be
regarded as the necessary method of computation. The established income means the income minus the tax
component. (emphasis supplied)

9 In the instant case, as the deceased was aged 19 years, an additional 40% of the established income must be added while
computation of the compensation. In addition, 50% of the said amount has to be deducted in lieu of his personal expenses,
that he would have incurred to maintain himself as a bachelor, had he been alive.

10 Further, the High Court applied the multiplier at 15 , as it took the age of the mother into consideration, and not that of
the deceased. A three-Judge Bench of this Court, in Royal Sundaram Alliance Insurance Company Limited v. Mandala
Yadagari Goud and Others, (2019) 5 SCC 554, held that even if the deceased is a bachelor, his age has to be taken into
account to adopt a multiplier. The question for consideration in this case was as under:

The only legal issue canvassed before us in these matters, which are in the nature of cross-appeals, is that in the case
of a motor accident where there is death of a person, who is a bachelor, whether the age of the deceased or the age of
the dependents would be taken into account for calculating the multiplier.

This question was answered in the following terms:

12. We are convinced that there is no need to once again take up this issue settled by the aforesaid judgments of
three-Judge Benches and also relying upon the Constitution Bench that it is the age of the deceased which has to be
taken into account and not the age of the dependents.

11 The Constitution Bench in Pranay Sethi (supra) has also awarded compensation under the conventional heads as under: -

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

12 We are of the view that the High Court has rightly determined monthly salary of the deceased at Rs. 3,918. In addition,
40% of the actual salary income of the deceased has to be added towards the future prospects of the deceased, as his age was
less than 40 years. Therefore, the gross income of the deceased must be calculated as:

a. Before Deducting the personal living expenses:

Rs. 3,918 + (40% of the monthly income i.e Rs. 1567/-) = Rs. 5,485/-

Since the deceased was a bachelor, 50% of his gross income must be deducted towards personal living expenses
which must be calculated as:

b. Rs.5,485 (50% of 5485) = Rs. 2,743/-

Thus, the compensation payable to the claimants towards loss of dependency is Rs. 5,92,488/-(Rs.2,743 x 12 x 18 =
Rs. 5,92,488/-). In addition, the claimants are also entitled for a sum of Rs.70,000/- under the conventional heads.
Thus, the total compensation payable to the claimants comes to Rs. 6,62,448/-.

13 The amount of Rs. 5,02,620/- awarded by the High Court, has to be deducted from the aforesaid amount, therefore, the
balance compensation payable to the claimants comes to Rs. 1,59,868/-, which is rounded off to Rs. 1,60,000/-.

14 As a result, the appeal succeeds and is partly allowed. The third respondent/insurance company is directed to deposit a
sum of Rs. 1,60,000/- with simple interest at the rate of 7% per annum from the date of the claim petition till the date of
deposit. The respondent/insurance company is further directed to deposit the aforesaid amount before the Tribunal within a
period of two months from the date of receipt of the copy of this judgment. The first appellant is permitted to withdraw the
said amount.

15 There will be no orders as to costs.

 29

2019 (0) AIJEL-SC 64609

SUPREME COURT OF INDIA

(HIMACHAL PRADESH HIGH COURT)

Hon'ble Judges:Indu Malhotra and Sanjiv Khanna JJ.

Joginder Singh Versus Icici Lombard General Insurance Company

CIVIL APPEAL No. 6291 of 2019 ; *J.Date :- AUGUST 14, 2019

MOTOR VEHICLES ACT, 1988 Section - 166

Motor Vehicles Act, 1988 - S. 166 - motor accident claim - compensation - deceased was a
bachelor girl aged 20 years and was undertaking an Air Hostess Training Program - criteria
for applying multiplier - held, multiplier in case of bachelor who has died in accident should
be computed on the basis of age of deceased and not the age of parents - compensation
required to be worked out after awarding 40% towards future prospects - lumpsum amount
awarded towards consortium - award modi ed accordingly - appeal disposed of.

Imp.Para: [ 4 ]

Cases Referred To :

1. New India Assurance Co. Ltd. V. Shanti Pathak & Ors., 2007 10 SCC 1 : 2007 AIR SC
2649 : 2007 (9) Scale 216 : JT 2007 (9) 318 : 2007 (8) SCR 237
2. Reshma Kumari And Ors. V. Madan Mohan And Anr., 2013 9 SCC 65 : 2013 AIR
SC(Supp) 474 : 2013 (5) Scale 160 : JT 2013 (4) 362 : 2013 (2) SCR 706

Cases Relied on :

1. Magma General Insurance Co. Ltd. V. Nanu Ram & Ors., 2018 18 SCC 130 : 2018 (11)
Scale 247 : JT 2018 (9) 195 : 2019 (1) Supreme 262 : 2019 (3) SCC(Cri) 153
2. National Insurance Co. Ltd. V. Pranay Sethi & Ors., 2017 16 SCC 680 : 2017 AIR SC
5157 : 2017 (13) Scale 12 : JT 2017 (10) 450 : 2017 (8) Supreme 107
3. Royal Sundaram Alliance Insurance Co. Ltd. V. Mandala Yadagari Goud & Ors., 2019 5
SCC 554 : 2019 AIR SC 1825 : 2019 (6) Scale 82 : JT 2019 (4) 547 : 2019 (4) Supreme
254
4. Sarla Verma & Ors. V. Delhi Transport Corporation & Anr., 2009 6 SCC 121 : 2009 AIR SC
3104 : 2009 (6) Scale 129 : JT 2009 (6) 495 : 2009 (5) SCR 1098

Equivalent Citation(s):
AIR 2019 SC 3814 : 2019 (10) Scale 746
JUDGMENT :-

INDU MALHOTRA, J.

1 The present Civil Appeal has been filed to challenge the final
Judgment and Order dated
22.05.2015 passed by the High
Court of Himachal Pradesh at Shimla in FAO (MVA) No. 386
of 2014.

The Appellants herein have filed the present Civil Appeal

for enhancement of the
compensation granted by the Motor
Accident Claims Tribunal, Shimla ( MACT ) and the
High Court.

2 The factual matrix in which the present Civil Appeal arises is

briefly stated as under :

2.1. The daughter of the Appellants viz. Ambika Thakur

was a student who was
undertaking an Air Hostess
Training Program at the Frankfinn Institute, Chandigarh.

2.2. On 10.9.2009, Ambika Thakur was travelling in a

Verna car bearing Registration
No. CH-04-H-0297 from
Chandigarh to Bhatinda.

The car met with an accident with a Tata Ace vehicle

bearing Registration No. PB-03T-
4804 which was being
driven in a rash and negligent manner. The offending
vehicle
suddenly stopped in front of the Verna car,
which led to head long collision between the
two
vehicles, and resulted in the death of Ambika Thakur
on the spot. Ambika Thakur
was 20 years old at the
time of her death.

The offending vehicle was insured with the

Respondent Insurance Company.

2.3. The Appellants herein being the parents of the

deceased, filed a Claim Petition
before the MACT,
Shimla claiming compensation of Rs. 25,00,000/- on
the death of
their daughter.

2.4. The MACT vide Award dated 15.07.2014 granted

compensation of Rs. 10,40,000/-
to the Appellant Claimants along with interest @7.5% p.a.

The compensation was awarded under the following

heads :

(i) The notional income of the deceased was taken as

Rs. 15,000/- p.m.;

(ii) A deduction of 50% was made from the notional

income of the deceased, since she
was unmarried;

(iii) The MACT applied the Multiplier of 11 on the

basis of the age of the mother of the
deceased;

(iv) An amount of Rs. 25,000/- was awarded towards

loss of love and affection;

(v) An amount of Rs. 25,000/- was awarded towards

funeral expenses.

2.5. Aggrieved by the aforesaid Award, the Appellants filed

FAO (MVA) No. 386 of 2014
before the High Court of
Himachal Pradesh at Shimla for enhancement of
compensation.
 The High Court vide impugned Judgment dated
22.05.2015 dismissed the Appeal, and
upheld the
amount of compensation awarded by the MACT.

3 Aggrieved by the aforesaid Judgment, the Appellant Claimants have filed the present Civil
Appeal.

We have heard the learned Counsel for the Appellants and

the Respondent Insurance
Company.

3.1. The Counsel for the Appellants submitted that the

MACT and the High Court
applied the wrong Multiplier
of 11 by erroneously taking into consideration the age
of
the mother of the deceased, instead of the age of the
deceased.

It was submitted that as per the decision in Sarla

Verma & Ors. v. Delhi Transport
Corporation & Anr., 2009 6 SCC 121
the Multiplier of 18 ought to have been applied for
the
deceased who was 20 years old at the time of the
accident.

3.2. It was further submitted that the Courts below failed to

award compensation
towards Future Prospects and
loss of estate.

3.3. The Counsel for the Insurance Company submitted

that the Courts below were
justified in applying the
Multiplier of 11 which should be as per the age of the
mother of
the deceased, and not the age of the
deceased. Reliance was placed on this Court s
decision
in New India Assurance Co. Ltd. v. Shanti Pathak &
Ors., 2007 10 SCC 1

4 We have perused the judgments of the Courts below, and

find that the wrong Multiplier has
been applied to the facts of
the present case.

The issue with respect to whether the Multiplier to be

applied in the case of a bachelor,
should be computed on the
basis of the age of the deceased, or the age of the parents,
is
no longer res integra. This issue has been recently settled by
a three Judge bench of
this Court in Royal Sundaram
Alliance Insurance Co. Ltd. v. Mandala Yadagari Goud &
Ors., 2019 5 SCC 554 wherein it has been held that the Multiplier has to be
applied on
the basis on the age of the deceased. The Court
held that :

10. A reading of the judgment in Sube Singh

(supra) shows that where a three Judge
Bench
has categorically taken the view that it is the
age of the deceased and not the
age of the
parents that would be the factor for the purposes
of taking the multiplier to
be applied. This
judgment undoubtedly relied upon the case of
Munna Lal Jain (supra)
which is also a three
Judge Bench judgment in this behalf. The
relevant portion of the
judgment has also been
extracted. Once again the extracted portion in
turn refers to
the judgment of a three Judge
Bench in Reshma Kumari and Ors. v. Madan
Mohan and
Anr. (2013) 9 SCC 65. The relevant
portion of Reshma Kumari in turn has referred to
Sarla Verma (supra) case and given its
imprimatur to the same. The loss of
dependency
is thus stated to be based on: (i)
additions/deductions to be made for
arriving at
the income; (ii) the deductions to be made
towards the personal living
expenses of the
deceased; and (iii) the multiplier to be applied
with reference to the
age of the deceased. It is
the third aspect which is of significance and
Reshma Kumari
categorically states that it does
not want to revisit the law settled in Sarla
Verma case
in this behalf.

11. Not only this, the subsequent judgment of

the Constitution bench in Pranay Sethi
(supra) has also been referred to in Sube
Singh for the purpose of calculation of the
multiplier.
 12. We are convinced that there is no need
to once again take up this issue settled by
the aforesaid judgments of three Judge
Bench and also relying upon the
Constitution
Bench that it is the age of the
deceased which has to be taken into
account and not the
age of the dependents. (emphasis supplied)

In the present case, since the deceased was 20 years old, a

Multiplier of 18 ought to have
been applied as per the
decision of this Court in Sarla Verma (supra).

4.1. We further find that the Courts below have failed to

award Future Prospects @40%
of the income of the
deceased, as mandated by the judgment of the
Constitution
Bench in National Insurance Co. Ltd. v.
Pranay Sethi & Ors., 2017 16 SCC 680 We direct
that the compensation be re-worked after
awarding 40% towards Future Prospects.

4.2. Furthermore, the Courts below have failed to award

loss of estate @Rs.15,000/- as
per the judgment in
Pranay Sethi (supra).

4.3. The Courts below have awarded a lump sum amount of

Rs. 25,000/- towards loss
of love and affection.

This Court in Magma General Insurance Co. Ltd. v.

Nanu Ram & Ors., 2018 18 SCC 130.
has held that a sum of Rs. 40,000/- is to be paid to each of the parents towards loss of
consortium on the death of a child. Therefore, the
Appellants are entitled to be
awarded Rs. 40,000/- each towards loss of consortium.

4.4. The funeral expenses and interest awarded by the

MACT are maintained.

5 In light of the aforesaid discussion, the compensation

awarded to the Appellants is being
enhanced as follows :

i) Income : Rs.
 15,000/-
   

ii) Future Prospects : Rs.

 6,000/- (i.e. 40% of the income)
   

iii) Deduction towards personal expenses 50%

:  
 

iv) Total income : Rs.

 10,500/- (i.e. 50% of 15,000 + 6,000)
   

v) Multiplier : 18
   

vi) Loss of future income : Rs.

 22,68,000/- (i.e. 10,500 x 12 x 18)
   

vii) Enhanced amount : Rs.

 12,78,000/- (i.e. 22,68,000 9,90,000)
   

viii) Loss of Consortium to each of the Rs.

 55,000/- (i.e. after deducting 25,000
Appellants : awarded by the MACT from 40,000 each =
  80,000)
 

ix) Loss of Estate : Rs.

 15,000/-
   

Total enhancement : Rs. 13,48,000/-

 

6 The Respondent Insurance Company is directed to pay the

enhanced amount of
compensation of Rs. 13,48,000/- to the
Appellants within 1 month from the date of this
judgment.

The enhanced amount shall carry Simple Interest @7.5%

p.a. from the date of filing of
the Claim Petition till the date of
realization.

The Civil Appeal is allowed in the aforesaid terms. All

pending Applications, if any, are
accordingly disposed of.
Ordered accordingly.
 30

2018 (0) AIJEL-SC 62596

SUPREME COURT OF INDIA

(KARNATAKA HIGH COURT)

Hon'ble Judges:Dipak Misra, A.M.Khanwilkar and D.Y.Chandrachud JJ.

Shivaji Versus Divisional Manager, United India Insurance Co.Ltd.

CIVIL APPEAL No. 2816 of 2018 ; *J.Date :- AUGUST 9, 2018

MOTOR VEHICLES ACT, 1988 Section - 163A , 166

Motor Vehicles Act, 1988 - S. 163A, 166 - motor accident - death of driver - liability of
insurance company to pay compensation - High Court held that deceased driver who was
responsible for the accident, was not entitled to compensation - whether insurance company
can raise defence of negligence in a proceeding u/s. 163A of the act - held, no - grant of
compensation u/s. 163A of the Act on the basis of the structured formula is in the nature of
a nal award - present case is covered by a recent judgment of three judges of this Court in
United India Insurance Co. Ltd. v. Sunil Kumar - if an insurer was permitted to raise a defence
of negligence u/S. 163A of the Act, it would "bring a proceeding u/s. 163A of the Act at par
with the proceeding u/S. 166 of the Act which would not only be self contradictory but also
defeat the very legislative intention" - consequently, in a proceeding u/S. 163A of the Act,
insurer cannot raise any defence of negligence on the part of the victim to counter a claim
for compensation - impugned order of High Court set aside - order of Tribunal restored -
appeal allowed.

Imp.Para: [ 5 ]

Cases Referred To :

1. United India Insurance Co. Ltd. V. Sunil Kumar & Anr., AIR 2017 SC 5710 : 2019 (12)
SCC 398 : 2017 (13) Scale 652 : JT 2018 (1) 193 : 2017 (8) Supreme 299

Equivalent Citation(s):
2019 (12) SCC 395 : AIR 2018 SC 3705

JUDGMENT :-

D.Y.CHANDRACHUD, J.

1 The present appeal arises from a judgment of a learned Single Judge of the Karnataka
High Court in an appeal against an award of the Motor Accident Claims Tribunal (MACT),
Belgaum.
2 The appellants are parents of Shaji Shivaji Dudhade, who was the driver
of a car bearing
Registration No. MH-06/W-604, which met with an accident on
15 June 2010. The accident
occurred when the car dashed into a truck, bearing
Registration No. KA-25/B-5363, resulting
in his death; the death of two other
persons and injuries to two more persons, all of whom
were travelling in the car.

3 The appellants filed a claim petition seeking compensation under Section

163A of the
Motor Vehicles Act, 1988 . The Tribunal noted that since the claim
petition had been filed
under Section 163A of the Act, the question of proving
that the accident happened due to
the rash and negligent act of the driver did
not arise. By its award dated 30 July 2011, the
Tribunal allowed a claim of Rs
4,60,800 together with interest at the rate 9% per annum.

4 The insurer preferred an appeal before the High Court of Karnataka. The
appellants also
filed an appeal before the High Court seeking enhancement of
compensation awarded by
the Tribunal. The High Court, by its impugned
judgment, allowed the insurer s appeal and set
aside the order of the Tribunal.
The High Court opined that the idea behind enacting Section
163A is to ensure
that even in the absence of any mistake on the part of the driver of the
offending
vehicle, the injured person or the legal heirs of the deceased person are
compensated by the owner and the insurer. As a result, under this provision,
since the victim
has been contemplated to be an innocent third party, protection
is extended only to the
injured person or to the legal heirs of the deceased
victim, and not to the driver who is
responsible for causing the said accident.
Since the deceased driver in this case was the
tortfeasor and responsible for
causing the accident, the High Court held that compensation
could not have
been awarded to the appellants.

5 The issue which arises before us is no longer res integra and is covered
by a recent
judgment of three judges of this Court in United India Insurance
Co. Ltd. v. Sunil Kumar &
Anr., AIR 2017 SC 5710.,wherein it was held that to permit a defence
of negligence of the
claimant by the insurer and/or to understand Section 163A
of the Act as contemplating such
a situation, would be inconsistent with the
legislative object behind introduction of this
provision, which is final
compensation within a limited time frame on the basis of the
structured formula
to overcome situations where the claims of compensation on the basis
of fault
liability was taking an unduly long time . The Court observed that if an insurer
was
permitted to raise a defence of negligence under Section 163A of the Act,
it would bring a
proceeding under Section 163A of the Act at par with the
proceeding under Section 166 of
the Act which would not only be self contradictory
but also defeat the very legislative
intention . Consequently, it was
held that in a proceeding under Section 163A of the Act, the
insurer cannot raise
any defence of negligence on the part of the victim to counter a claim
for
compensation.

6 Having regard to the above position, the Civil Appeal will have to be
allowed.

7 Accordingly, the appeal is allowed. The impugned judgment of the High

Court absolving
the insurer is set aside and the order of the Tribunal is restored.
There shall be no order as to
costs.
 31

2017 (0) AIJEL-SC 61480

SUPREME COURT OF INDIA

Hon'ble Judges:Ranjan Gogoi, Adarsh Kumar Goel and Navin Sinha JJ.

United India Insurance Company Limited Versus Sunil Kumar

Civil Appeal No. 9694 of 2013 ; *J.Date :- NOVEMBER 24, 2017

MOTOR VEHICLES ACT, 1988 Section - 163A

Motor Vehicles Act, 1988 - S. 163A - motor accident - negligence on the part of victim - compensation on structured
formula basis - whether in a claim proceeding u/s. 163A of Motor Vehicles Act it is open for Insurer to raise
defence/plea of negligence - held, no - grant of compensation u/s. 163A of the Act on the basis of the structured
formula is in the nature of a final award and the adjudication thereunder is required to be made without any
requirement of any proof of negligence of the driver/owner of the vehicle(s) involved in the accident - it is not open
for Insurer to raise any defence of negligence on part of victim - appeal disposed of.

Imp.Para: [ 9 ]

Cases Referred To :

1. Deepal Girishbhai Soni V. United India Insurance Co. Ltd., Baroda, 2004 5 SCC 385 : 2004 AIR SC 2107 : 2004 (3)
Scale 546 : JT 2004 (4) 83 : 2004 (3) SCR 213
2. National Insurance Company Limited V. Sinitha, 2012 2 SCC 356 : 2012 AIR SC 797 : 2011 (13) Scale 84 : 2011
(16) SCR 166 : 2012 AIR SCW 10
3. Oriental Insurance Co. Ltd. V. Hansrajbhai V. Kodala, 2001 5 SCC 175 : 2001 AIR SC 1832 : 2001 (3) Scale 223 :
JT 2001 (4) 477 : 2001 (2) SCR 999
4. United India Insurance Company Limited V. Shila Datta, 2011 10 SCC 509 : 2012 AIR SC 86 : 2011 (12) Scale 5 :
JT 2011 (12) 233 : 2011 (14) SCR 763

Cited in :

1. (Referred To) :- Shivaji Vs. Divisional Manager, United India Insurance Co.Ltd., AIR 2018 SC 3705 : 2018 (9) Scale
463 : JT 2018 (7) SC 516 : 2018 (189) AIC 126 : 2018 (72) OrissaCriR 144 : 2018 (3) LawHerald(SC) 2232 : 2018
(3) LawHerald(SC) 1985 : 2018 DNJ(SC) 962 : 2018 (3) RajLW 2637 : 2018 (5) ALD(SC) 135 : 2018 (3) JBCJ(SC)
402 : 2018 (3) ACC 907 : 2018 ACJ 2161 : 2018 (3) TAC 673 : 2018 (2) TNMAC 149 : 2018 JX(SC) 509 : 2018
AIJEL_SC 62596
2. (Referred To) :- Union Of India Vs. Rina Devi, AIR 2018 SC 2362 : 2018 (7) Scale 274 : 2018 (5) Supreme 418 :
2018 (4) AWC 3776 : 2018 (3) RCR(Civ) 40 : 2018 (71) OrissaCriR 10 : 2018 (2) PLJR(SC) 447 : 2018 (2)
LawHerald(SC) 515 : 2018 (2) LawHerald(SC) 1625 : 2018 (3) JCR(SC) 241 : 2018 DNJ(SC) 734 : 2018 (2) KerLT
1060 : 2018 (3) BCR 729 : 2018 (4) ALT(SC) 28 : 2018 AllSCR 1750 : 2018 (2) JBCJ(SC) 478 : AIRBomHCR
2018 217 : 2018 (2) PCCR(SC) 124 : 2018 (2) ACC 591 : 2018 ACJ 1441 : 2018 (3) TAC 26 : 2018 AAC 991 : 2018
(2) HLT 28 : 2018 JX(SC) 378 : 2018 AIJEL_SC 62265

Equivalent Citation(s):
2019 (12) SCC 398 : AIR 2017 SC 5710

JUDGMENT :-

Ranjan Gogoi, J.
1 Unable to agree with the reasoning and the conclusion of a two judge bench of this Court in National Insurance Company
Limited v. Sinitha and others, [(2012) 2 SCC 356] a coordinate bench of this Court by order dated 29th October, 2013 has
referred the instant matter for a resolution of what appears to be the following question of law.

"Whether in a claim proceeding under Section 163 A of the Motor Vehicles Act, 1988 (hereinafter referred to as "the
Act") it is open for the Insurer to raise the defence/plea of negligence?"

2 A second question as to what would be the true scope and meaning of the provisions contained in Section 170 of the Act
more specifically as set out in Queries (iii) to (v) in paragraph 10 of the report of United India Insurance Company Limited
v. Shila Datta and others, [(2011) 10 SCC 509], also arises. However, the aforesaid Question stands referred to a Larger
Bench in Shila Datta(supra) itself. We are told that answers to the questions referred are awaited. In view of the above, we
would be required to answer only the first question arising in the reference which has been set out herein above.

3 In Sinitha's case (supra), a two judge bench of this Court understood the scope of Section 163A of the Act to be enabling
an Insurer to raise the defence of negligence to counter a claim for compensation. The principal basis on which the
conclusion in Sinitha's case (supra) was reached and recorded is the absence of a provision similar to sub-section (4) of
Section 140 of the Act in Section 163A of the Act. Such absence has been understood by the Bench to be a manifestation of
a clear legislative intention that unlike in a proceeding under Section 140 of the Act where the defence of the Insurer based
on negligence is shut out, the same is not be the position in a proceeding under Section 163A of the Act.

4 We have considered the matter and have heard the learned counsels for the parties.

5 In Deepal Girishbhai Soni and others v. United India Insurance Co. Ltd., Baroda, [(2004) 5 SCC 385] the issue before a
three judge bench of this Court was with regard to the mutual exclusiveness of the provisions of Section 163A and Section
166 of the Act. While dealing with the said question, this Court had the occasion to go into the reasons and objects for the
incorporation of Section 140 and 163A of the Act which came in by subsequent amendments, details of which are being
noted separately herein below. The Bench also took the view that while Section 140 of the Act deals with cases of interim
compensation leaving it open for the claimant to agitate for final compensation by resort to the provisions of Section 166 of
the Act, Section 163A of the Act provides for award of final compensation on a structured formula following the provisions
of Second Schedule appended to the Act. Both Sections i.e. Sections 140 and 163A are based on the concept of 'no fault
liability' and have been enacted as measures of social security. It was further noted that in a proceeding under Section 163A
of the Act the Tribunal may be required to adjudicate upon various disputed questions like age, income, etc. unlike in a
proceeding under Section 140 of the Act.

6 Deepal Girishbhai Soni's case (supra), in fact, arose out of a reference made for a decision on the correctness of the view
expressed in Oriental Insurance Co. Ltd. v. Hansrajbhai V. Kodala and other, (2001) 5 SCC 175 that determination of
compensation in a proceeding under Section 163A of the Act is final and further proceedings under Section 166 of the Act is
barred. The opinion rendered in Hansrajbhai v. Kodala (supra) contains an elaborate recapitulation of the reasons behind the
enactment of Section 92A to 92E of the Old Act (i.e. Motor Vehicles Act, 1939) (corresponding to Sections 140 to 144 of the
present Act) introducing for the first time the concept of 'no fault liability' in departure from the usual common law principle
that a claimant should establish negligence on the part of the owner or driver of the motor vehicle before claiming any
compensation for death or permanent disablement caused on account of a motor vehicle accident. In the said report, there is
a reference to the deliberations of the Committee constituted to review the provisions of the Motor Vehicles Act, 1988 and
the suggestions of the Transport Development Council on the basis of which the draft Bill of 1994 was enacted, inter alia, to
provide for:

"(h) increase in the amount of compensation to the victims of hit-and-run cases;

(k) a new predetermined formula for payment of compensation to road accident victims on the basis of age/income,
which is more liberal and rational."

7 As observed in Hansrajbhai v. Kodala (supra) one of the suggestions made by the Transport Development Council was "to
provide adequate compensation to victims of road accidents without going into long drawn procedure." As a sequel to the
recommendations made by the Committee and the Council, Section 140 was enacted in the present Act in place of Section
92A to 92E of the Old Act. Compensation payable thereunder, as under the repealed provisions, continued to be on the basis
of no fault liability though at an enhanced rate which was further enhanced by subsequent amendments. Sections 140 and
141 of the present Act makes it clear that compensation payable thereunder does not foreclose the liability to pay or the right
to receive compensation under any other provision of the Act or any other law in force except compensation awarded under
Section 163A of the Act. Compensation under Section 140 of the Act was thus understood to be in the nature of an interim
payment pending the final award under Section 166 of the Act. Section 163-A, on the other hand, was introduced in the New
Act for the first time to remedy the situation where determination of final compensation on fault basis under Section 166 of
the Act was progressively getting protracted. The Legislative intent and purpose was to provide for payment of final
compensation to a class of claimants (whose income was below Rs. 40,000/- per annum) on the basis of a structured formula
without any reference to fault liability. In fact, in Hansrajbhai v. Kodala (supra) the bench had occasion to observe that:

"Compensation amount is paid without pleading or proof of fault, on the principle of social justice as a social
security measure because of ever-increasing motor vehicle accidents in a fast-moving society. Further, the law before
insertion of Section 163-A was giving limited benefit to the extent provided under Section 140 for no-fault liability
and determination of compensation amount on fault liability was taking a long time. That mischief is sought to be
remedied by introducing Section 163-A and the disease of delay is sought to be cured to a large extent by affording
benefit to the victims on structured-formula basis. Further, if the question of determining compensation on fault
liability is kept alive it would result in additional litigation and complications in case claimants fail to establish
liability of the owner of the defaulting vehicles."

8 From the above discussion, it is clear that grant of compensation under Section 163-A of the Act on the basis of the
structured formula is in the nature of a final award and the adjudication thereunder is required to be made without any
requirement of any proof of negligence of the driver/owner of the vehicle(s) involved in the accident. This is made explicit
by Section 163A(2). Though the aforesaid section of the Act does not specifically exclude a possible defence of the Insurer
based on the negligence of the claimant as contemplated by Section 140(4), to permit such defence to be introduced by the
Insurer and/or to understand the provisions of Section 163A of the Act to be contemplating any such situation would go
contrary to the very legislative object behind introduction of Section 163A of the Act, namely, final compensation within a
limited time frame on the basis of the structured formula to overcome situations where the claims of compensation on the
basis of fault liability was taking an unduly long time. In fact, to understand Section 163A of the Act to permit the Insurer to
raise the defence of negligence would be to bring a proceeding under Section 163A of the Act at par with the proceeding
under Section 166 of the Act which would not only be self-contradictory but also defeat the very legislative intention.

9 For the aforesaid reasons, we answer the question arising by holding that in a proceeding under Section 163A of the Act it
is not open for the Insurer to raise any defence of negligence on the part of the victim.

10 The appeal will now be listed before regular Bench for disposal on merits, after the opinion of the larger Bench on the
true scope and meaning of the provisions contained in Section 170 of the Motor Vehicles Act, 1939 is rendered.

11 As the final disposal of the appeal may take some time, we are of the view that 50% of the compensation that is presently
amount lying in deposit in the trial Court be released to the claimant(s) on due identification.
 32
2015 (0) AIJEL-SC 56606

SUPREME COURT OF INDIA

Hon'ble Judges:H.L.Dattu, S.A.Bobde and Arun Mishra JJ.

Khenyei Versus New India Assurance Company Limited

CIVIL APPEAL No. 4244 of 2015 ; *J.Date :- MAY 07, 2015

MOTOR VEHICLES ACT, 1988 Section - 149 , 168

Motor Vehicles Act, 1988 - S. 149, 168 - tort - liability of joint tort-feasors in case of composite negligence - Right of
claimant to recover from any of the joint tort feasors - whether it is open to a claimant to recover entire compensation
from one of the joint tort feasors, particularly when in accident caused by composite negligence of drivers of trailor-
truck and bus has been found to 2/3rd and 1/3rd extent respectively - held, on facts, joint tort-feasors are jointly and
severally liable and claimant can claim compensation from both of them or either of them - claimant may recover
compensation for either of them - Tribunal may apportion extent of their negligence where both tort-feasors are
joined as parties - when compensation is recovered from one of the tort-feasors, other can recover amount from other
- Tribunal cannot determine composite negligence by driver of the vehicles in absence of either of drivers joint tort-
feasors - judgment and order passed by High Court set aside - appeals allowed.

Imp.Para: [ 13 ] [ 18 ]

Cases Referred To :

1. Andhra Marine Exports (P) Ltd. & Anr. V/s. P.Radhakrishnan & Ors., AIR 1984 Mad 358
2. Andhra Pradesh State Road Transport Corpn. & Anr. V/s. K Hemlatha & Ors., 2008 6 SCC 767 : 2008 AIR SC 2851
: 2008 (8) Scale 604 : 2008 (8) SCR 1201 : 2008 AIR SCW 4712
3. Baker V/s. Willoughby, 1970 0 AC 467
4. Ganesh V/s. Syed Munned Ahamed & Ors., 1999 0 ILR(Kar) 403
5. Hiraben Bhaga & Ors. V/s. Gujarat State Road Transport Corporation, 1982 Supp ACJ 414
6. Karnataka State Road Transport Corporation, Bangalore And Etc. V/s. Arun Alias Aravind And Etc. Etc., AIR 2004
Kar 149
7. Machindranath Kernath Kasar V/s. D.S. Mylarappa & Ors., 2008 13 SCC 198 : 2008 AIR SC 2545 : 2008 (7) Scale
496 : 2008 (7) SCR 83 : 2008 AIR SCW 3546
8. Mortgage Express Ltd. V/s. Bowerman & Partners, 1996 2 AllER 836
9. Multiple Tortfeasors; G.N.E.R. V/s. Hart, 2003 0 EWHC 2450
10. Narain Devi & Ors. V/s. Swaran Singh & Ors., 1989 2 ACC 116
11. National Insurance Co. Ltd. V/s. Challa Bharathamma & Ors., 2004 8 SCC 517 : 2004 AIR SC 4882 : 2004 (8)
Scale 90 : 2004 (Supp4) SCR 587 : JT 2004 (7) 519
12. National Insurance Co. Ltd. V/s. P.A. Vergis & Ors., 1991 1 ACC 226
13. Oriental Insurance Co. Ltd. V/s. Nanjappan & Ors., 2004 13 SCC 224 : 2004 AIR SC 1630 : 2004 (2) Scale 451 :
2004 (2) SCR 365 : JT 2004 (2) 452
14. Palghat Coimbatore Transport Co. Ltd. V/s. Narayanan, 1939 0 ILR(Mad) 306
15. Pawan Kumar & Anr. V/s. Harkishan Dass Mohan Lal & Ors., 2014 3 SCC 590 : 2014 AIR SC(Supp) 1922 : 2014
(1) Scale 760 : 2014 (4) SCR 1 : JT 2014 (2) 381
16. Performance Cars Ltd. V/s. Abraham, 1962 1 QB 33
17. Smt. Kundan Bala Vora & Anr. V/s. State Of U.P., AIR 1983 All 409
18. Smt. Sushila Bhadoriya & Ors. V/s. M.P. State Road Transport Corpn. & Anr., 2005 1 MPLJ 372
19. T.O. Anthony V/s. Karvarnan & Ors., 2008 3 SCC 748 : 2008 AIR SC(Supp) 1646 : 2008 (3) Scale 174 : 2008 (2)
SCR 291 : JT 2008 (3) 297
 20. United India Fire & General Insurance Co. Ltd. V/s. U.E. Prasad & Ors., AIR 1985 Kar 160
21. United India Fire & Genl. Ins. Co. Ltd. V/s. Varghese & Ors., 1989 2 ACC 483

Cited in :

1. (Referred To) :- Jaya Biswal Vs. Branch Manager, Iffco Tokio General Insurance Company Limited, 2016 (11) SCC
201 : AIR 2016 SC 956 : 2016 (2) Scale 138 : JT 2016 (2) SC 7 : JT 2016 (2) SC 6 : 2016 (8) Supreme 661 : 2017
(1) SCC(Cri) 275 : 2016 (1) ApexCJ(SC) 703 : 2016 (1) RCR(Civ) 1003 : 2016 (148) FLR 875 : 2016 (1) SCT 587 :
2016 (2) AWC 1296 : 2016 (1) RecApexJ 658 : 2016 LabIC 1614 : 2016 (2) LLJ 132 : 2016 (2) PLJR(SC) 369 :
2016 (2) BBCJ(SC) 201 : 2016 (2) LawHerald(SC) 1354 : 2016 (1) LawHerald(SC) 659 : 2016 (2) JCR(SC) 37 :
2016 DNJ(SC) 438 : 2016 (1) CLR 656 : 2016 (2) JLJR(SC) 241 : 2016 (3) RajLW 1771 : 2016 (1) PLR 815 : 2016
(2) ALD(SC) 141 : 2016 (122) CutLT(SC) 123 : 2016 AllSCR 657 : 2016 (2) AndhWR 39 : 2016 (2) CalLJ(SC) 43 :
2016 (1) PLJ 664 : 2016 LabLR 295 : 2016 (1) ACC 601 : 2016 (2) JCC 1427 : 2016 ACJ 721 : 2016 (1) TAC 713 :
2016 (1) LAR 318 : 2016 (1) TNMAC 289 : 2016 (2) HimLR 929 : 2016 AAC 859 : 2016 JX(SC) 101 : 2016
AIJEL_SC 57828
2. (Referred To) :- Kamlesh Vs. Attar Singh, 2015 (15) SCC 364 : 2015 (12) Scale 49 : JT 2015 (9) SC 540 : 2015 AIR
SCW 6158 : 2016 (2) SCC(Cri) 691 : 2015 (156) AIC 201 : 2015 (3) ApexCJ(SC) 685 : 2016 (1) RCR(Civ) 24 :
2016 (1) AWC 313 : 2015 (5) RecApexJ 344 : 2015 (113) ALR 759 : 2016 (1) PLJR(SC) 187 : 2016 (1) JCR(SC)
131 : 2015 DNJ(SC) 1047 : 2016 (1) JLJR(SC) 36 : 2015 (6) ALD(SC) 164 : 2015 AllSCR 3566 : 2016 (1)
JBCJ(SC) 94 : 2015 (33) LCD 3174 : 2015 (4) ACC 672 : 2016 ACJ 1 : 2015 (4) TAC 611 : 2015 (3) MPWN 266 :
2015 (4) LAR 722 : 2015 (2) TNMAC 577 : 2015 AAC 3102 : 2015 JX(SC) 853 : 2015 AIJEL_SC 57229

Equivalent Citation(s):
2015 (9) SCC 273 : AIR 2015 SC 2261

JUDGMENT :-

ARUN MISHRA, J.

1 Leave granted.

2 In the appeals, the main question which arises for consideration is, whether it is open to a claimant to recover entire
compensation from one of the joint tort feasors, particularly when in accident caused by composite negligence of drivers of
trailor-truck and bus has been found to 2/3rd and 1/3rd extent respectively.

3 In the instant cases the injuries were sustained by the claimants when two vehicles - bus and trailor-truck collided with
each other. The New India Assurance Co. Ltd. is admittedly the insurer of the bus. However, on the basis of additional
evidence adduced the High Court has come to the conclusion that the New India Assurance Co. Ltd. is not the insurer of the
trailor-truck, hence is not liable to satisfy 2/3rd of the award.

4 It is a case of composite negligence where injuries have been caused to the claimants by combined wrongful act of joint
tort feasors. In a case of accident caused by negligence of joint tort feasors, all the persons who aid or counsel or direct or
join in committal of a wrongful act, are liable. In such case, the liability is always joint and several. The extent of negligence
of joint tort feasors in such a case is immaterial for satisfaction of the claim of the plaintiff/claimant and need not be
determined by the court. However, in case all the joint tort feasors are before the court, it may determine the extent of their
liability for the purpose of adjusting inter-se equities between them at appropriate stage. The liability of each and every joint
tort feasor vis a vis to plaintiff/claimant cannot be bifurcated as it is joint and several liability. In the case of composite
negligence, apportionment of compensation between tort feasors for making payment to the plaintiff is not permissible as the
plaintiff/claimant has the right to recover the entire amount from the easiest targets/solvent defendant.

5 In Law of Torts, 2nd Edn., 1992 by Justice G.P. Singh, it has been observed that in composite negligence, apportionment
of compensation between two tort feasors is not permissible.

6 In Law of Torts by Winfield and Jolowicz, 17th Edn., 2006, the author has referred to Performance Cars Ltd. V. Abraham
[1962 (1) QB 33], Baker V. Willoughby 1970 A.C. 467, Rogers on Unification of Tort Law: Multiple Tortfeasors; G.N.E.R.
V. Hart [2003] EWHC 2450 (QB), Mortgage Express Ltd. V. Bowerman & Partners 1996 (2) All E.R. 836 etc. and observed
thus :

"WHERE two or more people by their independent breaches of duty to the claimant cause him to suffer distinct
injuries, no special rules are required, for each tortfeasor is liable for the damage which he caused and only for that
 damage. Where, however, two or more breaches of duty by different persons cause the claimant to suffer a single,
indivisible injury the position is more complicated. The law in such a case is that the claimant is entitled to sue all or
any of them for the full amount of his loss, and each is said to be jointly and severally liable for it. If the claimant
sues defendant A but not B and C, it is open to A to seek "contribution" from B and C in respect of their relative
responsibility but this is a matter among A, B and C and does not affect the claimant. This means that special rules
are necessary to deal with the possibilities of successive actions in respect of that loss and of claims for contribution
or indemnity by one tortfeasor against the others. It may be greatly to the claimant s advantage to show that he has
suffered the same, indivisible harm at the hands of a number of defendants for he thereby avoids the risk, inherent in
cases where there are different injuries, of finding that one defendant is insolvent (or uninsured) and being unable to
execute judgment against him. Even where all participants are solvent, a system which enabled the claimant to sue
each one only for a proportionate part of the damage would require him to launch multiple proceedings, some of
which might involve complex issues of liability, causation and proof. As the law now stands, the claimant may
simply launch proceedings against the "easiest target". The same picture is not, of course, so attractive from the point
of view of the solvent defendant, who may end up carrying full responsibility for a loss in the causing of which he
played only a partial, even secondary role. Thus a solicitor may be liable in full for failing to point out to his client
that there is reason to believe that a valuation on which the client proposes to lend is suspect, the valuer being
insolvent; and an auditor will be likely to carry sole responsibility for negligent failure to discover fraud during a
company audit. A sustained campaign against the rule of joint and several liability has been mounted in this country
by certain professional bodies, who have argued instead for a regime of "proportionate liability" whereby, as against
the claimant, and not merely among defendants as a group, each defendant would bear only his share of the liability.
While it has not been suggested here that such a change should be extended to personal injury claims, this has
occurred in some American jurisdictions, whether by statute or by judicial decision. However, an investigation of the
issue by the Law Commission on behalf of the Dept of trade and Industry in 1996 led to the conclusion that the
present law was preferable to the various forms of proportionate liability."

7 Pollock in Law of Torts, 15th Edn. has discussed the concept of composite negligence. The relevant portion at page 361 is
extracted below :

"Another kind of question arises where a person is injured without any fault of his own, but by the combined effects
of the negligence of two persons of whom the one is not responsible for the other. It has been supposed that A could
avail himself, as against Z who has been injured without any want of due care on his own part, of the so-called
contributory negligence of a third person B. It is true you were injured by my negligence, but it would not have
happened if B had not been negligent also, therefore, you can not sue me, or at all events not apart from B. Recent
authority is decidedly against allowing such a defence, and in one particular class of cases it has been emphatically
disallowed. It must, however, be open to A to answer to Z: You were not injured by my negligence at all, but only
and wholly by B's. It seems to be a question of fact rather than of law (as, within the usual limits of a jury's
discretion, the question of proximate cause is in all ordinary cases) what respective degrees of connection, in kind
and degree, between the damage suffered by Z and the independent negligent conduct of A and B will make it proper
to say that Z was injured by the negligence of A alone, or of B alone, or of both A and B,. But if this last conclusion
be arrived at, it is now quite clear that Z can sue both A and B. At page 362 Author has observed as :-

"The strict analysis of the proximate or immediate cause of the event: the inquiry who could last have prevented the
mischief by the exercise of due care, is relevant only where the defendant says that the plaintiff suffered by his own
negligence. Where negligent acts of two or more independent persons have between them caused damage to a third,
the sufferer is not driven to apply any such analysis to find out whom he can sue. He is entitled- of course, within the
limits set by the general rules as to remoteness of damage- to sue all or any of the negligent persons. It is no concern
of his whether there is any duty of contribution or indemnity as between those persons, though in any case he can not
recover in the whole more than his whole damage."

8 In Palghat Coimbatore Transport Co. Ltd. V. Narayanan, [ILR (1939) Mad. 306], it has been held that where injury is
caused by the wrongful act of two parties, the plaintiff is not bound to a strict analysis of the proximate or immediate cause
of the event to find out whom he can sue. Subject to the rules as to remoteness of damage, the plaintiff is entitled to sue all
or any of the negligent persons and it is no concern of his whether there is any duty of contribution or indemnity as between
those persons, though in any case he cannot recover on the whole more than his whole damage. He has a right to recover the
full amount of damages from any of the defendants.

9 In National Insurance Co. Ltd. V. P.A. Vergis & Ors. [1991 (1) ACC 226], it has been observed that the case of composite
negligence is one when accident occurs and resulting injuries and damages flow without any negligence on the part of the
claimant but as a result of the negligence on the part of two or more persons. In such a case, the Tribunal should pass a
composite decree against owners of both vehicles. In United India Fire & Genl. Ins. Co. Ltd. V. Varghese & Ors. [1989 2
ACC 483 = 1989 ACJ 472], it has been observed that in a case of composite negligence, the injured has option to proceed
against all or any of the joint tortfeasors. Therefore, the insurer cannot take a defence that action is not sustainable as the
other joint tort feasors have not been made parties. Similar is the view taken in United India Fire & General Insurance Co.
Ltd. V. U.E. Prasad & Ors. [AIR 1985 Kar. 160]. In Andhra Marine Exports (P) Ltd. & Anr. V. P. Radhakrishnan & Ors.
[AIR 1984 Mad. 358], it has been held that every wrong doer is liable for whole damages in the case of composite
negligence if it is otherwise made out.

Similar is the view taken in Smt. Kundan Bala Vora & Anr. v. State of U.P. [AIR 1983 All. 409], where a collision
between bus and car took place. Negligence of both the drivers was found. It was held that they would be jointly and
severally liable to pay the whole damages. In Narain Devi & Ors. V. Swaran Singh & Ors. [1989 2 ACC 116 (Del.) =
1989 ACJ 1118] there was a case of composite negligence by drivers of two trucks involved in an accident which hit
the tempo from two sides. The proportion in which the two vehicles misconducted or offended was not decided. It
was held by the High Court that the Tribunal was right in holding the liability of tort feasors as joint and several.

10 A Full Bench of the High Court of Karnataka at Bangalore in Karnataka State Road Transport Corporation, Bangalore
and etc. V. Arun alias Aravind and etc. etc. [AIR 2004 Kar. 149] has affirmed the decision of another Full Bench of the same
High Court in Ganesh V. Syed Munned Ahamed & Ors. [ILR (1999) Kar. 403]. A Division Bench referred the decision in
Ganesh s case (supra) on following two questions to the larger Bench :

"1. If the proceedings are finally determined with an award made by the Tribunal and disposed of in some cases by
the appeal against the same by the High Court, does the Tribunal not become functus officio for making any further
proceedings like impleading the tort feasor or initiating action against him legally impermissible ?

2. What is the remedy of a tort feasor who has satisfied the award, but who does not know the particulars of the
vehicle which was responsible for the accident?"

11 A Full Bench in KSRTC V. Arun @ Aravind (supra) while answering aforesaid questions has observed that it was a case
of composite negligence and the liability of tort feasors was joint and several. Hence, even if there is non-impleadment of
one of tort feasors, the claimant was entitled to full compensation quantified by the Tribunal. The Full Bench referred to the
decision of a Division Bench of the Gujarat High Court in Hiraben Bhaga & Ors. V. Gujarat State Road Transport
Corporation [1982 ACJ (Supp.) 414 (Guj.)] in which it has been laid down that it is entirely the choice of the claimant
whether to implead both the joint tort feasors or either of them. On failure of the claimant to implead one of the joint tort
feasors, contributory liability cannot be fastened upon the claimant to the extent of the negligence of non-impleaded joint
tort feasors. It is for the joint tort feasors made liable to pay compensation to take proceedings to settle the equities as against
other joint tort feasors who had not been impleaded. It is open to the impleaded joint tort feasor to sue the other wrong doer
after the decree or award is given to realize to the extent of others liability. It has been laid down that the law in Ganesh s
case (supra) has been rightly laid down and it is not necessary to implead all joint tort feasors and due to failure of
impleadment of all joint tort feasors, compensation cannot be reduced to the extent of negligence of non- impleaded tort
feasors. Non-impleadment of one of the joint tort feasors is not a defence to reduce the compensation payable to the
claimant. In our opinion, the law appears to have been correctly stated in KSRTC V. Arun @ Aravind (supra).

12 A Full Bench of Madhya Pradesh High Court in Smt. Sushila Bhadoriya & Ors. V. M.P. State Road Transport Corpn. &
Anr. [2005 (1) MPLJ 372] has also laid down that in case of composite negligence, the liability is joint and several and it is
open to implead the driver, owner and the insurer one of the vehicles to recover the whole amount from one of the joint tort
feasors. As to apportionment also, it has been observed that both the vehicles will be jointly and severally liable to pay the
compensation. Once the negligence and compensation is determined, it is not permissible to apportion the compensation
between the two as it is difficult to determine the apportionment in the absence of the drivers of both the vehicles appearing
in the witness box. Therefore, there cannot be apportionment of the claim between the joint tort feasors. The relevant portion
of decision of Full Bench is extracted hereunder :

"When injury is caused as a result of negligence of two joint tort-feasors, claimant is not required to lay his finger on
the exact person regarding his proportion of liability. In the absence of any evidence enabling the Court to
distinguish the act of each joint tort-feasor, liability can be fastened on both the tort-feasors jointly and in case only
one of the joint tort-feasors is impleaded as party, then entire liability can be fastened upon one of the joint tort-
feasors. If both the joint tort-feasors are before the Court and there is sufficient evidence regarding the act of each
tort-feasors and it is possible for the Court to apportion the claim considering the exact nature of negligence by both
the joint tort-feasors, it may apportion the claim. However, it is not necessary to apportion the claim when it is not
possible to determine the ratio of negligence of joint tort-feasors. In such cases, joint tort-feasors will be jointly and
severally liable to pay the compensation.

On the same principle, in the case of joint tort- feasors where the liability is joint and several, it is the choice of the
 claimant to claim damages from the owner and driver and insurer of both the vehicles or any one of them. If claim is
made against one of them, entire amount of compensation on account of injury or death can be imposed against the
owner, driver and insurer of that vehicle as their liability is joint and several and the claimant can recover the amount
from any one of them. There can not be apportionment of claim of each tort- feasors in the absence of proper and
cogent evidence on record and it is not necessary to apportion the claim.

To sum up, we hold as under:-

(i) Owner, driver and insurer of one of the vehicles can be sued and it is not necessary to sue owner, driver and
insurer of both the vehicles. Claimant may implead the owner, driver and insurer of both the vehicles or anyone of
them.

(ii) There can not be apportionment of the liability of joint tort-feasors. In case both the joint tort-feasors are
impleaded as party and if there is sufficient material on record, then the question of apportionment can be considered
by the Claims Tribunal. However, on general principles of Jaw, there is no necessity to apportion the inter se liability
of joint tort- feasors.

Reference is answered accordingly. Appeal be placed before appropriate Bench for hearing."

13 In our opinion, the law laid down by the Madhya Pradesh High Court in Smt. Sushila Bhadoriya (supra) is also in tune
with the decisions of the High Court of Karnataka in Ganesh (supra) and Arun @ Aravind (supra). However, at the same
time, suffice it to clarify that even if all the joint tort feasors are impleaded and both the drivers have entered the witness box
and the tribunal or the court is able to determine the extent of negligence of each of the driver that is for the purpose of inter
se liability between the joint tort feasors but their liability would remain joint and several so as to satisfy the
plaintiff/claimant.

14 There is a difference between contributory and composite negligence. In the case of contributory negligence, a person
who has himself contributed to the extent cannot claim compensation for the injuries sustained by him in the accident to the
extent of his own negligence; whereas in the case of composite negligence, a person who has suffered has not contributed to
the accident but the outcome of combination of negligence of two or more other persons. This Court in T.O. Anthony v.
Karvarnan & Ors. [2008 (3) SCC 748] has held that in case of contributory negligence, injured need not establish the extent
of responsibility of each wrong doer separately, nor is it necessary for the court to determine the extent of liability of each
wrong doer separately. It is only in the case of contributory negligence that the injured himself has contributed by his
negligence in the accident. Extent of his negligence is required to be determined as damages recoverable by him in respect of
the injuries have to be reduced in proportion to his contributory negligence. The relevant portion is extracted hereunder :

"6. 'Composite negligence' refers to the negligence on the part of two or more persons. Where a person is injured as a
result of negligence on the part of two or more wrong doers, it is said that the person was injured on account of the
composite negligence of those wrong-doers. In such a case, each wrong doer, is jointly and severally liable to the
injured for payment of the entire damages and the injured person has the choice of proceeding against all or any of
them. In such a case, the injured need not establish the extent of responsibility of each wrong-doer separately, nor is
it necessary for the court to determine the extent of liability of each wrong- doer separately. On the other hand where
a person suffers injury, partly due to the negligence on the part of another person or persons, and partly as a result of
his own negligence, then the negligence of the part of the injured which contributed to the accident is referred to as
his contributory negligence. Where the injured is guilty of some negligence, his claim for damages is not defeated
merely by reason of the negligence on his part but the damages recoverable by him in respect of the injuries stands
reduced in proportion to his contributory negligence.

7. Therefore, when two vehicles are involved in an accident, and one of the drivers claims compensation from the
other driver alleging negligence, and the other driver denies negligence or claims that the injured claimant himself
was negligent, then it becomes necessary to consider whether the injured claimant was negligent and if so, whether
he was solely or partly responsible for the accident and the extent of his responsibility, that is his contributory
negligence. Therefore where the injured is himself partly liable, the principle of 'composite negligence' will not apply
nor can there be an automatic inference that the negligence was 50:50 as has been assumed in this case. The Tribunal
ought to have examined the extent of contributory negligence of the appellant and thereby avoided confusion
between composite negligence and contributory negligence. The High Court has failed to correct the said error."

15 The decision in T.O. Anthony V. Karvarnan & Ors. (supra) has been relied upon in Andhra Pradesh State Road Transport
Corpn. & Anr. V. K Hemlatha & Ors. [2008 (6) SCC 767].

16 In Pawan Kumar & Anr. V. Harkishan Dass Mohan Lal & Ors. [2014 (3) SCC 590], the decisions in T.O. Anthony
(supra) and Hemlatha (supra) have been affirmed, and this Court has laid down that where plaintiff/claimant himself is found
to be negligent jointly and severally, liability cannot arise and the plaintiff s claim to the extent of his own negligence, as
may be quantified, will have to be severed. He is entitled to damages not attributable to his own negligence. The
law/distinction with respect to contributory as well as composite negligence has been considered by this Court in
Machindranath Kernath Kasar V. D.S. Mylarappa & Ors. [2008 (13) SCC 198] and also as to joint tort feasors. This Court
has referred to Charlesworth & Percy on negligence as to cause of action in regard to joint tort feasors thus:

"42. Joint tortfeasors, as per 10th Edn. of Charlesworth & Percy on Negligence, have been described as under :

Wrongdoers are deemed to be joint tortfeasors, within the meaning of the rule, where the cause of action against each
of them is the same, namely, that the same evidence would support an action against them, individually ..
Accordingly, they will be jointly liable for a tort which they both commit or for which they are responsible because
the law imputes the commission of the same wrongful act to two or more persons at the same time. This occurs in
cases of (a) agency; (b) vicarious liability; and (c) where a tort is committed in the course of a joint act, whilst
pursuing a common purpose agreed between them."

The question also arises as to the remedies available to one of the joint tort feasors from whom compensation has
been recovered. When the other joint tort feasor has not been impleaded, obviously question of negligence of non-
impleaded driver could not be decided apportionment of composite negligence cannot be made in the absence of
impleadment of joint tort feasor. Thus, it would be open to the impleaded joint tort feasors after making payment of
compensation, so as to sue the other joint tort feasor and to recover from him the contribution to the extent of his
negligence. However, in case when both the tort feasors are before the court/tribunal, if evidence is sufficient, it may
determine the extent of their negligence so that one joint tort feasor can recover the amount so determined from the
other joint tort feasor in the execution proceedings, whereas the claimant has right to recover the compensation from
both or any one of them. This Court in National Insurance Co. Ltd. V. Challa Bharathamma & Ors. [2004 (8) SCC
517] with respect to mode of recovery has laid down thus :

"13. The residual question is what would be the appropriate direction. Considering the beneficial object of the Act, it
would be proper for the insurer to satisfy the award, though in law it has no liability. In some cases the insurer has
been given the option and liberty to recover the amount from the insured. For the purpose of recovering the amount
paid from the owner, the insurer shall not be required to file a suit. It may initiate a proceeding before the concerned
Executive Court as if the dispute between the insurer and the owner was the subject matter of determination before
the Tribunal and the issue is decided against the owner and in favour of the insurer. Before release of the amount to
the claimants, owner of the offending vehicle shall furnish security for the entire amount which the insurer will pay
to the claimants. The offending vehicle shall be attached, as a part of the security. If necessity arises the Executive
Court shall take assistance of the concerned Regional Transport Authority. The Executing Court shall pass
appropriate orders in accordance with law as to the manner in which the owner of the vehicle shall make payment to
the insurer. In case there is any default it shall be open to the Executing Court to direct realization by disposal of the
securities to be furnished or from any other property or properties of the owner of the vehicle i.e. the insured. In the
instant case considering the quantum involved we leave it to the discretion of the insurer to decide whether it would
take steps for recovery of the amount from the insured."

17 In Oriental Insurance Co. Ltd. V. Nanjappan & Ors. [2004 (13) SCC 224] also, this Court has laid down thus :

"8. Therefore, while setting aside the judgment of the High court we direct in terms of what has been stated in Baljit
Kaur's case [2004 (2) SCC 1] that the insurer shall pay the quantum of compensation fixed by the Tribunal, about
which there was no dispute raised, to the respondents- claimants within three months from today. The for the purpose
of recovering the same from the insured, the insurer shall not be required to file a suit. It may initiate a proceeding
before the concerned Executing Court as if the dispute between the insurer and the owner was the subject matter of
determination before the Tribunal and the issue is decided against the owner and in favour of the insurer. Before
release of the amount to the insured, owner of the vehicle shall be issued a notice and he shall be required to furnish
security for the entire amount which the insurer will pay to the claimants. The offending vehicle shall be attached, as
a part of the security. If necessity arises the Executing Court shall take assistance of the concerned Regional
Transport authority. The Executing Court shall pass appropriate orders in accordance with law as to the manner in
which the insured, owner of the vehicle shall make payment to the insurer. In case there is any default it shall be
open to the Executing Court to direct realization by disposal of the securities to be furnished or from any other
property or properties of the owner of the vehicle, the insured. The appeal is disposed of in the aforesaid terms, with
no order as to costs."

18 This Court in Challa Bharathamma & Nanjappan (supra) has dealt with the breach of policy conditions by the owner
when the insurer was asked to pay the compensation fixed by the tribunal and the right to recover the same was given to the
insurer in the executing court concerned if the dispute between the insurer and the owner was the subject-matter of
determination for the tribunal and the issue has been decided in favour of the insured. The same analogy can be applied to
the instant cases as the liability of the joint tort feasor is joint and several. In the instant case, there is determination of inter
se liability of composite negligence to the extent of negligence of 2/3rd and 1/3rd of respective drivers. Thus, the vehicle -
trailor-truck which was not insured with the insurer, was negligent to the extent of 2/3rd. It would be open to the insurer
being insurer of the bus after making payment to claimant to recover from the owner of the trailor-truck the amount to the
aforesaid extent in the execution proceedings. Had there been no determination of the inter se liability for want of evidence
or other joint tort feasor had not been impleaded, it was not open to settle such a dispute and to recover the amount in
execution proceedings but the remedy would be to file another suit or appropriate proceedings in accordance with law.

What emerges from the aforesaid discussion is as follows :

(i) In the case of composite negligence, plaintiff/claimant is entitled to sue both or any one of the joint tort feasors
and to recover the entire compensation as liability of joint tort feasors is joint and several.

(ii) In the case of composite negligence, apportionment of compensation between two tort feasors vis a vis the
plaintiff/claimant is not permissible. He can recover at his option whole damages from any of them.

(iii) In case all the joint tort feasors have been impleaded and evidence is sufficient, it is open to the court/tribunal to
determine inter se extent of composite negligence of the drivers. However, determination of the extent of negligence
between the joint tort feasors is only for the purpose of their inter se liability so that one may recover the sum from
the other after making whole of payment to the plaintiff/claimant to the extent it has satisfied the liability of the
other. In case both of them have been impleaded and the apportionment/ extent of their negligence has been
determined by the court/tribunal, in main case one joint tort feasor can recover the amount from the other in the
execution proceedings.

(iv) It would not be appropriate for the court/tribunal to determine the extent of composite negligence of the drivers
of two vehicles in the absence of impleadment of other joint tort feasors. In such a case, impleaded joint tort feasor
should be left, in case he so desires, to sue the other joint tort feasor in independent proceedings after passing of the
decree or award.

19 Resultantly, the appeals are allowed. The judgment and order passed by the High Court is hereby set aside. Parties to bear
the costs as incurred.
 33

2020 (0) AIJEL-SC 66547

SUPREME COURT OF INDIA

Hon'ble Judges:Sanjay Kishan Kaul, Aniruddha Bose and Krishna Murari JJ.

Beli Ram Versus Rajinder Kumar

CIVIL APPEAL No. 7220 of 2011 ; 7221 of 2011 ; *J.Date :- SEPTEMBER 23, 2020

MOTOR VEHICLES ACT, 1988 Section - 14 , 15 , 149(1)(2)(a)(ii)

WORKMENS COMPENSATION ACT, 1923 Section - 3

Motor Vehicles Act, 1988 - S. 14, 15, 149(2)(a)(ii) - Employees Compensation Act, 1923 - S. 3
- motor accident - expired driving licence of employee - liability of insurance company - non-
renewal of driving licence for period of three years of commercial vehicle like truck - rst
respondent claimant, met with an accident while driving a truck owned by appellant-
employer, under whom he was gainfully employed - aspect of non-validity of driving licence
weighed with High Court while passing impugned judgment, absolving insurance company
of any liability and fastening the same upon appellant on account of there being a material
breach of insurance policy - whether in case of a valid driving licence, if licence has expired,
insured is absolved of its liability - held, yes - it is clearly a case of lack of reasonable care to
see that employee gets his licence renewed, further, if original licence is veri ed, certainly
employer would know when licence expires - and here it was a commercial vehicle being a
truck - appellant has to, thus, bear responsibility and consequent liability of permitting driver
to drive with an expired licence over a period of three (3) years - employer cannot wash his
hands off responsibility of not checking up whether driver has renewed licence - gross
negligence on the part of employer as insured in verifying driving licence - insurance
company is not liable to pay compensation - appeals dismissed.

Imp.Para: [ 15 ] [ 16 ] [ 23 ]

Cases Referred To :

1. National Insurance Co. Ltd. V. Hem Raj & Ors., 2012 0 ACJ 1891
2. National Insurance Co. Ltd. V. Swaran Singh And Ors., 2004 3 SCC 297 : 2004 AIR SC
1531 : 2004 (1) Scale 180 : JT 2004 (1) 109 : 2004 (1) SCR 180
3. Nirmala Kothari V. United India Insurance Company Limited., 2020 4 SCC 49 : 2020 AIR
SC 1193 : 2020 (5) Scale 234 : JT 2020 (3) 44 : 2020 (2) SCC(Cri) 14

Cases Relied on :

1. Oriental Insurance Co. Ltd. V. Manoj Kumar & Ors., 2015 111 ALR 275
2. Tata Aig General Insurance Co. Ltd. V. Akansha & Ors., 2015 0 SCCOnLine 6758
Equivalent Citation(s):
AIR 2020 SC 4453 : 2020 (11) Scale 111

JUDGMENT :-

SANJAY KISHAN KAUL, J.

1 The sole question of law for consideration in the present appeals is whether in case of a
valid driving licence, if the licence has expired, the insured is absolved of its liability.

2 The facts are in a very narrow compass. The first respondent herein, met with an accident
on 20.5.1999 while driving a truck owned by the appellant herein, under whom he was
gainfully employed. The consequence for the first respondent was 20 per cent permanent
disability. The first respondent herein filed a petition under the Workmens Compensation
Act, 1923 (hereinafter referred to as the Compensation Act ) before the Commissioner,
Sadar, Bilaspur on 17.2.1999 seeking compensation of an amount of Rs.5,00,000/-,
impleading the appellant and second respondent herein the insurance company which had
insured the vehicle. These proceedings resulted in an award by the Commissioner on
8.12.2004 granting Rs. 94,464/-for the injuries suffered and Rs.67,313/-towards medical
expenses of the first respondent. The amounts awarded were to carry interest @ 9 per cent
per annum from the date of filing of the application till the date of payment. The
compensation amount was mulled on to the second respondent as insurer, while the interest
was directed to be paid by the appellant herein.

3 The parties to the proceedings all filed appeals aggrieved by different aspects of the
award. An intrinsic part of the consideration by the High Court was the issue raised about
the validity of the driving licence of the first respondent at the time of the accident. The
driving licence was endorsed by the Superintendent of R&LA Office, Udaipur but the licence
expired on 6.9.1996 and there was no endorsement for renewal thereafter. Thus, the first
respondent was driving the vehicle as the driver of the appellant herein for almost three
years without the licence being renewed.

4 The aforesaid aspect of the non-validity of the driving licence weighed with the High Court
while passing the impugned judgment dated 3.3.2009, absolving the insurance company of
any liability and fastening the same upon the appellant herein on account of there being a
material breach of the insurance policy.

5 The High Court, after the aforesaid finding took note of Section 4 of the Compensation Act,
more specifically the following aspect:

4. Amount of compensation

(1) Subject to the provisions of this Act, the amount of compensation shall be as
follows, namely:

(a) Where death results from the An amount equal to fifty per cent
injury of the monthly wages of the
deceased workman multiplied by
the relevant factor;

or
 An amount of eighty thousand,
whichever is more;

 
(b) Where permanent total An amount equal to sixty per cent
disability results from the injury of the monthly wages of the
injured workman multiplied by
the relevant factor,

or

An amount of ninety thousand

rupees, whichever is more.

Explanation I.--For the purposes of clause (a) and clause (b)," relevant factor", in relation to a
workman means the factor specified in the second column of Schedule IV against the entry
in the first column of that Schedule specifying the number of years which are the same as
the completed years of the age of the workman on his last birthday immediately preceding
the date on which the compensation fell due.

6 On consideration of the aforesaid provision, the High Court opined that there was no
provision under the Compensation Act for payment of medical expenditure incurred by the
claimant for treatment. The accident having taken place in the year 1999, the monthly wages
stated to be Rs.4,500/-, it was found that the maximum amount of wages permissible under
the Compensation Act for determining the compensation could be Rs.2,000/-.
Compensation was liable to be paid within thirty (30) days of the accident and the owner
could have recovered the amount from the insurer if ultimately it was established that the
insurer was liable to have indemnified the insured. The appellant was found to be in breach
of the statutory duty of a benevolent legislation, i.e., the Compensation Act and, thus, the
appellant was burdened to pay interest as also maximum penalty of 50 per cent. The
amount of compensation was thus quantified as under:

1. Amount of compensation = Rs. 83,968/-

2. Penalty @ 50% on the amount of = Rs. 41,984/-

compensation

3 . Interest w.e.f. 20.6.1999 to 3.3.2009 (9 = Rs. 73,335/-

years & 257 days) on the amount of
compensation

7 The result was that the appeals of the insurer and the claimant were allowed. The
endeavour to seek review of the judgment on the basis of pronouncement of this Court in
National Insurance Co. Ltd. v. Swaran Singh and Ors., (2004) 3 SCC 297 failed and the
application was dismissed on 8.7.2009.

8 The only question which has been debated before us, is as set out at the inception of the
judgment. The appellant sought to rely upon the recent judgment of this Court, Nirmala
Kothari v. United India Insurance Company Limited., (2020) 4 SCC 49. The question of law
examined in this judgment was as to what is the extent of care/diligence expected of the
employer/insured while employing a driver. The legal position regarding the liability of the
insurance company when the driver of the offending vehicle possessed an invalid/fake
driver s licence was adverted to for answering this question, by referring to earlier judicial
pronouncements and the same was culled out in para 12 as under:

12. While hiring a driver the employer is expected to verify if the driver has a driving
licence. If the driver produces a licence which on the face of it looks genuine, the
employer is not expected to further investigate into the authenticity of the licence
unless there is cause to believe otherwise. If the employer finds the driver to be
competent to drive the vehicle and has satisfied himself that the driver has a driving
licence there would be no breach of Section 149(2)(a)(ii) and the insurance company
would be liable under the policy. It would be unreasonable to place such a high onus on
the insured to make enquiries with RTOs all over the country to ascertain the veracity of
the driving licence. However, if the insurance company is able to prove that the
owner/insured was aware or had notice that the licence was fake or invalid and still
permitted the person to drive, the insurance company would no longer continue to be
liable.

9 We have heard learned counsel for the parties and on a query being raised, whether there
is a view taken on the question as to what would be the consequence of a valid driving
licence having expired both the learned counsel for the appellant and learned counsel for
respondent No.2 insurance company stated that there was no direct view on this point. We
even posed a question qua any judicial view of the High Courts in this behalf, but the answer
to the same was also in the negative. We reserved the orders because we wanted to satisfy
ourselves over this aspect.

10 We have not been able to trace out any judgments of this Court but there are judicial
pronouncements of the High Courts dealing with the issue.

11 We consider it appropriate to first commence with the view of this Court in the Swaran
Singh.3 case, which examined the meaning of the expression duly licensed , as used in
Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988 (hereinafter referred to as the MV Act ).
The factual matrix dealt with the claim of a third party and the different eventualities
considered were: (a) licence not held; (b) fake licence held; (c) licence held but validity
whereof has expired; (d) licence not held for type of vehicle being driven; and (e) learner s
licence held. We may note here that the facts of the present case relate to eventuality (c)
above. A liberal view was taken considering the intent of the legislation in question and that
it was a case of a third party claim. In an endeavour of the insurance company to absolve
itself of liability the following observations were made:

41. However, clause (a) opens with the words "that there has been a breach of a
specified condition of the policy", implying that the insurer's defence of the action
would depend upon the terms of the policy. The said sub-clause contains three
conditions of disjunctive character, namely, the insurer can get away from the liability
when (a) a named person drives the vehicle; (b) it was being driven by a person who did
not have a duly granted licence; and (c) driver is a person disqualified for holding or
obtaining a driving licence.

42. We may also take note of the fact that whereas in Section 3 the words used are
'effective licence', it has been differently worded in Section 149(2) i.e. 'duly licensed'. If
a person does not hold an effective licence as on the date of the accident, he may be
liable for prosecution in terms of Section 141 of the Act but Section 149 pertains to
insurance as regard third party risks.
 43. A provision of a statute which is penal in nature vis-a-vis a provision which is
beneficent to a third party must be interpreted differently. It is also well known that the
provisions contained in different expressions are ordinarily construed differently.

44. The words effective licence used in Section 3, therefore, in our opinion cannot be
imported for sub-section (2) of Section 149 of the Motor Vehicles Act. We must also
notice that the words 'duly licensed' used in sub-section (2) of Section 149 are used in
past tense.

45. Thus, a person whose licence is ordinarily renewed in terms of the Motor Vehicles
Act and the rules framed thereunder despite the fact that during the interregnum
period, namely, when the accident took place and the date of expiry of the licence, he
did not have a valid licence, he could during the prescribed period apply for renewal
thereof and could obtain the same automatically without undergoing any further test or
without having been declared unqualified therefor. Proviso appended to Section 14 in
unequivocal term states that the licence remains valid for a period of thirty days from
the day of its expiry.

......

48. Furthermore, the insurance company with a view to avoid its liabilities is not only
required to show that the conditions laid down under Section 149(2)(a) or (b) are
satisfied but is further required to establish that there has been a breach on the part of
the insured. By reason of the provisions contained in the 1988 Act, a more extensive
remedy has been conferred upon those who have obtained judgment against the user
of a vehicle and after a certificate of insurance is delivered in terms of Section 147(3) a
third party has obtained a judgment against any person insured by the policy in respect
of a liability required to be covered by Section 145, the same must be satisfied by the
insurer, notwithstanding that the insurer may be entitled to avoid or to cancel the policy
or may in fact have done so. The same obligation applies in respect of a judgment
against a person not insured by the policy in respect of such a liability, but who would
have been covered if the policy had covered the liability of all persons, except that in
respect of liability for death or bodily injury.

12 We may next advert to the judgment in the Nirmala Kothari4 case. The judgment was
sought to be canvassed in support of the proposition by learned counsel for the appellant
and we reproduce the relevant paragraphs in addition to the one reproduced above, as
under:

10. While the insurer can certainly take the defence that the licence of the driver of the
car at the time of accident was invalid/fake however the onus of proving that the
insured did not take adequate care and caution to verify the genuineness of the licence
or was guilty of willful breach of the conditions of the insurance policy or the contract
of insurance lies on the insurer.

11. The view taken by the National Commission that the law as settled in the PEPSU
case is not applicable in the present matter as it related to third-party claim is
erroneous. It has been categorically held in the case of National Insurance Co. Ltd. vs.
Swaran Singh & Ors. (SCC p.341, para 110) that,

110. (iii) Mere absence, fake or invalid driving licence or disqualification of the driver
for driving at the relevant time, are not in themselves defences available to the insurer
against either the insured or the third parties. To avoid its liability towards the insured,
 the insurer has to prove that the insured was guilty of negligence and failed to exercise
reasonable care in the matter of fulfilling the condition of the policy regarding use of
vehicles by a duly licenced driver or one who was not disqualified to drive at the
relevant time.

13 The submission, thus, was that the appellant as insured had taken adequate care by
verifying the licence of the driver/first respondent at the time of employment and the liability
could have been mulled on the appellant only if he was aware or had notice that the licence
was fake or invalid and still permitted the person to drive. This was stated not to be the
factual position in the present case as the issuance of the licence has not been doubted, but
rather that it was not subsequently renewed which was pleaded to be the responsibility of
the first respondent.

14 We did point out at that stage itself by raising a query as to how this judgment would help
in the case of the appellant since it was not a case of a fake or invalid licence. If the
appellant was required to take adequate care and caution to verify the driving licence at the
threshold, thereafter, the burden shifted on the insurance company to prove that such due
care was not taken, could it be said that having, at the first blush verified the driving licence,
the appellant was absolved of the responsibility of verifying whether the driving licence was
kept renewed? 

15 We are of the view that once the basic care of verifying the driving licence has to be taken
by the employer, though a detailed enquiry may not be necessary, the owner of the vehicle
would know the validity of the driving licence as is set out in the licence itself. It cannot be
said that thereafter he can wash his hands off the responsibility of not checking up whether
the driver has renewed the licence. It is not a case where a licence has not been renewed for
a short period of time, say a month, as was considered in the case of Swaran Singh5 where
the benefit was given to a third party by burdening the insurance company. The licence in the
instant case, has not been renewed for a period of three years and that too in respect of
commercial vehicle like a truck. The appellant showed gross negligence in verifying the
same.

16 We are conscious of the fact that in the present case the beneficiary is the driver himself
who was negligent but then we are not dealing with a claim under the MV Act but under the
Compensation Act, which provides for immediate succor, not really based on a fault theory
with a limited compensation as specified being paid. We are, thus, in the present
proceedings not required to decide the share of the burden between the appellant as the
owner and the first respondent as the driver as may happen in a proceeding under the MV
Act.

17 We now turn to the views of some of the High Courts, which have come to our notice on
our own research!

18 The Delhi High Court in Tata AIG General Insurance Co. Ltd. v. Akansha & Ors., 2015 SCC
OnLine 6758 : (2015) 2 TAC 52 found that the driving licence having expired led to the
natural finding that there was no valid driving licence on the date of the accident. The initial
onus was discharged by the insurance company in view of the licence not being valid on the
date of the accident. The onus, thereafter, shifted to the owner/insured to prove that he had
taken sufficient steps to ensure that there was no breach of the terms and conditions of the
insurance policy. Since no evidence had been led in this behalf, a presumption was drawn
that there was willful and conscious breach of the terms and conditions of the insurance
policy.
19 The Allahabad High Court in The Oriental Insurance Co. Ltd. v. Manoj Kumar & Ors.,
(2015) 111 ALR 275 again dealt with the case of an expired driving licence. The endeavour
to rely on the principle set forth in a fake licence case was held not applicable in the case of
an expired licence since the owner was supposed to be aware that the driving licence of the
driver had expired and, thus, it was held that it was the duty of the owner to have ensured
that the driver gets the licence renewed within time. In the absence of a valid driving licence,
the vehicle was being driven in breach of the condition of the policy, requiring the vehicle to
be driven by a person who is duly licensed, and thus, there was breach of Section 149(2) (a)
(ii) of the MV Act, the consequence being that the insurance company could not he held
liable.

20 The last judgment is of the Himachal Pradesh High Court in National Insurance Co. Ltd. v.
Hem Raj & Ors., 2012 ACJ 1891. This was, once again, a case of an originally valid licence,
which had expired, there was no question of a fake licence. It was opined that the
conclusions to be drawn from the observations of the judgment in the Swaran Singh9 case
of this Court, were that the insurance company can defend an action on the ground that the
driver was not duly licensed on the date of the accident, i.e., an expired licence having not
been renewed within thirty (30) days of the expiry of the licence as provided in Sections 14 &
15 of the MV Act. In this context it was observed that the Swaran Singh.10 case did not deal
with the consequences if the licence is not renewed within the period of thirty (30) days. If
the driving licence is not renewed within thirty (30) days, it was held, the driver neither had
an effective driving licence nor can he said to be duly licenced. The conclusion, thus, was
that the driver, who permits his licence to expire and does not get it renewed till after the
accident, cannot claim that it should be deemed that the licence is renewed retrospectively.

21 The learned Judge debated the question of the consequences of the MV Act being a
beneficial piece of legislation. Thus, if two interpretations were possible, it was opined that
the one which is in favour of the claimants should be given, but violence should not be done
to the clear and plain language of the statute. Thus, while protecting the rights of the
claimants by asking the insurance company to deposit the amount, the recovery of the same
from the insured would follow as the sympathy can only be for the victim of the accident.
The right which has to be protected, is of the victim and not the owner of the vehicle. It was,
thus, observed in para 18 as under:

18. When an employer employees a driver, it is his duty to check that the driver is duly
licensed to drive the vehicle. Section-5 of the Motor Vehicles Act provides that no
owner or person incharge of a motor vehicle shall cause or permit any person to drive
the vehicle if he does not fulfil the requirements of Sections 3 and 4 of the Motor
Vehicles Act. The owner must show that he has verified the licence. He must also take
reasonable care to see that his employee gets his licence renewed within time. In my
opinion, it is no defence for the owner to plead that he forgot that the driving licence of
his employee had to be renewed. A person when he hands his motor vehicle to a driver
owes some responsibility to society at large. Lives of innocent people are put to risk in
case the vehicle is handed over to a person not duly licensed. Therefore, there must be
some evidence to show that the owner had either checked the driving licence or had
given instructions to his driver to get his driving licence renewed on expiry thereof. In
the present case, no such evidence has been led. In view of the above discussion, I am
clearly of the view that there was a breach of the terms of the policy and the Insurance
Company could not have been held liable to satisfy the claim.

22 We have reproduced the aforesaid observations as it is our view that it sets forth lucidly
the correct legal position and we are in complete agreement with the views taken in all the
three judgments of three 
different High Courts with the culmination being the elucidation of
the correct legal principle in the judgment in the Hem Raj11 case.

23 When we turn to the facts of the present case there is almost an identical situation where
the appellant has permitted to let the first respondent driver drive the truck with an expired
licence for almost three (3) years. It is clearly a case of lack of reasonable care to see that
the employee gets his licence renewed, further, if the original licence is verified, certainly the
employer would know when the licence expires. And here it was a commercial vehicle being
a truck. The appellant has to, thus, bear responsibility and consequent liability of permitting
the driver to drive with an expired licence over a period of three (3) years. The only thing we
note is that fortunately there has been no accident with a third party claimant but the person
who has caused the sufferance and sufferer are one and the same person, i.e., the first
respondent driver. We are, however, dealing with the determination under the Compensation
Act and those provisions are for the benefit of the workmen like the first respondent, even
though he may be at fault, by determining a small amount payable to provide succor at the
relevant stage when the larger issues could be debated in other proceedings. The only
exception is in the provisos to Section 3 of the Compensation Act, which is not the factual
situation in the present case. The relevant provision reads as under:

3. Employer' s liability for compensation.

(1) If personal injury is caused to a workman
by accident arising out of and in the course of his employment, his employer shall be
liable to pay compensation in accordance with the provisions of this Chapter:

Provided that the employer shall not be so liable-

(a) in respect of any injury which does not result in the total or partial disablement of
the workman for a period exceeding [four] days;

(b) in respect of any [injury, not resulting in death, caused by] an accident which is
directly attributable to-(i) the workman having been at the time thereof under the
influence of drink or drugs, or

(ii) the wilful disobedience of the workman to an order expressly given, or to a rule
expressly framed, for the purpose of securing the safety of workmen, or

(iii) the wilful removal or disregard by the workman of any safety guard or other device
which he knew to have been provided for the purpose of securing the safety of
workmen.

We are not aware whether any other proceedings have been initiated or not, at least, none
that have been brought to our notice. The aforesaid findings of the initial lack of care by the
first respondent in not renewing the driving licence would be present, but the lack of care of
the appellant as the employer would also arise. We have penned down the aforesaid views
as such a situation is quite likely to arise in proceedings under the MV Act where a third
party is claiming the amount. Proceedings here being under the Compensation Act, the
consequences are not flowing to the first respondent as the initial negligent person.

24 In view of the aforesaid, the appeals are dismissed by settling the aforesaid question of
law and leaving the parties to bear their own costs.
 34

2018(0) AIJEL-SC 61863

SUPREME COURT OF INDIA

Hon'ble Judges:Dipak Misra, A.M.Khanwilkar and D.Y.Chandrachud JJ.

Singh Ram Versus Nirmala

CIVIL APPEAL No. 2103 of 2018 ; *J.Date :- MARCH 6, 2018

MOTOR VEHICLES ACT, 1988 Section - 149(2)(a)(ii) , 166

Motor Vehicles Act 1988 - S. 149(2)(a)(ii), 166 - motor accident - fake driving licence -
liability of insurance company - owner cum driver did not depose in evidence and stayed
away from the witness box - he produced a licence which was found to be fake - another
licence which he sought to produce had already expired before the accident and was not
renewed within the prescribed period - it was renewed well after two years had expired -
appellant as owner had evidently failed to take reasonable care (proposition (vii) of Swaran
Singh) since he could not have been unmindful of facts which were within his knowledge -
direction by the Tribunal, con rmed by High Court, to pay and recover cannot be faulted -
appeal dismissed.

Imp.Para: [ 8 ] [ 9 ]

Cases Relied on :

1. National Insurance Co. Ltd. V Swaran Singh, 2004 3 SCC 297 : 2004 AIR SC 1531 : 2004
(1) Scale 180 : JT 2004 (1) 109 : 2004 (1) SCR 180

Cited in :

1. (Referred To) :- Rani Vs. National Insurance Company Limited, 2018 (8) SCC 492 : 2018
(9) Scale 310 : JT 2018 (7) SC 392 : 2018 (3) SCC(Cri) 599 : 2018 (189) AIC 88 : 2018
(3) RCR(Civ) 979 : 2018 (4) JCR(SC) 61 : 2018 DNJ(SC) 914 : 2018 (5) BCR 456 : 2018
AllSCR 2011 : 2018 (3) ACC 501 : 2018 ACJ 2430 : 2018 (3) TAC 683 : 2018 (2) TNMAC
278 : 2018 (3) HLT 182 : 2018 JX(SC) 504 : 2018 AIJEL_SC 62555

Equivalent Citation(s):
2018 (3) SCC 800 : AIR 2018 SC 1290

JUDGMENT :-

D.Y.CHANDRACHUD, J.

1 Delay condoned.
2 In a claim for compensation under Section 166 of the Motor Vehicles Act
1988, the Motor
Accident Claims Tribunal ('the Tribunal'), Yamunanagar at
Jagadhri found that the insured
did not hold a valid driving licence at the time
of the accident. The Tribunal absolved the
insurer for that reason. The insurer
was, however, directed to pay the compensation awarded
to the claimant and
to recover it from the owner of the offending motor cycle. The High
Court dealt
with three appeals: one filed by the claimant seeking enhancement of
compensation, a second by the insurance company and the third by the owner
cum driver of
the offending vehicle. The High Court held that in view of the
decision of this Court in
National Insurance Co. Ltd. v Swaran Singh, 2004 3 SCC 297 the
Tribunal was correct in
directing the insurer to pay the compensation and to
recover it from the owner-cum-driver of
the offending vehicle. The present
appeal has been filed by the owner and driver. The only
point which has been
urged in support of the appeal is that the Tribunal and the High Court
erred in
fastening the liability on him by granting a right of recovery to the insurer.

3 The accident took place on 22 March 2010. The deceased Sunil Kumar
was riding a motor
cycle bearing Registration No HR-04B-4673. The Tribunal
found that the accident was
caused as a result of the rash and negligent act of
the appellant. This finding of fact has not
been disturbed by the High Court.
The deceased was employed as a sweeper in Haryana
Roadways and was
engaged on a salary of Rs 11,928 per month. The Tribunal allowed future
prospects of 50%, the deceased being just short of 36 years of age. After
deducting an
amount representing one-fourth of the earnings for personal
expenses, the Tribunal applied
a multiplier of 15. The total compensation was
computed at Rs 24,15,420 to which the
Tribunal added an amount of Rs 20,000
under conventional heads. However, the Tribunal
held that the financial
assistance which the heirs of the deceased would receive over a
period of 12
years from the employee (amounting to Rs 16,16,112) would have to be
deducted from the compensation. After making the deduction, the Tribunal
awarded an
amount of Rs. 8,19,500 together with interest at 7.5 per cent per
annum from the date of the
claim petition. The High Court has enhanced the
compensation to Rs 16,04,912.

4 Special Leave Petition (C ) No 7737 of 2015 filed by the claimant, which

was connected to
this appeal, has been dismissed on 8 February 2018.

5 In the present appeal by the owner cum driver of the offending motor
cycle, the
submission is that in view of the decision of a Bench of three learned
Judges of this Court in
Swaran Singh (supra), the insurer ought not to have
been absolved. Hence the direction to
the insurer to pay and recover the
compensation from the appellant should, it has been
urged, be modified to
fasten a joint and several liability on the insurer.

6 Before we advert to the decision in Swaran Singh (supra) a brief

reference to the facts as
they emerge from the decision of the Tribunal is
necessary. Initially before the Tribunal the
appellant produced a driving licence
issued by the Motor Vehicles Department, Agra (Exh.R-
1). The driving licence
was found to be fake. The statement of the Senior Assistant in the
office of the
RTO, Agra was that Exh.R-1 had not been issued by the office. The Tribunal
noted that the witness had proved the report (Exh.R-2) issued by the
department and
concluded that the licence was fake. Faced with this situation,
the appellant attempted to
prove that he held a valid driving licence issued by the licencing authority at Jagadhri to drive
a motor cycle. The Tribunal rejected
the application filed by the appellant for producing
additional evidence. The
Tribunal noted that even otherwise, the licence which was issued by
the
licencing authority, Jagadhri for a tractor and car was valid only until 29 August
2009.
The accident took place on 22 March 2010. The licence was renewed
on 28 November 2011
more than two years after it had expired. On these facts,
the Tribunal observed that on the
date of the accident, the appellant was not
holding a valid and effective driving licence nor
was there any evidence to
indicate that the licence was sought to be renewed as required in
law, within 30
days of its expiry. The Tribunal also observed that the appellant did not hold a
valid licence to drive a motor cycle. On these grounds, the insurer was
absolved. The High
Court has confirmed the direction of the Tribunal to pay
and recover.

7 In Swaran Singh (supra), this Court held that the holder of a driving
licence has a period of
thirty days on its expiry, to renew it:

"45. Thus, a person whose licence is ordinarily renewed in

terms of the Motor Vehicles
Act and the Rules framed
thereunder, despite the fact that during the interregnum
period, namely, when the accident took place and the date
of expiry of the licence, he
did not have a valid licence, he
could during the prescribed period apply for renewal
thereof
and could obtain the same automatically without undergoing
any further test or
without having been declared unqualified
therefor. Proviso appended to Section 14 in
unequivocal
terms states that the licence remains valid for a period of
thirty days from
the day of its expiry.

46. Section 15 of the Act does not empower the authorities

to reject an application for
renewal only on the ground that
there is a break in validity or tenure of the driving
licence has lapsed, as in the meantime the provisions for disqualification
of the driver
contained in Sections 19, 20, 21, 22, 23 and 24
will not be attracted, would indisputably
confer a right upon
the person to get his driving licence renewed. In that view of
the
matter, he cannot be said to be delicensed and the same
shall remain valid for a period
of thirty days after its expiry."

The following conclusion has been recorded in summation in the judgment::

"(iii) The breach of policy condition e.g. disqualification of

the driver or invalid driving
licence of the driver, as contained
in sub-section (2)(a)(ii) of Section 149, has to be
proved to
have been committed by the insured for avoiding liability by
the insurer. Mere
absence, fake or invalid driving licence or
disqualification of the driver for driving at the
relevant time,
are not in themselves defences available to the insurer
against either the
insured or the third parties. To avoid its
liability towards the insured, the insurer has to
prove that the
insured was guilty of negligence and failed to exercise
reasonable care
in the matter of fulfilling the condition of the
policy regarding use of vehicles by a duly
licensed driver or
one who was not disqualified to drive at the relevant time.

(iv) Insurance companies, however, with a view to avoid

their liability must not only
establish the available defence(s)
raised in the said proceedings but must also
establish
"breach" on the part of the owner of the vehicle; the burden
of proof wherefor
would be on them.

(v) The court cannot lay down any criteria as to how the
said burden would be
discharged, inasmuch as the same
would depend upon the facts and circumstances of
each
case.

(vi) Even where the insurer is able to prove breach on the

part of the insured concerning
the policy condition regarding
holding of a valid licence by the driver or his qualification
to
drive during the relevant period, the insurer would not be
allowed to avoid its liability
towards the insured unless the
said breach or breaches on the condition of driving
licence
is/are so fundamental as are found to have contributed to
the cause of the
accident. The Tribunals in interpreting the
policy conditions would apply "the rule of
main purpose" and
the concept of "fundamental breach" to allow defences
available to
the insurer under Section 149(2) of the Act.
 (vii) The question, as to whether the owner has taken
reasonable care to find out as to
whether the driving licence
produced by the driver (a fake one or otherwise), does not
fulfil the requirements of law or not will have to be
determined in each case".

8 In the present case it is necessary to note, as observed by the Tribunal,

that the owner did
not depose in evidence and stayed away from the witness
box. He produced a licence which
was found to be fake. Another licence which
he sought to produce had already expired
before the accident and was not
renewed within the prescribed period. It was renewed well
after two years had
expired. The appellant as owner had evidently failed to take reasonable
care
(proposition (vii) of Swaran Singh) since he could not have been unmindful of
facts
which were within his knowledge.

9 In the circumstances, the direction by the Tribunal, confirmed by the High

Court, to pay and
recover cannot be faulted. The appeal is, accordingly,
dismissed. There shall be no order as
to costs.
 MANU/SC/0418/2021
35
Equivalent Citation: 2021 (2) C C C 232 , 2021 (2) C PR 396 , 2021 (2) KHC 472, 2021(2)TAC 353, 2021 (2) TNMAC 145

IN THE SUPREME COURT OF INDIA

Writ Petition (Civil) No. 534 of 2020 and I.A. No. 132263 of 2020
Decided On: 16.03.2021
Appellants: Bajaj Allianz General Insurance Company Pvt. Ltd.
Vs.
Respondent: Union of India (UOI) and Ors.
Hon'ble Judges/Coram:
Sanjay Kishan Kaul and R. Subhash Reddy, JJ.
JUDGMENT
Sanjay Kishan Kaul and R. Subhash Reddy, JJ.
1. We must notice at the inception that considerable work has occurred on account of
the inter se discussion between the stakeholders, coordinated by Mr. Jayant K. Sud,
learned ASG. We do appreciate the positive attitude of all the stakeholders to streamline
the process.
2 . It is now agreed as per table I of the note submitted by learned ASG that the
following agreed directions can be issued:
A. Accident Information Report--The jurisdictional police station shall report the
accident Under Section 158(6) of the Act (Section 159 post 2019 amendment)
(hereinafter "the report") to the Tribunal and insurer within first 48 hours either
over email or a dedicated website.
B. Detailed Accident Report--Police shall collect the documents relevant to the
accident and for computation of compensation and shall verify the information
and documents. These documents shall form part of the Report. It shall e-mail
the Report to the Tribunal and the insurer within three months. Similarly the
claimants may also be permitted to email the application for compensation with
supporting documents, Under Section 166 to the Tribunal and the insurer within
the same time.
C. The Tribunal shall issue summons alongwith the Report or the application for
compensation, as the case may be, to the insurer by e-mail.
D. The insurer shall e-mail their offer for settlement/response to the Report or
the application for claim to the Tribunal alongwith proof of service on the
claimants.
E. After passing the award, the Tribunal shall email an authenticated copy of
the award to the insurer.
F. The insurer shall satisfy the award by depositing the awarded amount into a
bank account maintained by the Tribunal by RTGS or NEFT. For this purpose the
Tribunal shall maintain a bank account and record the relevant account details

27-01-2022 (Page 1 of 2) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 along with the directions for payment to the insurer in the award itself.
G. Each Tribunal shall create an email ID peculiar to its jurisdiction for
receiving the emails from the police and the insurer as mentioned above.
Similarly, all insurer throughout India shall also create an e-mail ID peculiar to
the jurisdiction of each claim Tribunal. These email IDs would be prominently
displayed at Tribunal, the police stations and the office of the insurers for the
benefit of the claimants. Similarly, these e-mail IDS shall also be prominently
displayed on the website maintained by the Tribunal and the insurer.
H. Insurers shall appoint nodal officers for each Tribunal and provide their
contact details, phone and mobile phone numbers, and email address to
Director Generals of State Police and the Tribunals.
3. We direct that the aforesaid directions will apply across the country so that a uniform
practice is followed.
4. There are two other aspects which have been noted as under:
(I) Tamil Nadu and NCT of Delhi have already progressed from having email
accounts for submission of accident reports by the police to the Tribunal and
the insurer, to operating an online platform/website for submission of accident
report Under Section 159. These online platform/websites shall be suitably be
modified for submission of claimants' application for compensation Under
Section 166 of the Act as well insurers' response to the accident report or the
claim petition as the case may be.
(J) Each State having an independent online platform for submission of
accident reports, claims and responses to claims, will hamper efficient
adjudication of claims, especially where the victim of the accident is not a
resident of State where accident has occurred. Therefore, Central Government
shall develop an online platform accessible to the Tribunals, police authorities
and insurers throughout India.
5. In respect of the aforesaid matters, learned ASG states that some more time may be
required to work out the time period within which they can be implemented and the
necessary infrastructure for the same created for which some more discussions are
required.
6 . We are of the view that both (I) and (J) also liable to be implemented across the
country but in pursuance to the discussions brought before us, we will specify the time
period within which (I) and (J) have to be implemented.
List for further directions on 4.5.2021.
Learned Senior Counsel for the Petitioners Ms. Meenakshi Arora submits that
inadvertently while handing over the presences on 24.2.2021, the name of Mr. Jagdish
Solanki was included, who is Manager (Legal) and not an Advocate. She submits that
since Mr. Solanki has surrendered his Sanad, this mistake may cause some problem for
him. She assures us that in future while giving presences due care will be taken. The
presence in the order dated 24.2.2021 stands modified to the extent that the name of
Mr. Jagdish Solanki stands deleted from that order.
© Manupatra Information Solutions Pvt. Ltd.

27-01-2022 (Page 2 of 2) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 1 36
ITEM NO.10 COURT NO.6 SECTION X

S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS

Writ Petition(s)(Civil) No(s). 534/2020

BAJAJ ALLIANZ GENERAL INSURANCE COMPANY PRIVATE LTD.Petitioner(s)

VERSUS

UNION OF INDIA & ORS. Respondent(s)

(IA No. 52588/2020 - EX-PARTE AD-INTERIM RELIEF)

Date : 16-11-2021 The matter was called on for hearing today.

CORAM :
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON'BLE MR. JUSTICE M.M. SUNDRESH

Mr. N. Vijayaraghavan, AC
Mr. Vipin Nair, AOR

For Petitioner(s) Mr. Siddharth, AOR

Mr. Amit Kumar Agrawal, Adv.
Ms. Mamta Meghwal, Adv.

For Respondent(s) Mr. Jayant K. Sud, Ld. ASG

Ms. Garima Prashad,Sr. Adv.
Mr. M.K. Maroria, Adv.
Mr. Navanjay Mahapatra, Adv.
Mr. Bhuvan Mishra, Adv.
Mr. Sughosh Subramaniyam, Adv.
Mr. Manish, Adv.
Mr. Gurmeet Singh Makker, AOR
Mr. Amrish Kumar, AOR

Sikkim Mr. Vivek Kohli, Adv.Gen.

Mr. Sameer Abhyankar, AOR
Ms. Yeshi Rinchhen, Adv.
Mr. Abhinav Mishra, Adv.
Ms. Nishi Sangatani, Adv.

Chhattisgarh Mr. Sourav Roy, Dy. Adv. Gen.

Mr. Mahesh Kumar, Adv.
Mr. Vishal Sharma, Adv.
Mr. Prabudh Singh, Adv.
Ms. Devika Khanna, Adv.
Mrs. V.D. Khanna, Adv.
M/s VMZ Chambers

Andhra Pradesh Mr. Mahfooz Ahsan Nazki, AOR

 2

Mr. Polanki Gowtham, Adv.

Mr. Shaik Mohamad Haneef, Adv.
Mr. T. Vijaya Bhaskar Reddy, Adv.
Mr. K.V. Girish Chowdary, Adv.

Mr. Abhimanyu Tewari, AOR

Mr. Vmz Chambers, AOR

Goa Mr. Ravindra Lokhande, Adv.

Mr. Vijay S Khamkar, Adv.
Dr. Abhishek Atrey, AOR
Ms. Ambika Atrey, Adv.

Ms. Deepanwita Priyanka, AOR

Haryana Dr. Monika Gusain, AOR

Mr. Raj Kamal, AOR

Karnataka Mr. V. N. Raghupathy, AOR

Mr. Md. Apzal Ansari, Adv.

Kerala Mr. G. Prakash, AOR

Mr. Priyanka Prakash, Adv.
Ms. Beena Prakash, Adv.
Mr. Manan Sanghai, Adv.

Mr. Mukul Singh, Dy. Adv. Gen.

Mr. Pashupathi Nath Razdan, AOR
Mr. Yashraj Singh Bundela, Adv.
Ms. Sneh Bairwa, Adv.

Maharashtra Mr. Rahul Chitnis, Adv.

Mr. Sachin Patil, AOR
Mr. Aaditya A. Pande, Adv.
Mr. Geo Joseph, Adv.

Manipur Mr. Pukhrambam Ramesh Kumar, AOR

Ms. Anupama Ngangom, Adv.
Mr. Karun Sharma, Adv.

Meghalaya Mr. Avijit Mani Tripathi, AOR

Mr. Kynpham V. Kharlyngdoh, Adv.
Mr. T.K. Nayak, Adv.
Mr. Upendra Mishra, Adv.

Mizoram Mr. Siddhesh Kotwal, Adv.

Mr. Ana Upadhyay, Adv.
Ms. Manya Hasija, Adv.
Ms. Pragya Barsaiyan, Adv.
Mr. Akash Singh, Adv.
Mr. Nirnimesh Dube, AOR
 3

Nagaland Ms. K. Enatoli Sema, AOR

Ms. Chubalemla Chang, Adv.

Mr. Som Raj Choudhury, AOR

Mr. Vishal Meghwal, Adv.

Rajasthan Mr. Vishal Meghwal, Adv.
Mr. Milind Kumar, AOR

Mr. M. Yogesh Kanna, AOR

Telangana Mr. S. Udaya Kumar Sagar, AOR

Mr. Sweena Nair, Adv.
Mr. P. Mohith Rao, Adv.

Tripura Mr. Shuvodeep Roy, AOR

Mr. Kabir Shankar Bose, Adv.
Mr. Ishaan Borthakur, Adv.

Assam Mr. Shuvodeep Roy, AOR

Mr. Ishaan Borthakur, Adv.

Uttar Pradesh Mr. Pradeep Misra, AOR

Mr. Suraj Singh, Adv.
Mr. Yashasvi Virendra, Adv.
Mr. Bhuwan Chandra, Adv.
Mr. Manoj Kumar Sharma, Adv.

Andaman & Nicobar Ms. G. Indira, AOR

Admn.

GNCTD Mr. Chirag M. Shroff, AOR

Puducherry Mr. Aravindh S., AOR

GIC Ms. Archana Pathak Dave, AOR

Mr. Avnish Dave, Adv.
Mr. Parmod Kumar Vishnoi, Adv.
Ms. Vanya Gupta, Adv.

West Bengal Mr. Soumitra G. Chaudhuri, Adv.

Mr. Chanchal K Ganguli, AOR

Tamil Nadu Dr. Joseph Aristotle, AOR

Ms. Preeti Singh, Adv.
Ms. Ripul Swati Kumari, Adv.
Mr. Sanjeev Kumar Mahara, Adv.
 4

UPON hearing the counsel the Court made the following

O R D E R

We have perused the report dated 21.10.2021

submitted by Mr. Jayant K. Sud, learned Additional

Solicitor General in compliance of our order dated

03.08.2021 and he has made certain suggestions. He

has also sought directions from this Court. We

consider it appropriate to issue the following

directions:

i) A format for payment advised for remittance

of compensation has been devised and followed in the

Madras High Court and the Rajasthan High Court and

the same is extracted from the judgment of the

Madras High Court in Divisional Manager vs. Rajesh,

2016 SCC Online Mad. 1913, dated 11.03.2021. We

thus direct that the same format will be followed

across the country;

ii) A linked issue pointed out by Mr. N.

Vijayaraghavan, learned Amicus Curiae is that the

amounts deposited in the Tribunals are being

credited in savings account with the result that

there is accrued interest which keeps lying

unattended. The suggestion is that the amount

should be credited to a current account. We,

however, do not agree with this solution but are of

the view that the amounts should continue to be

 5

credited with the savings account to earn interest

but we deem it appropriate to issue a general

direction that whereever orders are passed for

disbursement of compensation to the beneficiaries,

any such interest would enure to the benefit of the

beneficiaries and would follow the principal amount;

iii) In order to put the liability of the

insurance company to an end, on deposit of the

amount, the insurance company/depositor will

communicate the factum of the deposit

forthwith/expeditiously to the concerned Motor

Vehicle Accident Claims Tribunal with a copy to the

beneficiary;

(iv) As far as the aspect of the issuance of

certificate on disability of victims is concerned,

it is reiterated that the guidelines laid down by

this Court in Raj Kumar v. Ajay Kumar and Anr.,

(2011) 1 SCC 343 mandatorily must be followed by the

MACTs, in respect of loss of income due to

injury/disablement. The District Medical Board is

also directed to follow the guidelines issued by the

Ministry of Social Justice and Empowerment,

Government of India vide Gazette Notification S. No.

61, dated 05.01.2018, for issuance of disability

Certificate in order to bring Pan India uniformity.

The consequence is that the MACT would ascertain

that permanent disability certificate issued by the

 6

District Medical Board or body authorized by it is

in accordance with the Gazette Notification alone.

Once the certificate is issued in this manner, the

same can be marked for purposes of being taken into

consideration as evidence without the necessity of

summoning the concerned witness to give formal proof

of the documents unless there is some reason for

suspicion on the document;

(v) The aspect of disparity in the Tax Deduction

at Source (TDS) certificate in Motor Accident

Claims, wherein from 10% to 20% dependent on whether

the claimants have a Pan Card or not can be

redressed by a direction that the Legal Services

Authority or any Agency/Mediation Group should

assist the claimant for obtaining a Pan Card, where

the claimant does not have one, in order to avoid

20% deduction of tax at source. The format of the

applications for compensation and motor accidents

claims is being modified by inserting the relevant

column just after the requirement to set out whether

the claimant is income tax assessee or not and

whether the claimant has a Pan Card or not and in

case has a Pan Card to provide the Pan No. and in

case the application is so pending, to provide the

application/Reference No. The formats of the

applications across the country be suitably amended

to facilitate this process.

 7

Learned Additional Solicitor General appears

to have addressed a communication in the larger

context to the Finance Minister and we would expect

the Finance Ministry to bestow urgent consideration

on the same;

vi) On the issue of the direction passed on

16.03.2021 for circulation of those directions to

the local Police stations, MACT Courts to improve

the efficiency, learned Additional Solicitor General

submits that on verification, it is found that only

13 States have complied with the same. There are 22

non-complying States and Union Territories in this

behalf which are as under :

S. NO. NATEM OF STATE

1. State of Chhattisgarh
2. State of Gujarat
3. State of Maharashtra
4. State of Meghalaya
5. State of Tamil Nadu
6. State of Telangana
7. U.T. of Delhi
8. State of Puducherry
9. State of Uttar Pradesh
10. State of Kerala
11. State of Karnataka
12. State of Andhra Pradesh
13. State of Himachal Pradesh
14. State of Bihar
15. State of Jharkhand
16. State of Madhya Pradesh
17. State of Sikkim
18. State of Uttarakhand
 8

19. U.T. of Daman and Diu and Dadra and

Nagar Haveli
20. U.T. of Jammu and Kashmir
21. U.T. of Ladakh
22. U.T. of Lakshadweep

In view of the recalcitrant attitude of the

States, we direct the Registrars General of the High

Courts of these States to ensure implementation and

submit a compliance report to Mr. Jayant K. Sud,

learned Additional Solicitor General, who would

thereafter inform us. It would also be appropriate

that the Registrars General would call upon the DGPs.

of each State to appoint a nodal officer for

submitting the status reports as and when called

upon to do so.

The Registrars General would also interact

with the Judicial Academy for conducting training

and awareness sessions periodically not only for the

Presiding Officers of the MACTs. but also Police

Officers, nodal persons of insurer,Presiding Officers

of Lok Adalat/ Online Mediation Group etc. to

enhance the awareness in implementation of the

directions;

(vii) On 03.08.2021, we were assured that all 26

insurance companies were on board to develop a common

mobile App. Learned counsel had entered appearance

for GIC and it appears that on enquiry by the learned

 9

Additional Solicitor General, a response was received

from the Secretary General of the GIC on 20.09.2021

now stating that the GIC was willing to develop a

mobile App. if certain specific directions were given

by this Court.

We do not appreciate this approach of the GIC

and the insurance companies. The directions dated

16.03.2021 and 03.08.2021 are comprehensive enough.

The insurance company cannot wriggle out of the

earlier directions. Either they are able to develop

it or we would call upon Government to develop an

App. which would have to be imposed on the insurance

companies. We thus direct the needful to be done

within a period of 2 months from today and do not

accede to the request of the learned counsel for

giving some enlarged time for the said purpose, more

so, on account of not having put forth the correct

position before this Court;

(viii) In respect of direction (VI) passed earlier

for the learned Additional Solicitor General to

look into the feasibility of withdrawing exemptions

given to the vehicles of the State Corporation(s) for

insurance, or in the alternative to create a

mechanism to ensure that a sufficient fund pool was

available with these corporations for meeting their

liabilities towards the claimants, learned Additional

 10

Solicitor General submits that on examination, it

has been found that it was not feasible to withdraw

the exemptions. If that be the position, then the

alternative must come into force to create a

mechanism to ensure that a sufficient fund pool is

available with these Corporations;

In respect of the aforesaid Mr. N.

Vijayaraghavan, Amicus Curiae has drawn our attention

to Section 146 of the Motor Vehicles Act, 1988,

which reads as under :

“146. Necessity for insurance against

third party risks.-(1) No person shall
use, except as a passenger, or cause or
allow any other person to use, a motor
vehicle in a public place, unless there
is in force, in relation to the use of
the vehicle by that person or that other
person, as the case may be, a policy of
insurance complying with the
requirements of this Chapter:

Provided that in the case of a

vehicle carrying, or meant to carry,
dangerous or hazardous goods, there
shall also be a policy of insurance
under the Public Liability Insurance
Act, 1991 (6 of 1991).

Explanation- For the purposes of this

sub-section, a person driving a motor
vehicle merely as a paid employee, while
there is in relation to the use of the
vehicle no such policy in force as is
required by this sub-section, shall not
be deemed to act in contravention of the
sub-section unless he knows or has
reason to believe that there is no such
policy in force.

(2) The provisions of sub-section(1)

shall not apply to any vehicle owned by
 11

the Central Government or a State

Government and used for purposes not
connected with any commercial
enterprise.

(3) The appropriate Government may, by

order, exempt from the operation of sub-
section(1), any vehicle owned by any of
the following authorities, namely:-

(a) the Central Government or a State

Government, if the vehicle is used for
purposes connected with any commercial
enterprise;

(b) any local authority;

(c) any State Transport Undertaking:

Provided that no such order shall be

made in relation to any such authority
unless a fund has been established and
is maintained by that authority in such
manner as may be prescribed by
appropriate Government.

Explanation- For the purposes of this

sub-section, “appropriate Government”
means the Central Government or a State
Government, as the case may be, and-

(i) in relation to any corporation

or company owned by the Central
Government or any State Government,
means the Central Government or that
State Government;

(ii) in relation to any corporation

or company owned by the Central
Government and one or more State
Governments, means the Central
Government;

(iii) in relation to any other State

Transport Undertaking or any local
authority, means that Government which
has control over that undertaking or
authority.”

A reading of the aforesaid provision makes it

clear that any exemption from operation of sub-

 12

Section (1) under sub-Section (3) of vehicles owned

by any of the authorities specified therein is

coupled with the proviso that no such order would be

made in relation to any such authority unless a fund

has been established and maintained by that

authority in such a manner as may be prescribed by

the appropriate Government.

The aforesaid being the position, we grant 3

months’ time to the appropriate Government to create

the funds to cover the requirement of disbursement of

compensation and initially the fund should consist of

at least as much is the liability which has arisen on

account of determination for the last 3 financial

years. In case, this is not so done, in view of the

provision as it stands, we direct that the exemption

benefit shall not be made available and the

authorities will not be able to claim such exemption.

This direction becomes necessary as sub-

Section (1) of Section 146 begins with the clause

that no person shall be entitled to use the vehicle

in the absence of the same and thus non-compliance

would amount to putting the vehicle on stand, and

(ix) In respect of direction (VII) for settlement

of motor accident claims through online Mediation,

it has been proposed by learned Additional Solicitor

General that consideration of this direction may be

 13

deferred for the time being as the Central Mediation

Act is in public domain which includes the process of

online mediation and objections/suggestions are

invited for the same. In fact, the illustration

available from the State of Maharashtra itself shows

that Motor Vehicles Act cases constitute 35% of the

break up of pending cases in a representative civil

cases in that State and that National Judicial Data

Grid reveals that 25% of the motor accident claims

are pending for 3 years or above before MACT. There

is also further appeal to the High Court. The ADR

methodology has been found to be extremely effective

in these cases. Some suggested directions have been

set out but since deferment is sought in this behalf

we will consider the same on the next date.

We categorically hold that all directions

passed today must be duly and properly implemented

and post implementation, the learned Additional

Solicitor General be informed.

List for further directions on 27.01.2022.

[CHARANJEET KAUR] [POONAM VAID]

ASTT. REGISTRAR-cum-PS COURT MASTER (NSH)
 37

2016 (0) AIJ-TN 1270725

Equivalent Citation(s):-2016 (1) TNMAC 433 : 2017 ACJ 253

MADRAS HIGH COURT

Hon'ble Judges:R.Sudhakar and S.Vaidyanathan JJ.

Oriental Insurance Company Limited, Kannur Versus Rajesh

Civil Miscellaneous Appeal No. 428 of 2016 ; *J.Date :- MARCH 11, 2016

MOTOR VEHICLES ACT, 1988 Section - 166, 168, 173

Law Points :- Motor Vehicles Act, 1988 - S.166 - S.168 - S.173 - Application for
Compensation - Award of the Claims Tribunal - Appeals.

HELD :-

Further, it is seen that the injured claimant is totally bed-ridden and almost in a vegetative
state. He is unable to eat, drink, bath, urinate or pass stools without the help of others. The
Disability Certi cate issued by Thalassery Medical Board vide Ex.P9 shows the permanent
disability of the claimant at 90%. The Calicut Medical Board assessed the permanent
disability of the claimant at 100%, as could be seen from Ex.P10. Also, the Tribunal, in its
judgment, has observed that when the Court had asked the brother of the claimant to bring
the claimant to Court for personal viewing of his condition, he was brought in an ambulance
laid in a stretcher and the claimant could only move his eye balls in response to any query.
Thus, the Tribunal taking note of the functional disability of the claimant at 100%, invoked
multiplier method to arrive at compensation towards "loss of income and loss of future
income". Placing reliance on the decision rendered in Sarla Verma (Smt) and others v. Delhi
Transport Corporation and another, (2009) 6 SCC 121, the Tribunal xed the multiplier to be
applied to the age of the claimant as '17'. Taking note of the condition of the claimant, this
Court is not inclined to interfere with the percentage of disability assessed by the Medical
Board at 100%. Also, we nd that the multiplier adopted is correct. (Para 12)
In ne, the quantum of compensation of a sum of Rs.64,86,620/- awarded by the Tribunal is
modi ed and the 1st respondent/claimant is entitled to a sum of Rs.57,28,000/- (Rupees
Fifty Seven Lakhs Twenty Eight Thousand only) as compensation. The interest xed by the
Tribunal at 7.5% per annum from the date of the petition till the date of deposit, is con rmed.
Break-up details of the revised award are as under: 308-B-.htm (Para 14)

Imp.Para: [ 12 ] [ 14 ]

Cases Referred To :
 1. Sarla Verma(Smt) V/s. Delhi Transport Corporation, 2009 6 SCC 121 : 2009 AIR SC
3104 : 2009 (6) Scale 129 : JT 2009 (6) 495 : 2009 (5) SCR 1098
2. United India Insurance Co. Ltd. V/s. Sagicor Capital Life Insurance Co. Ltd., 2013 2
CTC(Mad) 408

JUDGMENT :-

S.Vaidyanathan, J.

(1.) Heard the learned counsel for the appellant/Insurance Company and the learned
counsel appearing for the 1st respondent/claimant.

(2.) Challenging the quantum of compensation awarded by the Motor Accidents Claims
Tribunal, (Subordinate Judge), Mahe vide judgment dated 08.04.2015 in M.C.O.P. No.10 of
2013, the Insurance Company has come up with the present appeal.

(3.) In an accident which occurred on 27.09.2011, about 10.00 p.m., when the claimant,
Rajesh was riding his motorcycle bearing Registration No. KA 36 M 947 slowly and
cautiously on the extreme left side of the road near Mundayad Vaidyar Peedika stop at
Elayavur, a jeep bearing Registration No. KA 36 M 947 which was driven by its driver in a rash
and negligent manner, dashed against the claimant from the opposite side, due to which he
sustained grievous injuries. He was immediately taken to Pariyaram Medical College
Hospital, Pariyaram, Kannur for treatment. He was later referred to Tejasvini Hospital,
Mangalore for further treatment. Due to the accident, the claimant became permanently
disabled and totally bed-ridden. The Kannur Traffic Police registered a case in Crime
No.788/2011 against the jeep driver. Stating that he has to continue the rest of his life in bed
with the help of an attendant, and alleging that the driver of the jeep and the
appellant/Insurance Company, being the insurer of the jeep are jointly liable to pay
compensation, the claimant filed a claim petition seeking a sum of Rs.45,00,000/- as
compensation.

(4.) The appellant/Insurance Company resisted the claim petition before the Tribunal mainly
questioning the rash and negligent driving of the claimant.

(5.) Before the Tribunal, in support of the claim, one K.K.Rameshan, brother of the claimant
was examined as P.W.1; one Dr.Udayakumar was examined as P.W.2; one Mr.Muraleedharan
was examined as P.W.3 and Mr.Hariharadas, employer of the claimant was examined as
P.W.4. Exs.P1 to P13 and Exs.X1 to X4 were marked, the details of which are as follows:

Ex.P-1 Copy of F.I.R., dated 13.10.2013.

Ex.P-2 Treatment Certificate, dated 13.10.2013.

Ex.P-3 Discharge Summary, (Series) (6 Nos.).

Ex.P-4 Medical Prescriptions (Series) (43 Nos.).

Ex.P-5 Medical Bills for Rs.3,47,830/- (Series) (337 Nos.).

Ex.P-6 Physiotherapy Bills for Rs.75,040/- (Series) (15 Nos.).

Ex.P-7 Ambulance charge receipts for Rs.96,250/- (Series) (24 Nos.).

s

Ex.P-8 Home Nurse Charge Receipts for Rs.3,27,500/- (Series) (36 Nos.).

Ex.P-9 Disability Certificate issued by Superintendent, District Disability Assessment

Board, General Hospital, Thalassery, dated 03.04.2013.

Ex.P-10 Disability Certificate issued by Dr.Latha Gagar, dated 13.12.2013.

Ex.P-11 Attested photocopies of petitioner's educational qualification certificates

(Series) (4 Nos.).

Ex.P-12 Salary Certificate, dated 01.09.2011.

Ex.P-13 Power of attorney executed by the petitioner in favour of his brother

Rameshan, K.K., dated 21.08.2013.

Ex.X-1 Registration Certificate issued by Central Excise and Customs Department,

dated 05.11.2008.

Ex.X-2 Salary Details of P.W.4's employees which is submitted to Income Tax

Department, dated 20.03.2012.

Ex.X-3 Photographs of Rajesh (5 Nos.), CD and Bill.

Ex.X-4 Permanent Disability Certificate issued by Medical College Hospital, Calicut,

dated 26.02.2015.

On the side of the appellant/Insurance Company, no witness was examined and no

document was marked.

(6.) Taking note of the oral evidence of P.W.1, the elder brother of the injured claimant and
Ex.P1 - F.I.R. as also the corroborative evidence of P.W.3 - eye-witness to the accident, the
Tribunal, came to the conclusion that the accident took place due to the rash and negligent
driving of the driver of the Jeep bearing Registration No. KA 36 M 947 and awarded a sum of
Rs.64,86,620/- as compensation to the claimant with interest at 7.5% per annum from the
date of filing of the claim petition till the date of deposit, under the following heads:

Loss of income and future income Rs. 45,90,000.00

   
Extra nourishment and attendant Rs. 750,000.00
charges
 
 
Medical expenses Rs. 7,50,370.00

   
 Transportation charges Rs. 96,250.00

   
Pain and suffering Rs. 72,00,000.00

   
Loss of amenities Rs. 1,00,000.00

   
Loss of marriage prospects Rs. 1,00,000.00

   
Loss of expectancy of life Rs. 71,00,000.00

   
Future medical expenses Rs. 75,00,000.00

   
Total compensation Rs. 764,86,620.00

   
 

Challenging the said award that it is exorbitant, the Insurance Company has come up with
the present appeal.

(7.) Learned counsel for the appellant/Insurance Company would strenuously contend that
the Tribunal erred in fixing the monthly salary of the injured at Rs.15,000/- without making
any deduction towards allowance. It is also his contention that the pecuniary loss assessed
at Rs.45,90,000/- is unwarranted.

(8.) On the other hand, learned counsel appearing for the 1st respondent/claimant would
submit that the award of the Tribunal is just and reasonable in view of the grievous injuries
sustained by the claimant.

(9.) Heard the submissions made by the learned counsel on either side and gone through the
materials available on record.

(10.) A perusal of the Secondary School Leaving Certificate of the claimant marked vide
Ex.P11 would show the date of birth of the injured claimant as 30.12.1985, thereby, it is clear
that the claimant was aged 26 years at the time of accident. Also, a perusal of the Salary
Certificate of the claimant marked vide Ex.P12 and taking note of the evidence of his
employer viz. one Hariharadas, examined as P.W.4, it is seen that the injured claimant was
paid a Basic Pay of Rs.7,500/- and Rs.7,500/- towards other allowances. Further, the said
employer of the injured also produced Tax Deduction at Sources (TDS) statement (Ex.X2) for
the Assessment Year 2011-2012 of his employees, which includes the name of the claimant
also. While calculating compensation towards "loss of income" and "loss of future income",
the Tribunal took the monthly income of the injured claimant at Rs.15,000/- and adding 50%
of the same towards future prospects, i.e. a sum of Rs. 7,500/-, arrived at a sum of Rs.
22,500/-.
(11.) The Insurance Company has mainly disputed that no amount was deducted from the
monthly income of the injured claimant towards allowance. In view of the said contention,
this Court is inclined to fix a sum of Rs.13,500/- as the monthly income of the injured
claimant and adding 50% of the same towards future prospects, i.e. a sum of Rs.6,750/- to it,
a sum of Rs. 20,250/- is taken as the total monthly income of the claimant.

(12.) Further, it is seen that the injured claimant is totally bed-ridden and almost in a
vegetative state. He is unable to eat, drink, bath, urinate or pass stools without the help of
others. The Disability Certificate issued by Thalassery Medical Board vide Ex.P9 shows the
permanent disability of the claimant at 90%. The Calicut Medical Board assessed the
permanent disability of the claimant at 100%, as could be seen from Ex.P10. Also, the
Tribunal, in its judgment, has observed that when the Court had asked the brother of the
claimant to bring the claimant to Court for personal viewing of his condition, he was brought
in an ambulance laid in a stretcher and the claimant could only move his eye balls in
response to any query. Thus, the Tribunal taking note of the functional disability of the
claimant at 100%, invoked multiplier method to arrive at compensation towards "loss of
income and loss of future income". Placing reliance on the decision rendered in Sarla Verma
(Smt) and others v. Delhi Transport Corporation and another, (2009) 6 SCC 121, the Tribunal
fixed the multiplier to be applied to the age of the claimant as '17'. Taking note of the
condition of the claimant, this Court is not inclined to interfere with the percentage of
disability assessed by the Medical Board at 100%. Also, we find that the multiplier adopted is
correct.

(13.) Thus, taking the monthly income of the injured claimant at Rs.20,250/- and applying the
multiplier of '17', the revised compensation towards "loss of income and loss of future
income" is arrived at a sum of Rs.41,31,000/- (Rs.20,250/- x 12 x '17'). Coming to the head
'Future medical expenses', this Court is inclined to reduce the compensation and
accordingly, it is reduced from Rs.5,00,000/- to Rs.2,00,000/-. As far as the compensation
awarded under other heads are concerned, this Court is of the view that they are just and
reasonable and accordingly, they are confirmed.

(14.) In fine, the quantum of compensation of a sum of Rs.64,86,620/- awarded by the

Tribunal is modified and the 1st respondent/claimant is entitled to a sum of Rs.57,28,000/-
(Rupees Fifty Seven Lakhs Twenty Eight Thousand only) as compensation. The interest fixed
by the Tribunal at 7.5% per annum from the date of the petition till the date of deposit, is
confirmed. Break-up details of the revised award are as under:

Heads Award of the Revised Award of this

Tribunal Court
 
   
Loss of income and future Rs. 45,90,000.00 Rs. 41,31,000.00
income
   
 
Extra nourishment and Rs. 50,000.00 Rs. 50,000.00
attendant charges
   
 
Medical expenses Rs. 7,50,370.00 Rs. 7,50,370.00

     
Transportation charges Rs. 96,250.00 Rs. 96,250.00

     
Pain and suffering Rs. 2,00,000.00 Rs. 2,00,000.00

     
Loss of amenities Rs. 1,00,000.00 Rs. 1,00,000.00

     
Loss of marriage prospects Rs. 1,00,000.00 Rs. 1,00,000.00

     
Loss of expectancy of life Rs. 1,00,000.00 Rs. 1,00,000.00

     
Future medical expenses Rs. 5,00,000.00 Rs. 2,00,000.00

     
Total compensation Rs. 64,86,620.00 Rs. 57,27,620.00 r/off
to Rs. 57,28,000.00
   

(15.) The appellant/Insurance Company is directed to deposit the entire amount awarded by
this Court, less the amount already deposited, along with accrued interest to the credit of
M.C.O.P.No.10 of 2013 on the file of the Motor Accidents Claims Tribunal (Subordinate
Judge), Mahe, within a period of eight (8) weeks from the date of receipt a copy of this
judgment. On such deposit being made, the 1st respondent/claimant is permitted to
withdraw the amount, as per the award. It is also made clear that the award amount shall be
paid to the claimant by the Tribunal in the form of a crossed Account Payee Cheque,
favouring only the claimant and it should not be issued in favour of any other
person/Company.

The Civil Miscellaneous Appeal is partly allowed with the above observation.
Consequently, connected C.M.P. No.3143 of 2016 is closed. No costs.
To
The
Subordinate Judge,
Motor Accidents Claims Tribunal, Mahe.
C.M.A. No.428 of 2016

R.Sudhakar, J.

(16.) I have gone through the judgment on the merits of the case. I concur with the same.
However, there is another aspect to the case which needs to be addressed as it relates to
travails of claimants/dependants seeking compensation before Claims Tribunals. Over the
years, we are tormented by cries of claimants/dependants that just compensation awarded
by Compensation Forum is difficult to realize.

(17.) In a country where legal awareness is wanting despite best efforts by the Legal
Services Authority and other legal forums, we find that the victims/dependants are unable to
realise the fruit of judicial decisions granting "just compensation" for years together. The
shackles of procedures weigh heavy, as is their heart. This we thought should be addressed
to subserve the larger interest of claimants/dependants.
(18.) The population of our country is growing at a much faster pace than other countries
and along with that there is industrial growth which fuels the sale of millions and millions of
vehicles. Given the fact that there is very little sense or sensibility to road etiquettes, there is
an alarming rise in the road accidents every year. The percentage of accidents is growing in
alarming proportion and the Government despite putting in best efforts is not able to contain
the road accidents or deaths. We are given to understand that an average number of 300
persons die on a single day, that is to say 10 persons in an hour. Underaged drivers are also
contributors for this increase in the road accidents. According to Section 4(1) of the Motor
Vehicles Act, "No person under the age of 18 years shall drive a motor vehicle in any public
place. Provided that a motorcycle with engine capacity not exceeding 50 cc may be driven in
a public place by a person after attaining the age of 16 years." With all major automobile
manufacturers having stopped production of vehicles with an engine capacity below 50cc,
many youngsters and students ride two-wheelers having higher engine capacity contributing
to the alarming increase in the number of accidents. Parents should be sensitised to the
need for preventing minors from taking the risk of using two-wheelers. The lack of road
sense and failure to adopt safety measures, including wearing of helmets, is causing
immense pain both to the injured claimants as well as the relatives of victims. While the
judicial system is endeavouring to provide speedy justice and early disbursal of such
compensation, it has also to play a major role in ensuring that the compensation reaches the
victims/claimants without undue delay and without there being any form of digression of
compensation.

(19.) Section 168 of the Motor Vehicles Act, 1988 provides that the claims tribunal should
award just compensation. What may be just in judicial order does not reach the hands of the
victims/claimants. Courts cannot be a mute spectator to dissipation of the compensation to
the benefit of and at the hands of third parties. It is failure of justice if just compensation
does not reach those victims/claimants.

(20.) Whenever adalats are conducted, the poor victims/claimants come to District Courts
and High Court lamenting for just compensation stating that they are unable to enjoy the
fruit of the award. What reaches them by quirk of fate is a pittance. There is a mandate on
the Claims Tribunal to deposit the award amount in a Nationalised Bank. Payment out is
ordered and cheques are issued to the victims/claimants. These cheques pass through
various sieves known and unknown and ultimately, it does not reach the victims/claimants in
full measure, less legal expenses and other costs that are justifiable. It was brought to our
notice by the Chief Judge, Court of Small Causes and the Registry that in the present
system, the insurance companies deposits the cheques with the Claims Tribunal concerned,
which in turn deposits the same with the Treasury, and thereafter, it is transferred from the
Treasury to a Nationalised Bank by way of fixed deposit. It is thereafter withdrawn for the
purpose of settling the award amount. This process consumes a lot of time and leads to
delay in disbursal of the award amount. It was stated that this leads to unwanted heart
burns at certain quarters and the benefit of the award does not reach the claimants/victims
directly in full proportion. The delay in this process, it is stated, is felt more in the Districts.
We, inter alia, seek to address the said issue also by way of these directions. We have
discussed the issue with counsel for insurance companies, counsel for claimants, Bank
Manager, representatives of insurance companies, etc.

(21.) It is pointed out by many well-intended members of the bar appearing on either side
that in motor accident claims cases crossed cheques are issued bearing an endorsement "&
Co." instead of "Account Payee". When "& Co." endorsement is made on a cheque, there is a
provision where the cheque can be endorsed in the name of another person. Therefore, the
amount specified in the cheque will be deposited in the name of another person. By virtue of
"& Co." endorsement, he will withdraw the amount and take whatever is his requirement and
pay over the balance to the victims/ claimants. In effect, the victim/claimant does not get
the full compensation awarded by the Claims Tribunal. By judgment dated 23.2.2016 made
in C.M.A. No.3384 of 2014, this Court directed that cheques should be crossed with the
endorsement "A/c Payee".

(22.) We are alive to the fact that large number of victims/claimants are illiterates or
uneducated and they are unable to wade through the justice delivery system. They become
victims of delayed compensation and settle for lesser compensation as against recipient of
just compensation. In some cases, it has come to our notice that the victims/claimants have
to open bank accounts at a different place outside their jurisdiction only for the purpose of
realising the proceeds of the claims tribunal to settle legal costs and expenses. These
illiterate victims/claimants are unable to say no to such arrangements as they are
desperately looking for the compensation.

(23.) The above said difficulty can be mitigated if the victims/claimants are called upon to
furnish bank account and PAN Card details, if available, so as to ensure that the
compensation is deposited in the existing bank accounts of the victims/claimants in their
own territory. It also has another advantage, whereby the compensation awarded can be
transferred to the bank account of the victims/claimants through the presently available
computerized system, namely, Real Time Gross Settlement (RTGS) or National Electronic
Fund Transfer (NEFT), which is slowly becoming very popular for transfer of funds
throughout the country. These methods could be used for transfer of the funds to the Claims
Tribunals in relation to the cases in question and thereafter by Direct Benefit or Bank
Transfer (DBT) the funds can be electronically transferred to the bank accounts of the
victims/claimants, as the case may be.

(24.) On following the above procedure, the requirement of deduction of tax in terms of
Section 194A of Income Tax, 1961 can also be complied with, that is to say 10% deduction in
case of PAN Card holders and 20% deduction in the case of persons who do not hold PAN
Cards. In fact, the victims/claimants will stand to gain if erroneously higher deduction is not
made. This method will ensure that if there is a Direct Benefit or Bank Transfer to the
account of the victim/claimant, tax deduction at source will be made. The victims/claimants
will not be compelled to open a new account for the purpose of realising compensation
cheque. It will also avoid third party interference while receiving of compensation and also
give them the benefit of operating the account in their own territory. It will ensure that these
victims/claimants are not at the mercy of third parties at the time of receipt of
compensation.

(25.) With the rise in population and rise in litigation new challenges are thrown to Courts
and all stakeholders. Computerization and modernisation of Courts play a big role in
reducing the burden of paper and physical handling of men and matter. One such instance
that could be quoted was a suggestion made by me as a Single Judge of this Court, where I
passed a judicial order dispensing with filing of judicial stamps papers in high value suits
and proceedings by way of payment of Court fees via e-stamping United India Insurance Co.
Ltd. v. Sagicor Capital Life Insurance Co. Ltd. and Another, 2013 (2) CTC 408 (Mad.). The
said suggestion was primarily intended to ensure that large bundles of stamp papers are not
stacked along with the suits and other proceedings, as it has no relevance after it is defaced.
Reams and reams of valuable paper can be saved and to that extent it would save the trees.
The second reason for choosing such option of e-stamping was that it will avoid misuse of
used stamp papers by pulling out a bunch from the huge stock of judicial papers for
instituting another suit. On the request made by the Court, the Chief Justice, on the
administrative side, accepted it and the Government by vide LA Bill No.1 of 2015, dated
18.2.2016 amended the provisions of the Tamil Nadu Court Fees and Suits Valuation Act,
1956 to incorporate payment of Court fees via e-stamps also. This will ensure that there are
no complaints that (i) the correct court fee was not paid; (ii) stamp paper money was
misused; (iii) loss of stamp papers in courts.

(26.) Considering all the above factors, with the intention to safeguard the interest of the
victims/claimants and to ensure that the victims/claimants get full compensation, less the
legal costs, certain directions need be issued to the Tribunals to scrupulously follow. The
following directions are issued for the benefit of the victims/claimants.

PROCEDURE BEFORE PASSING AWARD

(i) The Claims Tribunals shall without exception, at the time of commencement of trial
and evidence on the side of claimants, obtain and ensure that the bank account details
of all the claimants as follows:
 1. Name of the claimant(s)/ victim(s)
with address
 
 
2. Name of the Bank & Branch

   
3. Bank IFSC Code

   
4. Account No(s). of the
claimant(s)/victim(s)
 
 
 

The first page of the bank pass-book, which will compulsorily contain the
photograph of the claimant(s)/victim(s), duly attested by the Bank concerned,
should be made available. Wherever the claimant(s)/victim(s) are impleaded as
respondents, before the claims tribunal or the Court, their account details, as
above, will have to be furnished.

(ii) In case after disclosure of the bank account details before the Claims Tribunal in
terms of Clause (i), a new person is added in the account for any reason whatsoever, it
is incumbent on the part of the claimant/victim to disclose the same to the Claims
Tribunal, indicating the relationship of the newly added person to the claimant/victim
and the purpose.

(iii)The Claims Tribunals shall also obtain and ensure the marking of Pan Card of all the
claimants, wherever available.

(iv)If the claimant/victim does not have a Pan Card, the Claims Tribunal shall
endeavour to advise the claimant/victim about the importance of having such a card,
namely, to avoid higher Tax Deduction at Source, for their own benefit, before
conclusion of trial. For this purpose, the District Legal Services Authorities and Taluk
Legal Services Authorities can facilitate and provide assistance.

(v) The Claims Tribunals may verify and confirm if the claimant/ victim has an Aadhaar
card, and if there is one, he/she may be called upon to mark a self attested copy of the
Aadhaar Card.

(vi)In case of minor claimants, their bank account details should be obtained and
marked. The name of the guardian has to be specified.

(vii)The Claims Tribunals shall ensure compliance of clause (i) above, before
conclusion of trial.
PROCEDURE AFTER PASSING AWARD

(viii)The Claims Tribunals shall, as a matter of rule, direct the insurance companies or
transport corporations or such other entities held liable to pay the compensation, to
deposit the award sum to the credit of the bank account of the Claims Tribunal directly
by NEFT or RTGS mode. The Registry will issue appropriate directions in this regard
enabling the respective Claims Tribunal or the District Court concerned to open
separate account, which will bear a suffix "MACT" to identify that the account is in
relation to motor accident claims.

(ix) The Insurance Companies and Transport Corporations shall instruct their banks to
ensure deposit of the award sums by way of Direct Bank Transfer to the specified bank
account of the Claims Tribunal containing the following information in the prescribed
format, by way of compliance of the award.

1. MCOP Number
 
   
 
2. On the file of (Claims Tribunal
Name)  
 
   
3. Date of award
 
   
 
4. Compensation Amount
 
   
 
5. Income Tax Deduction at Source
 
   
 
6. Bank Transaction Reference
No./Unique Transaction Reference  
  (UTR) No.

(x) In turn, the bank of the Claims Tribunal shall receive the deposited sum and capture
the above information and furnish a statement of account on a daily basis to the
Registry of the Claims Tribunal to enable the said Registry to reconcile the deposits of
compensation and the respective MCOPs towards which such deposits were made.

(xi) On such deposits being made, the insurance companies and transport corporations
shall submit a letter to the Registry of the Claims Tribunal enclosing a copy of the said
bank advice, in prescribed format as above, as per which the deposit was made to the
bank account of the Claims Tribunal, to enable the Claims Tribunal to keep tab on the
deposits made and the MCOPs for which they were made, which is a fundamental need
for a smooth implementation of this well intentioned scheme. The Payment advice for
remittance of compensation is as under:

PAYMENT ADVICE FOR REMITTANCE OF COMPENSATION

 From:

............ Bank

...................

To:

............... Court

........................

We confirm remittance of compensation as follows on instructions of

.......... (insurance company/transport corporation):-

1. MCOP Number

 
   
 
2. On the file of (Claims Tribunal

Name), Place  
 
   
3. Date of Award

 
   
 
4. Amount deposited

 
   
 
5. Income Tax Deduction at

Source, if any  
 
   
6. Unique Transaction Reference

(UTR) No.  
 
 

(xii)The Insurance Companies, Transport Corporations and such other entities making
such deposit, shall also send a copy of the payment advice in Clause (ix) to the Claims
Tribunal concerned and serve a copy of the same on the claimants or their counsel as
the case may be.

(xiii) Insofar as tax deduction at source is concerned, Form 16-A of the IT Act should be
provided to the claimant/victim on whose behalf the deduction has been made so as to
enable him/her to seek refund of tax deducted.

(xiv) The Claims Tribunals shall ensure that the benefit of details of such bank account
of the Claims Tribunal concerned are identified in the award itself, for compliance by
those required to satisfy the award.
 (xv) The Claims Tribunals shall ensure that as and when an order is passed for
disbursal of compensation amount, it will ensure that such disbursal of compensation
shall be made directly to the credit of the bank account of the claimant/victim, as the
case may by NEFT or RTGS. The bank account details of the claimant/victim(s) shall
be stated in the award/order of the Claims Tribunal.

(xvi) The Claims Tribunals shall, in case of minor claimants, retain the amounts in court
deposit until they attain majority. Thereafter, the Claims Tribunal shall ensure deposit of
their shares by Direct Bank/Benefit Transfers to the accounts of the parties, who were
minors. Wherever the Claims Tribunal feels it appropriate to direct withdrawal of
interest for the benefit of the minor, interest shall be paid by direct transfer to the
account of the minor.

(xvii) The Claims Tribunals shall also ensure that in case the claimant or claimants die
pending proceedings and legal representatives are brought on record, the same
procedure as above in respect of claimants shall be strictly adhered to in respect of
impleaded legal representatives also.

(xviii) The Claims Tribunals shall also ensure that in case of compromise being
recorded in Lok Adalat proceedings, at the time of such compromise, the details of
bank accounts, Pan Card (if available) of the claimant or claimants and/or legal
representatives shall also be obtained and disbursal of the amount compromised shall
also be only by way of NEFT/RTGS. In cases where the claimants or victims have
Adhaar Cards, a self attested copy of the same may also be obtained.

(xix) The High Court Registry is directed to place the matter before the Hon'ble Chief
Justice so that appropriate circular can be issued to all the District Judges and the
Claims Tribunals to publish the above interdict, as it needs to be widely publicized and
displayed in the notice board and also by way of intimation to insurance companies,
transport corporations and other departments that they are required to follow these
instructions.

(xx) The District Judges concerned shall ensure strict compliance of the above
directions.

(xxi) The Claims Tribunals are hereby instructed to abide by the above direction without
any let or hindrance, scrupulously and in case they find any procedural difficulty while
implementing the same, it can be brought to the attention of this Court through the
Registry.

(xxii) We hereby hold that these directions shall come into force for strict
implementation and compliance on and from 1.8.2016 so as to enable the Claims
Tribunal concerned to take suitable steps and provide the logistics for complying with
the above directions.

(xxiii)A flow chart depicting the mode in which the transactions, namely deposit and
payment of compensation, are to be made is annexed to this judgment.

(27.) We record our appreciation for the fairness on the part of the members of the legal
fraternity in assisting the Court to formulate the guidelines/directions to serve the cause of
justice, more particularly to innocent and illiterate victims/claimants. We record our
appreciation to the efforts put in by (i) Mr.N.Vijayaraghavan; (ii) Mr.S.Arun Kumar; (iii)
Mr.M.B.Raghavan and other advocates; the Bank Manager, Indian Bank and Officers of the
Small Causes Court.

(28.) It is our earnest plea to all the stakeholders like insurance companies, transport
corporations and Government undertakings, as also the members of the legal fraternity, and
the banks to ensure that the above directions are strictly complied with taking into
consideration the overall interest of the victims/claimants, who are more often coming from
the lower strata of society, economically impoverished and suffering further misery due to
the injury that is caused due to the road accident or the death of the breadwinner, as the
case may be. With fond hope we wish to alleviate the pain and suffering, distress and
trauma which they face post the accident on the aspect of just compensation.

(29.) After considering the effectiveness of the above said procedure, it can be implemented
in respect of all other cases involving such bank transactions. For instance cases pertaining
to land acquisition, rent control, family court, etc., besides execution petitions, can follow the
above procedure.

R.Sudhakar, J.

(30.) I agree.
Licensed to :- Gujarat State Judicial Academy [Client Code :- 5020]

38
LAWS(SC)-2021-8-72
SUPREME COURT OF INDIA
Coram : Uday Umesh Lalit,AJAY RASTOGI JJ.
Decided On : August 06,2021
Appeal Type : CIVIL APPEAL NO. 4634 OF 2021 (Arising out of S.L.P. (Civil) No.26687 of 2018)
Appellants :
NEW INDIA ASSURANCE
Vs.
Respondents :
Urmila Shukla

Advocates :
VIRESH B.SAHARYA,C.K.Gola,Abhishek Gola,SHARVE SINGH,GAURAV,Pradeep
Misra,SURAJ SINGH,MANOJ KUMAR SHARMA,Bhuwan Chandra,ANNAM D.N.RAO

Equivalent Citation :
LAWS(SC)-2021-8-72, ALD(SC)-2021-5-124, ACJ-2021-0-2081, RCR(CIVIL)-2021-3-758

Referred Judgement :
SARLA VERMA VS. DELHI TRANSPORT CORPORATION, [2009 6 SCC 121] [REFERRED TO]
RESHMA KUMARI VS. MADAN MOHAN, [2013 9 SCC 65] [REFERRED TO]
NATIONAL INSURANCE COMPANY LIMITED VS. PRANAY SETHI, [2017 16 SCC 680]
[REFERRED TO]

Referred Act :
MOTOR VEHICLES ACT, 1988, S.168
UTTAR PRADESH MOTOR VEHICLES RULES, 1998, R.220A

JUDGMENT :

UDAY U.LALIT,J.
UDAY U.LALIT,J.
(1.) Leave granted.

(2.) This appeal challenges the judgment and order dated 24.04.2018 passed by the High Court of
Judicature at Allahabad dismissing First
Appeal No. 2129 of 2018. Said appeal was preferred by the present
appellant challenging the determination by Motor Accidents Claim
Tribunal, Allahabad ("the Tribunal", for short) vide its award dated

Page 1 of 6 Copyright © 2022 by Regent Computronics Private Limited - (www.the-laws.com)

Licensed to :- Gujarat State Judicial Academy [Client Code :- 5020]

17.01.2018, whereby compensation in the sum of Rs.24,43,432/- was awarded with 7% interest, while
considering the claim in respect of an
accident which resulted in the death of one Jairam Shukla.

(3.) While assessing the compensation, reliance was placed by the Tribunal on Rule 220A of the U.P.
Motor Vehicles Rules, 1998 ("the Rules"
for short). For the present purposes, we are concerned with Rule 3(iii) of
the Rules which is to the following effect:

"(3) The future prospects of a deceased, shall be added in the actual salary or minimum wages
of the deceased as under:

(iii) More than 50 years of age: 20% of the salary."

(4.) The basic ground of challenge by the appellant is that sub-rule 3(iii) of Rule 220A is contrary to
the conclusions arrived at by the Constitution
Bench of this Court in National Insurance Company. Ltd. vs. Pranay Sethi
reported in (2017) 16 SCC 680 ("Pranay Sethi", for short).

(5.) Considering the importance of the questions involved, this Court appointed Mr. A.D.N. Rao,
learned Advocate to assist the Court as Amicus
Curiae.

(6.) Mr. Rao has submitted a note which states that apart from the State of U.P. similar provision exists
in the State of Uttarakhand which had
adopted the Rules in its application to that State after reorganization.

(7.) Mr. Rao has invited our attention to the decision of this Court in Pranay Sethi and specially
paragraphs 31 and 55 to 58 which for facility
are quoted hereunder:

"31. Though we have devoted some space in analyzing the precedential value of the
judgments, that is not the thrust of the controversy. We are required to keenly dwell upon the heart of
the issue that emerges for consideration. The seminal controversy before us relates to the issue where
the deceased was self-employed or was a person on fixed salary without provision for annual
increment, etc., what should be the addition as regards the future prospects. In Sarla Verma [Sarla
Verma v. DTC, (2009) 6 SCC 121 : (2009) 2 SCC (Civ) 770 : (2009) 2 SCC (Cri) 1002], the Court has
made it as a rule that 50% of actual salary could be added if the deceased had a permanent job and if
the age of the deceased is between 40-50 years and no addition to be made if the deceased was more
than 50 years. It is further ruled that where deceased was self-employed or had a fixed salary (without
provision for annual increment, etc.) the courts will usually take only the actual income at the time of
death and the departure is permissible only in rare and exceptional cases involving special
circumstances.

Page 2 of 6 Copyright © 2022 by Regent Computronics Private Limited - (www.the-laws.com)

Licensed to :- Gujarat State Judicial Academy [Client Code :- 5020]

55. Section 168 of the Act deals with the concept of "just compensation" and the same has to
be determined on the foundation of fairness, reasonableness and equitability on acceptable legal
standard because such determination can never be in arithmetical exactitude. It can never be perfect.

The aim is to achieve an acceptable degree of proximity to arithmetical precision on the basis
of materials brought on record in an individual case. The conception of "just compensation" has to be
viewed through the prism of fairness, reasonableness and non-violation of the principle of equitability.
In a case of death, the legal heirs of the claimants cannot expect a windfall. Simultaneously, the
compensation granted cannot be an apology for compensation. It cannot be a pittance. Though the
discretion vested in the tribunal is quite wide, yet it is obligatory on the part of the tribunal to be
guided by the expression, that is, "just compensation". The determination has to be on the foundation
of evidence brought on record as regards the age and income of the deceased and thereafter the
apposite multiplier to be applied. The formula relating to multiplier has been clearly stated in Sarla
Verma [Sarla Verma v. DTC, (2009) 6 SCC 121 : (2009) 2 SCC (Civ) 770 : (2009) 2 SCC (Cri) 1002]
and it has been approved in Reshma Kumari [Reshma Kumari v. Madan Mohan, (2013) 9 SCC 65 :
(2013) 4 SCC (Civ) 191 : (2013) 3 SCC (Cri) 826] . The age and income, as stated earlier, have to be
established by adducing evidence. The tribunal and the courts have to bear in mind that the basic
principle lies in pragmatic computation which is in proximity to reality. It is a well-accepted norm that
money cannot substitute a life lost but an effort has to be made for grant of just compensation having
uniformity of approach. There has to be a balance between the two extremes, that is, a windfall and the
pittance, a bonanza and the modicum. In such an adjudication, the duty of the tribunal and the courts is
difficult and hence, an endeavour has been made by this Court for standardisation which in its ambit
includes addition of future prospects on the proven income at present. As far as future prospects are
concerned, there has been standardisation keeping in view the principle of certainty, stability and
consistency. We approve the principle of "standardisation" so that a specific and certain multiplicand
is determined for applying the multiplier on the basis of age.

56. The seminal issue is the fixation of future prospects in cases of deceased who are self-
employed or on a fixed salary. Sarla Verma [Sarla Verma v. DTC, (2009) 6 SCC 121 : (2009) 2 SCC
(Civ) 770 : (2009) 2 SCC (Cri) 1002] has carved out an exception permitting the claimants to bring
materials on record to get the benefit of addition of future prospects. It has not, per se, allowed any
future prospects in respect of the said category.

57. Having bestowed our anxious consideration, we are disposed to think when we accept the
principle of standardisation, there is really no rationale not to apply the said principle to the self-
employed or a person who is on a fixed salary. To follow the doctrine of actual income at the time of
death and not to add any amount with regard to future prospects to the income for the purpose of
determination of multiplicand would be unjust. The determination of income while computing
compensation has to include future prospects so that the method will come within the ambit and sweep

Page 3 of 6 Copyright © 2022 by Regent Computronics Private Limited - (www.the-laws.com)

Licensed to :- Gujarat State Judicial Academy [Client Code :- 5020]

of just compensation as postulated under Section 168 of the Act. In case of a deceased who had held a
permanent job with inbuilt grant of annual increment, there is an acceptable certainty. But to state that
the legal representatives of a deceased who was on a fixed salary would not be entitled to the benefit
of future prospects for the purpose of computation of compensation would be inapposite. It is because
the criterion of distinction between the two in that event would be certainty on the one hand and
staticness on the other.

One may perceive that the comparative measure is certainty on the one hand and uncertainty
on the other but such a perception is fallacious. It is because the price rise does affect a self-employed
person; and that apart there is always an incessant effort to enhance one's income for sustenance. The
purchasing capacity of a salaried person on permanent job when increases because of grant of
increments and pay revision or for some other change in service conditions, there is always a
competing attitude in the private sector to enhance the salary to get better efficiency from the
employees. Similarly, a person who is self-employed is bound to garner his resources and raise his
charges/fees so that he can live with same facilities. To have the perception that he is likely to remain
static and his income to remain stagnant is contrary to the fundamental concept of human attitude
which always intends to live with dynamism and move and change with the time.

Though it may seem appropriate that there cannot be certainty in addition of future prospects
to the existing income unlike in the case of a person having a permanent job, yet the said perception
does not really deserve acceptance. We are inclined to think that there can be some degree of
difference as regards the percentage that is meant for or applied to in respect of the legal
representatives who claim on behalf of the deceased who had a permanent job than a person who is
self-employed or on a fixed salary.

But not to apply the principle of standardisation on the foundation of perceived lack of
certainty would tantamount to remaining oblivious to the marrows of ground reality.

And, therefore, degree-test is imperative. Unless the degree-test is applied and left to the
parties to adduce evidence to establish, it would be unfair and inequitable.

The degree-test has to have the inbuilt concept of percentage. Taking into consideration the
cumulative factors, namely, passage of time, the changing society, escalation of price, the change in
price index, the human attitude to follow a particular pattern of life, etc., an addition of 40% of the
established income of the deceased towards future prospects and where the deceased was below 40
years an addition of 25% where the deceased was between the age of 40 to 50 years would be
reasonable.

Page 4 of 6 Copyright © 2022 by Regent Computronics Private Limited - (www.the-laws.com)

Licensed to :- Gujarat State Judicial Academy [Client Code :- 5020]

58. The controversy does not end here. The question still remains whether there should be no
addition where the age of the deceased is more than 50 years. Sarla Verma [Sarla Verma v. DTC,
(2009) 6 SCC 121 : (2009) 2 SCC (Civ) 770 : (2009) 2 SCC (Cri) 1002] thinks it appropriate not to
add any amount and the same has been approved in ]Reshma Kumari [Reshma Kumari v. Madan
Mohan, (2013) 9 SCC 65 : (2013) 4 SCC (Civ) 191 : (2013) 3 SCC (Cri) 826].

Judicial notice can be taken of the fact that salary does not remain the same. When a person is
in a permanent job, there is always an enhancement due to one reason or the other. To lay down as a
thumb rule that there will be no addition after 50 years will be an unacceptable concept. We are
disposed to think, there should be an addition of 15% if the deceased is between the age of 50 to 60
years and there should be no addition thereafter. Similarly, in case of self- employed or person on
fixed salary, the addition should be 10% between the age of 50 to 60 years. The aforesaid yardstick
has been fixed so that there can be consistency in the approach by the tribunals and the courts."

(8.) It is submitted by Mr. Rao that the judgment in Pranay Sethi does not show that the attention of
the Court was invited to the specific rules
such as Rule 3(iii) which contemplates addition of 20% of the salary as
against 15% which was stated as a measure in Pranay Sethi. In his
submission, since the statutory instrument has been put in place which
affords more advantageous treatment, the decision in Pranay Sethi ought
not to be considered to limit the application of such statutory Rule.

(9.) It is to be noted that the validity of the Rules was not, in any way, questioned in the instant matter
and thus the only question that we are
called upon to consider is whether in its application, sub-Rule 3(iii) of Rule
220A of the Rules must be given restricted scope or it must be allowed to operate fully.

(10.) The discussion on the point in Pranay Sethi was from the standpoint of arriving at "just
compensation" in terms of Section 168 of the
Motor Vehicles Act, 1988.

(11.) If an indicia is made available in the form of a statutory instrument which affords a favourable
treatment, the decision in Pranay Sethi cannot
be taken to have limited the operation of such statutory provision specially
when the validity of the Rules was not put under any challenge. The
prescription of 15% in cases where the deceased was in the age bracket of
50-60 years as stated in Pranay Sethi cannot be taken as maxima. In the absence of any governing
principle available in the statutory regime, it was
only in the form of an indication. If a statutory instrument has devised a
formula which affords better or greater benefit, such statutory instrument
must be allowed to operate unless the statutory instrument is otherwise
found to be invalid.

(12.) We, therefore, reject the submission advanced on behalf of the appellant and affirm the view
taken by the Tribunal as well as the High

Page 5 of 6 Copyright © 2022 by Regent Computronics Private Limited - (www.the-laws.com)

Licensed to :- Gujarat State Judicial Academy [Client Code :- 5020]

Court and dismiss this appeal without any order as to costs.

(13.) In the end, we express our sincere gratitude for the assistance rendered by Mr. A.D.N. Rao,
learned Amicus Curiae.

ORDER

1. Leave granted.

2. The appeal is dismissed in terms of the signed order.

3. Pending applications, if any, shall stand disposed of.

Page 6 of 6 Copyright © 2022 by Regent Computronics Private Limited - (www.the-laws.com)

Licensed to :- Gujarat State Judicial Academy [Client Code :- 5020]

39
LAWS(SC)-2021-10-1
SUPREME COURT OF INDIA (FROM: MADRAS)
Coram : R.SUBHASH REDDY,HRISHIKESH ROY JJ.
Decided On : October 01,2021
Appeal Type : CIVIL APPEAL NO. 6151 OF 2021 (Arising out of Special Leave Petition (C)
No.4705 of 2019)
Appellants :
NATIONAL INSURANCE COMPANY LTD
Vs.
Respondents :
CHAMUNDESWARI

Advocates :
K.K.BHAT,Ranjan Kumar Pandey,RAKESH K.SHARMA,GARVESH KABRA

Equivalent Citation :
LAWS(SC)-2021-10-1, JT-2021-9-439, KERLT-2021-5-724, ACJ-2021-0-2558, SCALE-
2021-11-593, TNMAC-2021-2-449

Referred Judgement :
ORIENTAL INSURANCE CO LTD VS. PREMLATA SHUKLA, [2007 13 SCC 476] [REFERRED
TO]
SARLA VERMA VS. DELHI TRANSPORT CORPORATION, [2009 6 SCC 121] [REFERRED TO]
NATIONAL INSURANCE COMPANY LIMITED VS. PRANAY SETHI, [2017 16 SCC 680]
[REFERRED TO]
NISHAN SINGH & ORS. VS. ORIENTAL INSURANCE COMPANY LTD. THROUGH
REGIONAL MANAGER & ORS., [2018 6 SCC 765] [REFERRED TO]

Referred Act :
MOTOR VEHICLES ACT, 1988, S.166

JUDGMENT :

R.SUBHASH REDDY,J.
R.SUBHASH REDDY,J.
(1.) Leave granted.

(2.) This appeal is filed by National Insurance Company Ltd. (3rd Respondent before the High Court),
aggrieved by the judgment and order dated 03.08.2018, passed by the High Court of Judicature at

Page 1 of 4 Copyright © 2022 by Regent Computronics Private Limited - (www.the-laws.com)

Licensed to :- Gujarat State Judicial Academy [Client Code :- 5020]

Madras in CMA No.1204 of 2018. By the aforesaid order, the High Court has partly allowed the Civil
Miscellaneous Appeal filed by the Respondent Nos. 1 and 2, by enhancing compensation to
Rs.1,85,08,832/-.

(3.) The 1st Respondent is wife and the 2nd Respondent is minor son of the deceased Mr. Subhash
Babu, who died in a road accident on 14.10.2013. The deceased Mr. Subhash Babu, aged about 35
years was working as Manager HR in a Private Limited Company. On the date of accident, he was
driving Maruti car bearing No.DL-2C-P-5414 on NH-47 - main road from Perumanallur to Erode. At
that time, the Eicher van bearing Registration No.TN-33-AZ-5868 was proceeding in front of the car
driven by the deceased. It is the case of the respondents -claimants that all of a sudden, the driver of
Eicher van has turned towards right side without giving any signal or indicator. In the said accident,
driver of the Maruti car, Mr. Subhash Babu, died and other passengers in the car i.e. 1st Respondent -
wife, 2nd Respondent -minor son and sister of the 1st Respondent, suffered injuries.

(4.) In the Claim Petition, filed by the Respondent Nos. 1 and 2 before the Motor Accident Claims
Tribunal / Additional District Court, Tiruppur, respondents claimed compensation of Rs.3 crores. The
respondents pleaded negligence on the part of the driver of Eicher van as he has taken right turn
without giving any signal or indicator, as such, accident occurred only due to negligence of driver of
Eicher van. The appellant and others have appeared before the Claims Tribunal and opposed the claim.
The Claims Tribunal vide order dated 11.12.2017 passed in M.C.O.P. No.842 of 2014 has allowed the
claim partly and awarded compensation of Rs.10,40,500/- with a finding that there was a contributory
negligence on the part of drivers of both the vehicles in ratio of 75% and 25% on the part of the
deceased and the driver of Eicher van respectively. On appeal, the High Court by recording a finding
that accident occurred only due to the negligence of the driver of the Eicher van and the annual income
of the deceased was Rs.12,29,949/-, has awarded a total compensation of Rs.1,85,08,832/-, including
the compensation on conventional heads. Aggrieved by the judgment and order of the High Court, the
Insurance Company filed this Appeal before this Court.

(5.) We have heard Mr. K. K. Bhat, learned counsel appearing for the Appellant -Insurance Company
and Mr. V. Balaji, learned counsel appearing for the Respondents -Claimants.

(6.) The submission of the learned counsel for the appellant is twofold. Firstly, it is submitted that
though the Tribunal has correctly apportioned the negligence on the part of the deceased and the driver
of Eicher van, the same was overturned by the High Court, contrary to the evidence on record. Mainly
it is contended that in the First Information Report, it was categorically mentioned that accident
occurred only due to negligence by the deceased. In spite of the same, such important documentary
evidence is ignored by the High Court. The learned counsel in support of his arguments placed
reliance on the judgments of this Court in the case of Oriental Insurance Company Limited v. Premlata
Shukla and Others 2007 (13) SCC 476 and in the case of Nishan Singh and Others v. Oriental
Insurance Company Limited 2018 (6) SCC 765. It is, further, submitted by the learned counsel that the
compensation awarded by the High Court is exorbitant in absence of any acceptable evidence on
record to show income of the deceased, as pleaded in the Claim Petition.

(7.) On the other hand, Mr. V. Balaji, learned counsel for the respondents submitted that the accident
occurred only due to the sheer negligence on the part of the driver of Eicher van. It is submitted that
the deceased was driving Maruti car and ahead of them the Eicher van was proceeding and the driver

Page 2 of 4 Copyright © 2022 by Regent Computronics Private Limited - (www.the-laws.com)

Licensed to :- Gujarat State Judicial Academy [Client Code :- 5020]

of the said van turned towards right side without any signal or indicator and the said lapse resulted in
the accident. It is, further, submitted that the deceased was working as Manager HR in a Private
Limited Company and was earning a sum of Rs.1,33,070/- per month, in spite of the same, the High
Court has taken income of the deceased at Rs.12,29,949/- per annum and awarded the compensation. It
is submitted that in view of the oral and the documentary evidence on record, a just compensation is
awarded by the High Court and there are no grounds to interfere with the same.

(8.) It is clear from the evidence on record of PW -1 as well as PW -3 that the Eicher van which was
going in front of the car, has taken a sudden right turn without giving any signal or indicator. The
evidence of PW -1 and PW -3 is categorical and in absence of any rebuttal evidence by examining the
driver of Eicher van, the High Court has rightly held that the accident occurred only due to the
negligence of the driver of Eicher van. It is to be noted that PW -1 herself travelled in the very car and
PW -3, who has given statement before the police, was examined as eye -witness. In view of such
evidence on record, there is no reason to give weightage to the contents of the First Information
Report. If any evidence before the Tribunal runs contrary to the contents in the First Information
Report, the evidence which is recorded before the Tribunal has to be given weightage over the
contents of the First Information Report. In the judgment, relied on by the appellant 's counsel in the
case of Oriental Insurance Company Limited v. Premlata Shukla and Others 2007 (13) SCC 476 , this
Court has held that proof of rashness and negligence on the part of the driver of the vehicle, is
therefore, sine qua non for maintaining an application under Section 166 of the Act. In the said
judgment, it is held that the factum of an accident could also be proved from the First Information
Report. In the judgment in the case of Nishan Singh and Others v. Oriental Insurance Company
Limited 2018 (6) SCC 765 , this Court has held, on facts, that the car of the appellant therein, which
crashed into truck which was proceeding in front of the same, was driven negligently by not
maintaining sufficient distance as contemplated under Road Regulations, framed under Motor
Vehicles Act, 1988. Whether driver of the vehicle was negligent or not, there cannot be any
straitjacket formula. Each case is judged having regard to facts of the case and evidence on record.
Having regard to evidence in the present case on hand, we are of the view that both the judgments
relied on by the learned counsel for the appellant, would not render any assistance in support of his
case.

(9.) Even with regard to quantum of compensation, it is clear from the judgment of the High Court that
the accident occurred on 14.10.2013, the High Court has correctly taken into account the salary
disclosed by the deceased in Form -16 for the Financial Year 2012-2013 and income of the deceased is
taken as Rs.12,29,949/- per annum for the purpose of determination of loss of dependency. Though, it
was the claim of the respondents -claimants that the deceased was earning Rs.1,33,070/- per month,
the same was not accepted and the High Court itself assessed the income of the deceased at
Rs.12,29,949/- per annum. As the deceased was in permanent job and having regard to age of the
deceased on the date of the accident, the future prospects and the multiplier were correctly applied by
the High Court, which is in conformity with the judgment of this Court in the Case of Sarla Verma
(Smt) and Others v. Delhi Transport Corporation and Another 2009 (6) SCC 121 and also in the case
of National Insurance Company Limited v. Pranay Sethi and Others 2017 (16) SCC 680. Even the
amount of compensation on other conventional heads is awarded correctly by the High Court. For the
aforesaid reasons, we do not find any merit in this Civil Appeal and the same is accordingly dismissed
with no order as to costs.

Page 3 of 4 Copyright © 2022 by Regent Computronics Private Limited - (www.the-laws.com)

Licensed to :- Gujarat State Judicial Academy [Client Code :- 5020]

(10.) While issuing notice, this Court vide order dated 18.02.2019 granted stay of enforcement of the
impugned judgment, subject to condition of depositing the lumpsum compensation of Rs.25 Lakhs
before the Tribunal with a direction to deposit the same in an interest earning Fixed Deposit in a
Nationalised bank. The said amount shall be paid to the respondents -claimants with accrued interest.
The balance amount payable by the appellant -Insurance Company shall be paid within a period of two
months from today.

Page 4 of 4 Copyright © 2022 by Regent Computronics Private Limited - (www.the-laws.com)

ITEM NO.7 Court 11 (Video Conferencing) SECTION IV-A

S U P R E M E C O U R T O F I N D I A
40
RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (C) No(s). 14360/2016

(Arising out of impugned final judgment and order dated 05-06-2015

in MFA No. 6184/2013 passed by the High Court Of Karnataka At
Bengaluru)

K. ANUSHA & ORS. Petitioner(s)

VERSUS

REGIONAL MANAGER, SHRIRAM GENERAL

INSURANCE CO. LTD Respondent(s)

Date : 06-10-2021 This petition was called on for hearing today.

CORAM : HON'BLE MR. JUSTICE HEMANT GUPTA

HON'BLE MR. JUSTICE V. RAMASUBRAMANIAN

For Petitioner(s) Mr. C. B. Gururaj, Adv.

Mr. K. P. Mavi, Adv.
Mr. Pramit Chettri, Adv.
Mr. Prakash Ranjan Nayak, AOR

For Respondent(s) Mr. Sameer Nandwani, Adv.

Mr. Syed Ahmed Saud, Adv.
Mr. Daanish Ahmed Syed, Adv.
Mohd. Parvez Dabas, Adv.
Mr. Uzmi Jameel Husain, Adv.
for M/s. Shakil Ahmad Syed, AOR

UPON hearing the counsel the Court made the following

O R D E R

Heard the learned counsel for the parties at some length.

Leave granted.

The appeal is allowed.

Reasons to follow.

(JAYANT KUMAR ARORA) (RENU BALA GAMBHIR)

COURT MASTER COURT MASTER

List of Books :-

1) (2017) 16 SCC 680

1
ITEM NO.7 Court 11 (Video Conferencing) SECTION IV-A

S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (C) No(s). 14360/2016

(Arising out of impugned final judgment and order dated 05-06-2015

in MFA No. 6184/2013 passed by the High Court Of Karnataka At
Bengaluru)

K. ANUSHA & ORS. Petitioner(s)

VERSUS

REGIONAL MANAGER, SHRIRAM GENERAL

INSURANCE CO. LTD Respondent(s)

Date : 08-10-2021 This petition was called on for hearing on

06.10.2021 and the reasoned order is being uploaded today.

CORAM : HON'BLE MR. JUSTICE HEMANT GUPTA

HON'BLE MR. JUSTICE V. RAMASUBRAMANIAN

For Petitioner(s) Mr. C. B. Gururaj, Adv.

Mr. K. P. Mavi, Adv.
Mr. Pramit Chettri, Adv.
Mr. Prakash Ranjan Nayak, AOR

For Respondent(s) Mr. Sameer Nandwani, Adv.

Mr. Syed Ahmed Saud, Adv.
Mr. Daanish Ahmed Syed, Adv.
Mohd. Parvez Dabas, Adv.
Mr. Uzmi Jameel Husain, Adv.
for M/s. Shakil Ahmad Syed, AOR

UPON hearing the counsel the Court made the following

O R D E R

This matter was taken up for hearing on 06.10.2021 and the

following order was passed :-

“Heard the learned counsel for the parties at

some length.
Leave granted.
The appeal is allowed.
Reasons to follow.”

2
 Accordingly, the reasoned order is being uploaded today and

the signed order is placed on the file.

Pending interlocutory application(s), if any, is/are disposed

of.

(JAYANT KUMAR ARORA) (RENU BALA GAMBHIR)

COURT MASTER COURT MASTER

(Signed order is placed on the file)

3
 IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.  6237  OF 2021
(Arising out of SLP(C) No.14360 of 2016)

SMT. K. ANUSHA & ORS.                                       ...APPELLANT(S)
VERSUS
REGIONAL MANAGER,
SHRIRAM GENERAL INSURANCE 
CO.LTD.        …RESPONDENT(S)

O R D E R
Leave granted.

2. Aggrieved both by the quantum of compensation determined by

the   High   Court   and   the   finding   recorded   by   the   Tribunal   and

confirmed by the High Court that the driver of the car in which the

deceased was travelling was also guilty of contributory negligence and

that therefore the claimants are entitled only to 50% of the amount of

compensation as determined, the claimants in a motor accident claim

have come up with the above appeal.

3. We have heard the learned counsel for the parties.

4. On 10.02.2011, the car in which the husband of the 1 st appellant

(and the father of the appellant nos. 2 and 3) was travelling, dashed

against a lorry that was going in front, when the driver of the lorry

allegedly stopped  it all  of a sudden without any signal or indicator.

The victim suffered serious injuries and died on the spot.

4
5. Claiming   that   the   accident   occurred   due   to   the   rash   and

negligent driving on the part of the driver of the lorry, the appellants

filed a claim before the Tribunal, seeking compensation in a sum of

Rs.54,10,000/­.

6. According to the appellants, the victim was 32 years of age at the

time   of   the   accident   and   that  he  was  employed  as  a  Senior  Design

Engineer in a company earning a sum of Rs.45,000/­ per month with

bright future prospects.

7. On the issue relating to the cause of the accident, the Tribunal

came to the conclusion on perusal of the police records, including  the

complaint, spot sketch etc., that the lorry into which the car collided,

had been parked without putting any indicator or signal on NH­4. But

at   the   same   time   the   Tribunal   concluded,   on   the   basis   of   the   final

report filed by the police against the drivers of the lorry as well as the

car, that the driver of the car was also equally negligent.   Therefore,

the   Tribunal   first   held   that   the   accident   occurred   due   to   the

contributory negligence on the part of the drivers of both vehicles and

fixed 50% as the factor of contribution.

8. On   the   quantum   of   compensation,   the   Tribunal   arrived   at   the

annual   income   of   the   deceased   as   Rs.2,78,700/­,   after   excluding

certain special allowances. After adding 10% to the said income on the

5
ground that the deceased had a bright future, the Tribunal fixed the

loss of annual income at Rs.3,09,900/­. From the said amount, the

Tribunal   deducted  one­third  and   applied   a   multiplier   of   16   on   the

balance annual income of Rs.2,06,600/­. The amount so arrived at by

the Tribunal was Rs.33,05,600/­ to which the Tribunal added a sum

of Rs.10,000 each towards loss of consortium, love and affection and

expectation   of   love.   The   Tribunal   added   Rs.5000/­   each   for   the

transportation of the body and for funeral expenses and arrived at a

total amount of Rs.33,45,600/­. Since the Tribunal held the driver of

the   car   equally   negligent   contributing   to   the   accident,   the   Tribunal

divided the aforesaid amount by  two and awarded a compensation of

Rs.16,72,800/­. On the said amount, interest was directed to be paid

at 6% per annum.

9. The   Insurance   Company   did   not   challenge   the   award.   But   the

claimants filed an appeal before the High Court of Karnataka. By the

judgment impugned in this appeal the High Court upheld the finding

of the Tribunal relating to contributory negligence. On the quantum of

compensation, the High Court took the gross annual income for the

assessment year 2009­10, which was Rs.3,36,427/­.  After deducting

income   tax   of   Rs.32,368/­   from   the   said   amount,   the   High   Court

arrived at the net income as Rs.3,04,060/­. From the said amount the

6
Tribunal deducted one­third towards personal expenses and arrived at

the   income  available   for  the family as Rs.2,02,707/­. After  applying

the   multiplier   of   16,   the   High   Court   re­determined   the   loss   of

dependency at Rs.32,43,312/­. To this amount, the High Court added

Rs.1,00,000/­ towards loss of consortium, Rs.75,000/­ towards loss of

love   and   affection   and   Rs.25,000/­towards   loss   of   estate   and

Rs.25,000/­   funeral   expenses.   Thus   the   High   Court   arrived   at   the

compensation   payable   as   Rs.34,68,312/.   Since   50%   was   fixed   as

contributory   negligence,   the   High   Court   awarded   half   of   the   said

amount namely, a sum of Rs.17,34,156, payable with interest at 9%

per   annum.   Aggrieved   by   the   said   judgment,   the   claimants   are   on

appeal before us.

10. The primary grievance of the appellants are two­fold namely, (i)

that   the   finding   of   contributory   negligence   is   wholly   arbitrary   and

unjustified; and (ii) that both the Tribunal and the High Court failed to

take care of the future prospects, in the light of the law laid down in

National   Insurance   Company   Limited    vs.    Pranay   Sethi   and

Others1.

11. The   first   grievance   of   the   appellants   about   the   finding   of

contributory   negligence   is   liable   to   be   sustained   for   three   reasons

namely, (i) that even according to the Tribunal and the High Court, the
1 (2017) 16 SCC 680

7
spot where the lorry was parked, as indicated in Exhibits P­1 to P­6

(FIR, complaint, spot magazar etc.) and Exhibit P­22 (spot sketch), was

not a parking place; (ii) that according to the High court, the driver of

the lorry ought to have parked the vehicle on the left side of the road

by giving proper indication/signal, but it was not done; and  (iii)  that

as per the finding of the High court, the accident occurred at about

4.30 A.M. when the lighting should have been poor.

12. The view expressed by the High Court to effect that if the driver of

the car had been vigilant and driving the vehicle carefully following the

traffic rules, the accident would not have happened, is presumptuous

and   not   based   on   any   evidence.   There   was   nothing   on   record   to

indicate that the driver of the car was not driving at moderate speed

nor that he did not follow traffic rules. On the contrary, the High Court

holds   that   if   the   lorry   had   not   been   parked   on   the   highway,   the

accident would not have happened even if the car was driven at a high

speed.

13. Therefore, the entire reasoning of the High Court on Issue No.1 is

riddled   with   inherent   contradictions.   To   establish   contributory

negligence, some act or omission, which materially contributed to the

accident  or   the   damage,   should  be attributed to the  person against

whom   it   is   alleged.   In  Pramodkumar   Rasikbhai   Jhaveri    vs.

8
Karmasey Kunvargi Tak and Others2  this Court quoted a decision

of the High Court of Australia in Astley v. Austrust Ltd.3, to hold that

“…where, by his negligence, one party places another in a situation of

danger,   which   compels   that   other   to   act   quickly   in   order   to   extricate

himself, it does not amount to contributory negligence, if that other acts

in a way which, with the benefit of hindsight is shown not to have been

the   best   way   out   of   the   difficulty”.   In   fact,   the   statement   of   law   in

Swadling v. Cooper4, that “…the mere failure to avoid the collision by

taking   some   extraordinary   precaution,   does   not   in   itself   constitute

negligence…”, was also quoted with approval by this Court. Therefore,

we are compelled to reverse the finding of the Tribunal and the High

Court on the question of contributory negligence.

14. On   the   second   question,   the   Tribunal   merely   allowed   10%   as

additional  weightage,   for   the reason that the deceased had a bright

future. But as held by this Court in  National Insurance Company

Limited  vs. Pranay Sethi (supra), the appellants were entitled to an

addition of 50% towards future prospects. Paragraph 59.3 and 59.4 of

Pranay Sethi read as follows:­

“59.3. While determining the income, an addition of 50%
of   actual   salary   to   the   income   of   the   deceased   towards
future prospects, where the deceased had a permanent job
2 (2002) 6 SCC 455
3 (1999) 73 ALJR 403
4 1931 AC 1

9
 and was below the age of 40 years, should be made. The
addition   should   be   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,   the   addition   should   be   15%.
Actual salary should be read as actual salary less tax.

59.4. In case the deceased was self­employed or on a fixed
salary,   an   addition   of   40%   of   the   established   income
should be the warrant where the deceased was below the
age of 40 years. An addition of 25% where the deceased
was between the age of 40 to 50 years and 10% where the
deceased was between the age of 50 to 60 years should be
regarded   as   the   necessary   method   of   computation.   The
established   income   means   the   income   minus   the   tax
component.”
15. If   50%  is   so  added  to future prospects, the compensation would

work out as follows:­

(i) Gross salary for the Assessment year 2009­10 =  Rs. 3,36,427/­

(ii) Income Tax paid =  Rs.   32,368/­
(iii) Net annual income                                            = Rs. 3,04,060/­
(iv)    Deduction of one­third towards
Personal expenses =  Rs. 1,01,353/­

(v)    Net amount                                                       =  Rs. 2,02,707/­

(vi)  50% towards future prospects =  Rs. 1,01,353/­

   
(vii) Total of (v) and (vi) =  Rs. 3,04,060/­
(viii) Amount after applying multiplier          = Rs.48,64,960/­
of 16

(ix) Other amounts awarded by the High Court       = Rs.  2,25,000/­
        (towards loss of consortium etc.) ­­­­­­­­­­­­­­­­­­­

Total          Rs.50,89,960/­
     ­­­­­­­­­­­­­­­­­­­
16. Therefore in the result the appeal is allowed and the judgment of

the   High   Court   of   Karnataka   in   MFA   No.6184   of   2013   (MV)   dated

05.06.2015   is   modified   granting,   to   the   appellants   a   total

10
compensation   of   Rs.50,89,960/­.   The   same   shall   be   payable   with

interest   @   9%   per   annum  from  the  date  of  petition.  Since  appellant

nos. 2 and 3 are minors, they are held entitled to a share of 25% each

and the said amounts shall be deposited in any nationalized bank of

the  choice  of the  1st  appellant. The 1st  appellant will be at liberty to

withdraw   the   interest   periodically.   The   amounts   already

paid/deposited by the Insurance Company shall be adjusted as against

the above. No costs.

......................................J.
(Hemant Gupta)

.......................................J.
(V. Ramasubramanian)

New Delhi
October  06, 2021

11
 41

2021 (0) AIJEL-SC 67928

SUPREME COURT OF INDIA

(KERALA HIGH COURT)

Hon'ble Judges:S.Abdul Nazeer and Krishna Murari JJ.

N.Jayasree Versus Cholamandalam Ms General Insurance Company Ltd.

CIVIL APPEAL No. 6451 of 2021 ; *J.Date :- OCTOBER 25, 2021

MOTOR VEHICLES ACT, 1988 Section - 168 , 166

CODE OF CIVIL PROCEDURE, 1908 Section - 2(11)

(a) Motor Vehicles Act, 1988 - S. 166, 168 - Code of Civil Procedure, 1908 - S. 2(11) - motor
accident - death of victim - claim petition before MACT seeking compensation by legal
representative - appellants submitted that High Court was not justi ed precluding appellant
no. 4 as legal representative of deceased - appellant no. 4, mother-in-law of deceased
staying with deceased and dependent on him at the time of accident for shelter and
maintenance - held, she is a legal representative u/s. 166 of the MV Act and is entitled to
maintain a claim petition. (Para 21)

(b) Motor Vehicles Act, 1988 - S. 166, 168 - motor accident - death of victim - compensation
claim - deceased was aged 52 years at the time of accident - he was working as an
Assistant Professor and getting a monthly salary of Rs. 83,831 pm - whether High Court was
justi ed in applying a split multiplier for calculating dependency compensation for post-
retiral and pre-retiral period - held, no - at the time of calculation of income, Court has to
consider actual income of deceased and addition should be made to take into account
future prospects - while the evidence in a given case may indicate a different percentage of
increase, standardization of addition for future prospects should be made to avoid different
yardsticks being applied or different methods of calculation being adopted - High Court was
not justi ed in applying split multiplier in instant case. (Para 22,28)

(c) Motor Vehicles Act, 1988 - S. 166, 168 - motor accident - death of victim - quantum of
compensation - deceased was aged 52 years at the time of accident and had a permanent
job - he was working as an Assistant Professor and getting a monthly salary of Rs. 83,831
pm which is clear from his salary certi cate issued by Principal - held, it clear that Annual
Income of deceased minus income tax should be taken into account at the time of his death
for the purpose of calculation of loss of dependency - hence, after deducting income tax,
actual income of deceased comes to Rs. 8,87,148 p.a. - addition of 15% of his actual salary
should be added towards future prospects and multiplier of 11 applied - 1/4th of the income
(actual salary + future prospects) should be deducted towards his personal expenses of
deceased - total compensation payable towards loss of dependency is Rs. 84,16,815 -
further, he was paid Rs. 16,500 towards loss of estate, Rs.16,500 towards funeral expenses,
Rs. 44,000 towards spousal consortium and Rs. 88,000 towards parental consortium - thus,
claimants are entitled to total compensation of Rs. 85,81,815 with interest at the rate of
7.5% per annum from date of claim petition till date of its realization - appeal allowed. (Para
29,30,31,34,35,36)

Imp.Para: [ 21 ] [ 22 ] [ 28 ] [ 29 ] [ 30 ] [ 31 ] [ 34 ] [ 35 ] [ 36 ]

Cases Referred To :

1. Custodian Of Branches Of Banco National Ultramarino V. Nalini Bai Naique, 1989

Supp2 SCC 275 : 1989 AIR SC 1589 : 1989 (1) Scale 1413 : JT 1989 (Supp) 159 : 1989
(2) SCR 810
2. Gujarat State Road Transport Corporation, Ahmedabad Vs. Ramanbhai Prabhatbhai
And Anr., 1987 3 SCC 234 : 1987 AIR SC 1690 : 1987 (1) Scale 1027 : JT 1987 (2) 384 :
1987 (3) SCR 404
3. Hafizun Begum (Mrs) Vs. Mohd. Ikram Heque And Ors., 2007 10 SCC 715 : 2007 AIR SC
2680 : 2007 (9) Scale 331 : JT 2007 (9) 646 : 2007 (8) SCR 487
4. K.R. Madhusudhan And Ors. Vs. Administrative Officer And Anr., 2011 4 SCC 689 : 2011
AIR SC 979 : 2011 (2) Scale 511 : 2011 (2) SCR 1061 : 2011 AIR SCW 1390
5. Megjibhai Khimji Vira V. Chaturbhai Taljabhagujri, AIR 1977 Guj 195
6. Montford Brothers Of St. Gabriel And Anr. Vs. United India Insurance And Anr., 2014 3
SCC 394 : 2014 AIR SC 1550 : 2014 (1) Scale 645 : JT 2014 (2) 488 : 2014 (1) SCR 835
7. National Insurance Company Limited Vs. Pranay Sethi And Ors., 2017 16 SCC 680 :
2017 AIR SC 5157 : 2017 (13) Scale 12 : JT 2017 (10) 450 : 2017 (8) Supreme 107
8. Puttamma And Ors. Vs. K.L. Narayana Reddy And Anr., 2013 15 SCC 45 : 2014 AIR SC
706 : 2013 (15) Scale 437 : JT 2014 (2) 201 : 2014 AIR SCW 165
9. Reshma Kumari & Ors. Vs. Madan Mohan & Anr., 2013 9 SCC 65 : 2013 AIR SC(Supp)
474 : 2013 (5) Scale 160 : JT 2013 (4) 362 : 2013 (2) SCR 706
10. Sarla Verma (Smt.) And Ors. Vs. Delhi Transport Corporation And Anr., 2009 6 SCC 121
: 2009 AIR SC 3104 : 2009 (6) Scale 129 : JT 2009 (6) 495 : 2009 (5) SCR 1098
11. Sudama Devi V. Jogendra Choudhary, AIR 1987 Pat 239
12. United India Insurance Co. Ltd. Vs. Satinder Kaur @ Satwinder Kaur And Ors, AIR 2020
SC 3076 : 2020 (8) Scale 482 : JT 2020 (7) 1 : 2020 (3) RCR(Civ) 75 : 2020 (5) SLT 572

Equivalent Citation(s):
AIR 2021 SC 5218 : JT 2021 (11) SC 50

JUDGMENT :-

S.ABDUL NAZEER, J.

1 Leave granted.

2 This appeal is directed against the judgment dated

09.08.2017 passed by the High Court
of Kerala at Ernakulam in
MACA No. 1560 of 2013. Through the impugned judgment, the
High Court scaled down the amount of compensation payable to
the present appellants and
thereby modified the award dated
26.04.2013 passed by the Motor Accident Claims
Tribunal,
Kottayam (for short 'MACT') in OP(MV) No.843 of 2011.

3 The appellants filed the aforesaid claim petition before the

MACT seeking compensation
on account of the death of N.
Venugopalan Nair in a motor vehicle accident which occurred
on
20.06.2011. Appellant no.1 is the wife of the deceased, appellant
nos. 2 and 3 are his
daughters and appellant no.4 is his
motherinlaw.

4 There is no dispute as to the occurrence of the accident and

the liability of the
respondentinsurer
to pay the compensation. In
view of this admitted position, it is
unnecessary to narrate the
factual aspects of 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.
To this, the MACT applied a multiplier of '11' and
deducted
onefourth (1/4th) of the income towards his personal expenses for
the purpose of
calculation of the compensation under the head of
loss of dependency. A total sum of
Rs.73,18,971/(Rupees seventythree
lakhs eighteen thousand nine hundred seventyone only)
was awarded towards loss of dependency. The MACT awarded
a total sum of
Rs.74,50,971/(Rupees seventyfour lakhs fifty
thousand nine hundred seventyone only)
towards compensation
with interest @ 7.5 per cent per annum from the date of the claim
petition till the date of realization. Thus, the amount awarded to
the appellants is as under:

S.No. Head of Claim Amount Amount Basis vital details in

Claimed (in Awarded (in a nut shell
rupees) rupees)
1. Transportation 5,000/- 4,000/- In view of the

transportation

charges
2. Funeral expenses 10,000/- 7,000/- Nominal amount
3. Damage to clothings 1,500/- 1,000/- ...do......
4. Loss of dependency 1,06,82,100/- 73,18,971/- (8,87,148-2,21,787)
x 11

=73,18,971/-
5. Pain and sufferings 10,000/- 15,000/- In view of the pain
suffered by the
victim before his
death
6. Loss of love and 1,00,000/- 70,000/- Petitioners 2,3 and
affection 4 have lost the love
and affection of the
victim

7. Loss of consortium 1,00,000/- 25,000/- The first petition

has lost the
companionship of
her husband
8. Loss of estate 1,00,000/- 10,000/- Nominal amount
9. Loss of expectation of 2,00,000/- Not allowed Other heads
life allowed
TOTAL 1,12,08,600/- 74,50,971/- ...............
6 However, the High Court held that appellant no.4 was not a
legal representative of the
deceased. Further, the High Court held
that the MACT ought to have applied split multiplier
for the
assessment of the dependency compensation. The High Court
fixed monthly income
of the deceased as Rs.40,000/(
Rupees forty
thousand only) and deducted onethird
(1/3rd)
of the income
towards his personal expenses. It applied multiplier '7' for
calculating
dependency compensation for the postretiral
period
and, for the preretirement
period, a
multiplier of '4' was applied.
Accordingly, the High Court awarded compensation of
Rs.23,65,728/(
Rupees twentythree
lakhs sixtyfive
thousand
seven hundred twentyeight
only), towards loss of dependency for
preretiral
period and a sum of Rs.22,40,000/(
Rupees
twentytwo
lakhs forty thousand only) towards loss of dependency for
postretiral
period. A
sum of Rs.1,00,000/(
Rupees one lakh only)
was awarded towards loss of consortium,
Rs.25,000/(
Rupees
twentyfive
thousand only) towards funeral expenses, and
Rs.80,000/(
Rupees eighty thousand only) towards loss of love
and affection. In total, a sum of
Rs.48,39,728/(
Rupees fortyeight
lakhs thirtynine
thousand seven hundred twentyeight
only)
was
awarded as compensation by the High Court.

7 We have heard the learned counsel for the parties. Learned

counsel for the appellants
submits that the High Court was not
justified precluding appellant no.4 as legal
representative of the
deceased. She is the motherinlaw
of the deceased and was living
with
the deceased and his family members. Therefore, she was
entitled to be treated as a legal
representative for the purpose of
determination of compensation. Accordingly, 1/4th of the
income of
the deceased should have been deducted towards his personal
expenses. Further,
it was contended that the High Court was not
justified in applying a split multiplier having
regard to the
judgment of this Court in Sarla Verma (Smt.) and Ors. vs. Delhi
Transport
Corporation and Anr., (2009) 6 SCC 121 and the subsequent
Constitution Bench judgment of
this Court in National Insurance
Company Limited vs. Pranay Sethi and Ors., (2017) 16 SCC
680. It was also
argued that the deceased was a meritorious person who possessed
the
qualification of M.Sc. M.Phil. His monthly salary was
Rs.83,831/which
is evident from the
materials on record. The
High Court took his monthly income as Rs.40,000/for
the
purpose
of calculation of loss of dependency without any
justification. In view of the above, the High
Court was not justified
in scaling down the amount of compensation awarded by the
MACT.

8 On the other hand, learned counsel for the respondent

submits that the deceased was
aged 52 years at the time of the
accident. He would not have earned the same monthly
income
after his retirement. In view of the same, the High Court applied a
split multiplier for
calculating the loss of dependency. It was also
argued that appellant no.4, who is the
motherinlaw
of the
deceased, cannot be treated as his legal representative. Further, it
was
contended that the High Court was justified in taking the
monthly salary of the deceased as
Rs.40,000/and
deducting 1/3rd
of the income towards the personal expenses, fair
compensation
has been awarded towards loss of dependency.

9 In view of the above, the questions for consideration before us

are: (I) whether the High
Court was justified in precluding the
motherinlaw 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 amount of compensation
that
should be awarded to the appellants?
(I) whether the High Court was justified in
precluding the
motherinlaw
of the deceased (appellant no.4) as his legal
representative?

10 The provisions of the Motor Vehicles Act, 1988 (for short, "MV
Act") gives paramount
importance to the concept of 'just and fair'
compensation. It is a beneficial legislation which
has been framed
with the object of providing relief to the victims or their families.
Section
168 of the MV Act deals with the concept of 'just
compensation' which ought to be
determined on the foundation of
fairness, reasonableness and equitability. Although such
determination can never be arithmetically exact or perfect, an
endeavor should be made by
the Court to award just and fair
compensation irrespective of the amount claimed by the
applicant/s. In Sarla Verma1, this Court has laid down as under:

"16. ..."Just compensation" is adequate

compensation which is fair and equitable, on
the facts and circumstances of the case, to
make good the loss suffered as a result of
the
wrong, as far as money can do so, by applying
the wellsettled
principles relating to
award of
compensation. It is not intended to be a
bonanza, largesse or source of
profit."

11 In Sarla Verma1 it was further held that where the deceased

was married, the deduction
towards personal and living expenses
of the deceased should be onethird
(1/3rd) where the
number of
dependent family members is between 2 and 3, onefourth
(1/4th)
where the
number of dependent family members is between 4 and
6, and onefifth
(1/5th) where the
number of dependent family
members exceeds six.

12 In the instant case, the appellants have contended that the

motherinlaw
of the deceased
was staying with the deceased and
his family members since a long time. Taking into
consideration
the number of dependents of the deceased including his
motherinlaw
(four in
number), the MACT had deducted one
fourth (1/4th) of the income towards his personal
expenses.
However, the High Court has held that appellant no.4 being the
motherinlaw
of the
deceased, cannot be reckoned as a dependent
of the deceased. The High Court, therefore,
determined the number
of dependents as 3 and accordingly deducted onethird
(1/3rd) of
the
income of the deceased towards his personal expenses.

13 Section 166 of the MV Act provides for filing of an application

for 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 of the nature specified
in
subsection
(1) of section 165 may be made-

(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 of the legal
representatives of the
deceased; or

(d) by any agent duly authorised by the person

injured or all or any of the legal
representatives of the deceased, as the case
may be:

Provided that where all the legal

representatives of the deceased have not joined
in any
such application for compensation, the
application shall be made on behalf of or for
the benefit of all the legal representatives of
the deceased and the legal
representatives who
have not so joined, shall be impleaded as
respondents to the
application."

14 The MV Act does not define the term 'legal representative'.

Generally, 'legal
representative' means a person who in law
represents the estate of the deceased person
and includes any
person or persons in whom legal right to receive compensatory
benefit
vests. A 'legal representative' may also include any person
who intermeddles with the estate
of the deceased. Such person
does not necessarily have to be a legal heir. Legal heirs are
the
persons who are entitled to inherit the surviving estate of the
deceased. A legal heir may
also be a legal representative.

15 Indicatively for the present inquiry, the Kerala Motor Vehicle

Rules, 1989, defines the term
'legal representative' as under:

"Legal Representative" means a person who in

law is entitled to inherit the estate of the
deceased if he had left any estate at the time of
his death and also includes any legal
heir of
the deceased and the executor or
administrator of the estate of the deceased."

16 In our view, the term 'legal representative' should be given a

wider interpretation for the
purpose of Chapter XII of MV Act and it
should not be confined only to mean the spouse,
parents and
children of the deceased. As noticed above, MV Act is a benevolent
legislation
enacted for the object of providing monetary relief to the
victims or their families. Therefore,
the MV Act calls for a liberal
and wider interpretation to serve the real purpose underlying
the
enactment and fulfil its legislative intent. We are also of the view
that in order to
maintain a claim petition, it is sufficient for the
claimant to establish his loss of dependency.
Section 166 of the
MV Act makes it clear that every legal representative who suffers
on
account of the death of a person in a motor vehicle accident
should have a remedy for
realization of compensation.

17 It is settled that percentage of deduction for personal expenses

cannot be governed by a
rigid rule or formula of universal
application. It also does not depend upon the basis of
relationship
of the claimant with the deceased. In some cases, the father may
have his own
income and thus will not be considered as
dependent. Sometimes, brothers and sisters will
not be considered
as dependents because they may either be independent 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.

18 In the instant case, the question for consideration is whether

the fourth appellant would
fall under the expression 'legal
representative' for the purpose of claiming compensation. In
Gujarat State Road Transport Corporation, Ahmedabad vs.
Ramanbhai Prabhatbhai and Anr.,
(1987) 3 SCC 234 this Court while considering
the entitlement of the brother of a deceased
who died in a motor
vehicle accident to maintain a claim petition under the provisions
of the
MV Act, held as under:

"13. We feel that the view taken by the

Gujarat High Court is in consonance with
the
principles of justice, equity and good
conscience having regard to the conditions
of the
Indian society. Every legal
representative who suffers on account of
the death of a
person due to a motor
vehicle accident should have a remedy for
realisation of
compensation and that is
provided by Sections 110A
to 110F
of the
Act. These
provisions are in consonance with
the principles of law of torts that every injury
must
have a remedy. It is for the Motor
Vehicles Accidents Tribunal to determine the
compensation which appears to it to be just as
provided in Section 110B
of the Act and
to
specify the person or persons to whom
compensation shall be paid. The
determination
of the compensation payable and its
apportionment as required by
Section 110B
of
the Act amongst the legal representatives for
whose benefit an
application may be filed
under Section 110A
of the Act have to be done
in accordance
with wellknown
principles of law. We should remember that in an Indian
family
brothers, sisters and brothers'
children and sometimes foster children live
together and
they are dependent upon the
breadwinner
of the family and if the
breadwinner
is killed
on account of a
motor vehicle accident, there is no
justification to deny them
compensation
relying upon the provisions of the Fatal
Accidents Act, 1855 which as we
 have
already held has been substantially modified
by the provisions contained in the
Act in
relation to cases arising out of motor vehicles
accidents. We express our
approval of the
decision in Megjibhai Khimji Vira v.
Chaturbhai Taljabhagujri, AIR 1977
Guj 195 and hold that
the brother of a person who dies in a motor
vehicle accident is
entitled to maintain a
petition under Section 110A
of the Act if he is
a legal
representative of the deceased."

19 In Hafizun Begum (Mrs) vs. Mohd. Ikram Heque and Ors., (2007) 10 SCC 715
it was held
that:

"7. ...12. As observed by this Court in

Custodian of Branches of Banco National
Ultramarino v. Nalini Bai Naique, 1989 Supp (2) SCC 275 the
definition contained in
Section 2(11) CPC is
inclusive in character and 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, can represent the
estate of the
deceased person. It includes
heirs as well as persons who represent the
estate even
without title either as
executors or administrators in possession
of the estate of the
deceased. All such
persons would be covered by the expression
'legal representative'.
As observed in Gujarat
SRTC v. Ramanbhai Prabhatbhai3 a legal
representative is one
who suffers on account of
death of a person due to a motor vehicle
accident and need
not necessarily be a wife,
husband, parent and child."

20 In Montford Brothers of St. Gabriel and Anr. vs. United

India Insurance and Anr., (2014) 3
SCC 394 this Court was considering the claim
petition of a charitable society for award of
compensation on
account of the death of its member. The appellantsociety
therein
was a
registered charitable society and was running various
institutions as a constituent unit of
Catholic church. Its members,
after joining the appellantsociety,
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 appellantsociety
seeking
compensation on account of the death of
aforesaid 'brother' was
rejected by the High Court on the ground of its maintainability.
This
Court after examining various provisions of the MV Act held
that the appellantsociety
was
the legal representative of the
deceased 'brother'. While allowing the claim petition it was
observed as under:

"17. A perusal of the judgment and order of

the Tribunal discloses that although Issue 1
was not pressed and hence decided in favour
of the appellant claimants, while
considering
the quantum of compensation for the
claimants, the Tribunal adopted a
very
cautious approach and framed a question for
itself as to what should be the
criterion for
assessing compensation in such case where
the deceased was a Roman
Catholic and joined
the church services after denouncing his
family, and as such having
no actual
dependents or earning? For answering this
issue, the Tribunal relied not only
upon
judgments of American and English Courts
but also upon Indian judgments for
coming to
the conclusion that even a religious order or
an organisation may suffer
considerable loss
due to the death of a voluntary worker. The
Tribunal also went on to
decide who should be
entitled for compensation as legal
representative of the
deceased and for that
purpose it relied upon the Full Bench
judgment of Patna High
Court in Sudama
Devi v. Jogendra Choudhary, AIR 1987 Pat 239 which held
that the
term "legal representative" is wide
enough to include even "intermeddlers" with
the
estate of a deceased. The Tribunal also
referred to some Indian judgments in which it
was held that successors to the trusteeship
and trust property are legal representatives
within the meaning of Section 2(11) of the
Code of Civil Procedure."
21 Coming to the facts of the present case, the fourth appellant
was the motherinlaw
of the
deceased. Materials on record clearly
establish that she was residing with the deceased and
his family
members. She was dependent on him for her shelter and
maintenance. It is not
uncommon in Indian Society for the
motherinlaw
to live with her daughter and soninlaw
during her
old age and be dependent upon her soninlaw
for her
maintenance. Appellant no.4
herein may not be a legal heir of the
deceased, but she certainly suffered on account of his
death.
Therefore, we have no hesitation to hold that she is a "legal
representative" under
Section 166 of the MV Act and is entitled to
maintain a claim petition.

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

multiplier?

22 The deceased was aged 52 years at the time of the accident.

He was working as an
Assistant Professor and getting a monthly
salary of Rs.83,831/(Rupees eightythree
thousand eight hundred
thirtyone only). The evidence on record shows that he was a
meritorious man having the qualifications of M.Sc, M.Phil. He was
a firstclass
holder in
M.Sc. He was a Selection Grade Lecturer in
Mathematics and was a subject expert. He was
also included in
the panel of Mahatma Gandhi University and was appointed as
Examiner in
the Board of Examiners for CBCCSS Programme in
Mathematics. Subsequently, he was
appointed as Deputy
Chairman of the Examiners Board. Evidence on record also shows
that
there is acute shortage of lecturers in Mathematics for
appointment in colleges and retired
Mathematics Professors are
appointed in so many colleges. It is common knowledge that
the
teachers, especially Mathematics teachers, are employed even after
their retirement in
coaching centers. They may also hold private
tuition classes. This would increase their
income manifold after
retirement.

23 In Sarla Verma1, this Court has held that while calculating

the compensation, the courts
should take into consideration not
only the actual income at the time of the death but should
also
make additions by taking note of future prospects. It was further
held that though the
evidence may indicate a different percentage
of increase, it is necessary to standardize the
addition to avoid
disparate yardsticks being applied or disparate methods of
calculation
being adopted.

24 In Reshma Kumari & Ors. vs. Madan Mohan & Anr., (2013) 9 SCC 65 a
threeJudge
Bench
of this Court has approved the judgment in
Sarla Verma1.

25 In Pranay Sethi2, this Court has not only approved the

aforesaid observations made in
Sarla Verma1 but also held as
under:

"59.3. While determining the income, an

addition of 50% of actual salary to the income
of the deceased towards future prospects,
where the deceased had a permanent job
and
was below the age of 40 years, should be
made. The addition should be 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, the addition should be 15%.
Actual salary should be read as
actual salary
less tax.

59.4. In case the deceased was selfemployed

or on a fixed salary, an addition of 40% of
the
established income should be the warrant
where the deceased was below the age
of 40
years. An addition of 25% where the deceased
was between the age of 40 to 50
years and
10% where the deceased was between the age
of 50 to 60 years should be
regarded as the
necessary method of computation. The
established income means the
income minus
the tax component."
26 In K.R. Madhusudhan and Ors. vs. Administrative Officer
and Anr., (2011) 4 SCC 689 this
Court was considering a case where the High
Court had applied split multiplier for the
purpose of calculation of
compensation towards loss of dependency and held as under:

"8. In Sarla Verma1 judgment the Court has

held that there should be no addition to
income for future prospects where the age of
the deceased is more than 50 years. The
learned Bench called it a rule of thumb and it
was developed so as to avoid
uncertainties in
the outcomes of litigation. However, the Bench
held that a departure
can be made in rare and
exceptional cases involving special
circumstances.

9. We are of the opinion that the rule of thumb

evolved in Sarla Verma1 is to be applied
to
those cases where there was no concrete
evidence on record of definite rise in
income
due to future prospects. Obviously, the said
rule was based on assumption and
to avoid
uncertainties and inconsistencies in the
interpretation of different courts, and
to
overcome the same."

27 In Puttamma and Ors. vs. K.L. Narayana Reddy and

Anr., (2013) 15 SCC 45 this Court was
again considering a case where split
multiplier for the purpose of calculation of dependency
compensation was applied. It was held thus:

"32. For determination of compensation in

motor accident claims under Section 166
this
Court always followed multiplier method. As
there were inconsistencies in the
selection of a
multiplier, this Court in Sarla Verma1
prepared a table for the selection of
a
multiplier based on the age group of the
deceased/victim. The 1988 Act, does not
envisage application of a split multiplier.

33. In K.R. Madhusudhan v. Administrative

Officer10 this Court held as follows: (SCC p.
692, paras 1415)

"14. In the appeal which was filed by the

appellants before the High Court, the High
Court instead of maintaining the amount of
compensation granted by the Tribunal,
reduced the same. In doing so, the High Court
had not given any reason. The High
Court
introduced the concept of split multiplier and
departed from the multiplier used
by the
Tribunal without disclosing any reason
therefor. The High Court has also not
considered the clear and corroborative
evidence about the prospect of future
increment of the deceased. When the age of the
deceased is between 51 and 55 years
the
multiplier is 11, which is specified in the 2nd
column in the Second Schedule to the
Motor
Vehicles Act, and the Tribunal has not
committed any error by accepting the said
multiplier. This Court also fails to appreciate
why the High Court chose to apply the
multiplier of 6.

15. We are, thus, of the opinion that the

judgment of the High Court deserves to be set
aside for it is perverse and clearly contrary to
the evidence on record, for having not
considered the future prospects of the
deceased and also for adopting a split
multiplier
method.

34. We, therefore, hold that in absence of any

specific reason and evidence on record
the
tribunal or the court should not apply split
multiplier in routine course and should
apply
multiplier as per decision of this Court in
Sarla Verma1 as affirmed in Reshma
Kumari9."

28 From the above discussion it is clear that at the time of

calculation of the income, the
Court has to consider the actual
income of the deceased and addition should be made to
take into
account future prospects. Further, while the evidence in a given
case may indicate
a different percentage of increase,
standardization of the addition for future prospects
should be
made to avoid different yardsticks being applied or different
methods of
calculation being adopted. In Pranay Sethi2, the
Constitution Bench has directed addition of
15% of the salary in
case the deceased was between the age of 50 to 60 years as a
thumb
rule, where a deceased had a permanent job. In view of the
above, the High Court was not
justified in applying split multiplier
in the instant case.

(III) What is the amount of compensation that should be

awarded to the appellants?

29 That takes us to the award of compensation. We have already

noticed that the deceased
was working as Assistant Professor at
Devaswom Board Pampa College, Paruamala, and
was drawing a
monthly income of Rs.83,381/which
is clear from his salary
certificate
(Ex.A5)
issued by the Principal of Devaswom Board
Pampa College, Paruamala. The salary
slip received by the
deceased for the month of May 2011 (Ex.A6)
also shows that his
monthly salary was Rs.83,381/.
These documents have been
marked in evidence through
the Principal of the said College who
was examined as PW1.
Thus, annual income of the
deceased
comes to Rs.10,00,572/.
This Court in Sarla Verma1 has made it
clear that the
Annual Income of the deceased minus the income tax
should be taken into account at the
time of his death for the
purpose of calculation of loss of dependency. The deceased had to
pay Rs.1,13,424/towards
income tax per annum. After deducting
the said amount 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 and
had a permanent job.
Having regard to the judgment in Pranay
Sethi2, an addition of 15% of his actual salary
should be added
towards future prospectus. 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, the
applicable multiplier is '11'.
As we have held that appellant no.4,
the motherinlaw
of the deceased is also a dependent
and a "legal
representative" under Section 166 of the MV Act, the total number
of
dependents left behind by the deceased is four. Hence, 1/4th of
the income (actual salary +
future prospects) should be deducted
towards his personal expenses. Thus, the total
compensation
payable towards loss of dependency is as under:

(1) (i) Annual Salary Rs.10,00,572 Rs.1,13,424

Rs.8,87,148
(ii) less Tax

(iii) Actual Salary :

(2) Future Prospects :15% of Rs.1,33,072
Actual Salary
(3) Loss of dependency : Rs.84,16,815

(1) 8,87,148 + (2) 1,33,072

- 1/4i.e. Rs.2,55,055 x 11

32 In Pranay Sethi2, this Court has awarded a total sum of

Rs.70,000/(Rupees seventy
thousand only) under conventional
heads, namely, loss of estate, loss of consortium and
funeral
expenses. It was held that the said sum should be enhanced at the
rate of 10% in
every three years. It was held thus:
 "59.8. Reasonable figures on conventional
heads, namely, loss of estate, loss of
consortium and funeral expenses should be Rs
15,000, Rs 40,000 and Rs 15,000
respectively.
The aforesaid amounts should be enhanced at
the rate of 10% in every
three years."

33 The judgment in Pranay Sethi2 was rendered in the year

2017. Therefore, the claimants
are entitled for 10% enhancement.
Thus, a sum of Rs.16,500/each
is awarded towards loss
of estate
and funeral expenses.

34 A threeJudge Bench of this Court in United India

Insurance Co. Ltd. vs. Satinder Kaur @
Satwinder Kaur and
Ors, AIR 2020 SC 3076 after considering Pranay Sethi2, has awarded
spousal
consortium at the rate of Rs.40,000/(
Rupees forty thousand only)
and towards loss
of parental consortium to each child at the rate of
Rs.40,000/(
Rupees forty thousand only).
The compensation
under these heads also needs to be increased by 10%. Thus, the
spousal
consortium is awarded at Rs.44,000/(
Fortyfour
thousand only), and towards parental
consortium at the rate of
Rs.44,000/each
(Total Rs.88,000/)
is awarded to the two
children.

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

(i) Towards Loss of dependency Rs.84,16,815/-

(ii) Loss of Estate Rs.16,500/-

(iii) Funeral Expenses Rs.16,500/-
(iv) Spousal Consortium Rs.44,000/-
(v) Parental Consortium Rs.88,000/-
Total Rs.85,81,815/-

36 The appellants are also entitled to interest on the said amount

at the rate of 7.5% per
annum from the date of the claim petition
till the date of its realization. The respondent is
accordingly
directed to deposit the above amount with accrued interest thereon
at the rate
of 7.5% per annum from the date of claim petition till
the date of deposit, after deducting
amounts, if any, deposited by
the respondent, within eight weeks from today.

37 Resultantly, the appeal is allowed in the aforesaid terms.

Parties are directed to bear their
respective costs.

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

 42
MANU/SC/0992/2021
Equivalent Citation: 2021AC J2736, AIR2021SC 5382, 2022(1)ALLMR458, 2021 (4) C C C 283 , 2021 (4) C PR 201 , 2021(4)KLJ646,
2021(4)RC R(C ivil)670, 2021(4)TAC 701, 2021 (2) TNMAC 653

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6494 of 2021 (Arising out of SLP (C) No. 13213 of 2019)
Decided On: 27.10.2021
Appellants: Jithendran
Vs.
Respondent: The New India Assurance Co. Ltd. and Ors.
Hon'ble Judges/Coram:
R. Subhash Reddy and Hrishikesh Roy, JJ.
Case Note:
Motor Vehicles - Compensation - Enhancement - Permanent disability -
Appellant, a pillion rider, suffered serious injuries - High Court enhanced
award passed by Tribunal - Compensation awarder further sought to be
enhanced - Whether plea of enhancement by adding expenses for service of
bystander could be allowed in given circumstances?
Facts:
Appellant (pillion rider) suffered serious injuries in a motor accident when the
motor cycle was hit by a car. Both riders were impacted, resulting in severe
head injuries to the Appellant. He was bedridden, totally immobilized and
initially, remained admitted in the hospital for 191 days. The Appellant also
suffered 69% permanent disability.Tribunal noted that the claimant was 21
years old and was earning around Rs. 4,500/- per month from jewellery work.
Multiplier of 17 was applied and compensation was determined.Dissatisfied
with the awarded sum, claimant moved High Court for higher compensation
which was enhanced. Appellant hasmade plea for adding expenses for service
of bystander/attendant for the severely impaired claimant. Insurer resisted
plea for further enhancement.
Held, while allowing the Appeal:
While the permanent disability as certified by the doctors stands at 69%, the
same by no means, adequately reflects the travails the impaired claimant will
have to face all his life. For the Appellant to constantly rely on them for
stimulation and support is destined to cause emotional, physical and financial
fatigue for all stakeholders.[10]
The Courts should strive to provide a realistic recompense having regard to
the realities of life, both in terms of assessment of the extent of disabilities
and its impact including the income generating capacity of the claimant.[12]
The impact on the earning capacity for the claimant by virtue of his 69%
disability must not be measured as a proportionate loss of his earning
capacity. The earning life for the Appellant is over and as such his income loss

27-01-2022 (Page 1 of 8) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 has to be quantified as 100%. There is no other way to assess the earning
loss since the Appellant is incapacitated for life and is confined to home. In
such circumstances, his loss of earning capacity must be fixed at 100%. As
his monthly income was Rs. 4,500/-, adding 40% future prospect thereto, the
monthly loss of earning is quantified as Rs. 6,300/-.Accordingly, the amount
awarded by the High Court is enhanced proportionately.[16]
Appeal allowed. The impugned judgment of the High Court stands modified to
the extent indicated.[20]

JUDGMENT
Hrishikesh Roy, J.
1. Heard Mr. A. Karthik, learned Counsel for the Appellant (claimant). Mr. J.P.N. Shahi,
learned Counsel appears for the insurance company (Respondent No. 1).
2. Leave granted. This appeal arises out of a motor accident claim following the serious
injuries suffered by the Appellant on 13.4.2001 when the motor cycle (where the
Appellant was riding pillion), was hit by a car. Both riders were impacted, resulting in
severe head injuries to the Appellant. He was bedridden, totally immobilized and
initially, remained admitted in the hospital for 191 days. The Appellant has also suffered
severe impairment of cognitive power with hemiparesis and total aphasiaand the
prognosis for him is 69% permanent disability.
3. The claim filed by the pillion riding Appellant was analogously considered with other
claimants from the same accident, by the Motor Accident Claims Tribunal, Thrissur
(hereinafter referred to as, 'the Tribunal' for short). The Presiding Officer noticed that
the severely impaired pillion rider needed support of two persons, holding him from
either side and because of his diminished cognitive facilities, the claimant appeared to
be oblivious to his surroundings before the Tribunal. He could only partially close his
mouth and consequently saliva dribbled from his mouth. The Tribunal judge noted that
the claimant was 21 years old and was earning around Rs. 4,500/- per month from
jewellery work when he suffered the accident. Considering these factors and applying
the multiplier of 17, the payable compensation for the pillion rider was determined as
Rs. 5,74,320/- by the Tribunal.
4. Dissatisfied with the awarded sum, the claimant moved the High Court of Kerala for
higher compensation. With court's permission, the claimant produced three discharge
summaries, 40 medical bills (totalling Rs. 68,196/-) and 3 medical reports issued by the
hospital where the partially disabled claimant received further treatment. Those were
considered together with the fact that Rs. 4,500/- p.m. was the earning of the claimant
as a jewellery worker for which, 40% as future prospect needed to be added. The
additional medical expenses incurred for further treatment after the initial 191 days of
hospitalization was taken into account and, towards future treatment, Rs. 1,00,000/-
was added. The nature of permanent disability of 69% was then factored in under the
relevant head and the High Court quantified a higher sum of Rs. 9,38,952/- (instead of
R s . 2,81,520/-) as compensation. Thus additional compensation for permanent
disability to the tune of Rs. 8,57,432/- was quantified by the High Court, beyond the Rs.
5,74,320/- determined by the Tribunal for the pillion rider.
5. The chart below would indicate the compensation quantified by the Tribunal and the
High Court, under different heads:

27-01-2022 (Page 2 of 8) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 6 . The learned Counsel Mr. A. Karthik for the Appellant underscores that the claimant
has suffered 69% permanent disability and is unable to perform everyday activities and
he requires constant support even for the confined life that he is leading. Accordingly
earnest plea is made for adding expenses for service of bystander/attendant for the
severely impaired claimant.
6 . 1 Since additional recurring medical exigencies are necessitated and
expenses are incurred for regular medical treatment even after the accident,
based upon the bills and hospital documents produced before the High Court,
the Appellant's counsel argues for substantial enhancement of the sum awarded
under the head of future medical expenses.
6 . 2 Because the Appellant's earning capacity is reduced to zero,
(notwithstanding his 69% permanent disability), the logic of restricting the
compensation to 69% under the head of permanent disability is questioned and
Mr. Karthik, the learned Counsel submits that the correct figure should be
reached by treating it as 100% loss of future earnings.
6 .3 Considering the fact that the injured Appellant was hospitalized for 191
days and was off work, the lower quantification of his six months loss of
earning at Rs. 12,000/-, when income is accepted as Rs. 4500/-, is questioned
by the Appellant's counsel and he argues that the loss of earning should be
quantified at Rs. 27,000/- (instead of Rs. 12,000/-,) under the relevant head.
7. On the other hand, Mr. JPN Shahi, the learned Counsel appearing for the Insurance
Company submits that when 69% percent permanent disability is suffered, the sum
quantified by the High Court at 69% level, requires no enhancement.
7.1 It is further pointed out by the learned Counsel that the High Court has
already awarded Rs. 1,00,000/- towards future medical expenses and the
Appellant is disentitled to claim any further sum on the said count.
7.2 Insofar as the claim for expenses for a bystander/attendant, the learned
Counsel submits that no material is produced by the claimant on the actual
expenses incurred for service of attendant and accordingly it is argued that no
further claim is merited under this head.
8 . As earlier noted, the Appellant has suffered 69% permanent disability and without
assistance, cannot perform everyday functions. The claimant with seriously impaired
cognitive and physical capabilities would surely need full time assistance even for the
confined life that he is leading. In such circumstances, the disabled claimant cannot be
expected to rely only upon gratuitous services of his well-wishers and family members.
Importantly, the presiding judge in the Tribunal himself noticed that the claimant would

27-01-2022 (Page 3 of 8) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 require the assistance of a bystander/attendant for all his movements. Consequently,
bearing in mind the need for assisted living and what was said in Kajal v. Jagdish
Chand and Ors. MANU/SC/0126/2020 : (2020) 4 SCC 413, it is found necessary to add
the expenses for service of an attendant for the claimant. Since no material is produced
to quantify the expenses for the attendant, making a conservative estimate, Rs. 5,000/-
per month appears to be the bare minimum. It is therefore deemed appropriate to
quantify the annual expenses at Rs. 60,000/- and applying the multiplier of 18, the
additional compensation payable under the bystander head is quantified at Rs.
10,80,000/-.
9 . The Appellant has produced adequate medical documents before the High Court to
show the recurring needs for testing, treatment and further hospitalisation for which,
considerable expenses were incurred even after the initial 191 days of hospitalization.
As a person suffering severe cognitive impairment and 69% disability, recurring medical
treatment is inevitable and bearing in mind the additional expenses already incurred, we
deem it appropriate to enhance the future medical expenses to Rs. 3,00,000/- (from Rs.
1,00,000/-), since the sum quantified by the High Court appears to be on the lower
side.
10. While the permanent disability as certified by the doctors stands at 69%, the same
by no means, adequately reflects the travails the impaired claimant will have to face all
his life. The 21 year old's youthful dreams and future hopes were snuffed out by the
serious accident. The young man's impaired condition has certainly impacted his family
members. Their resources and strength are bound to be stressed by the need to provide
full time care to the claimant. For the Appellant to constantly rely on them for
stimulation and support is destined to cause emotional, physical and financial fatigue
for all stakeholders.
1 1 . The Motor Vehicles Act is in the nature of social welfare legislation and its
provisions make it clear that the compensation should be justly determined. Justice A.P.
Misra in Helen C. Rebello and Ors. v. Maharashtra SRTC and Anr. MANU/SC/0621/1998
: (1999) 1 SCC 90, held the following on the contours of 'just' compensation,
The word "just", as its nomenclature, denotes equitability, fairness and
reasonableness having a large peripheral field. The largeness is, of course, not
arbitrary; it is restricted by the conscience which is fair, reasonable and
equitable, if it exceeds; it is termed as unfair, unreasonable, unequitable, not
just.
A person therefore is not only to be compensated for the injury suffered due to the
accident but also for the loss suffered on account of the injury and his inability to lead
the life he led, prior to the life-altering event. Justice D.Y. Chandrachud speaking for a
three judges' bench in Jagdish v. Mohan and Ors. MANU/SC/0209/2018 : (2018) 4 SCC
571 makes the following relevant observation on the intrinsic value of human life and
dignity that is attempted to be recognised, through such compensatory awards,
...the measure of compensation must reflect a genuine attempt of the law to
restore the dignity of the being. Our yardsticks of compensation should not be
so abysmal as to lead one to question whether our law values human life. If it
does, as it must, it must provide a realistic recompense for the pain of loss and
the trauma of suffering. Awards of compensation are not law's doles. In a
discourse of rights, they constitute entitlements under law.
12. The Courts should strive to provide a realistic recompense having regard to the

27-01-2022 (Page 4 of 8) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 realities of life, both in terms of assessment of the extent of disabilities and its impact
including the income generating capacity of the claimant. In cases of similar nature,
wherein the claimant is suffering severe cognitive dysfunction and restricted mobility,
the Courts should be mindful of the fact that even though the physical disability is
assessed at 69%, the functional disability is 100% in so far as claimant's loss of earning
capacity is concerned.
1 3 . The extent of economic loss arising from a disability may not be measured in
proportions to the extent of permanent disability. This aspect was noticed in Raj Kumar
v. Ajay Kumar and Anr. MANU/SC/1018/2010 : (2011) 1 SCC 343, where Justice R.V.
Raveendran made the following apt observations:
10. Where the claimant suffers a permanent disability as a result of injuries,
the assessment of compensation under the head of loss of future earnings
would depend upon the effect and impact of such permanent disability on his
earning capacity. The Tribunal should not mechanically apply the percentage of
permanent disability as the percentage of economic loss or loss of earning
capacity. In most of the cases, the percentage of economic loss, that is, the
percentage of loss of earning capacity, arising from a permanent disability will
be different from the percentage of permanent disability. Some Tribunals
wrongly assume that in all cases, a particular extent (percentage) of permanent
disability would result in a corresponding loss of earning capacity, and
consequently, if the evidence produced shows 45% as the permanent disability,
will hold that there is 45% loss of future earning capacity. In most of the cases,
equating the extent (percentage) of loss of earning capacity to the extent
(percentage) of permanent disability will result in award of either too low or
too high a compensation.
11. What requires to be assessed by the Tribunal is the effect of the permanent
disability on the earning capacity of the injured; and after assessing the loss of
earning capacity in terms of a percentage of the income, it has to be quantified
in terms of money, to arrive at the future loss of earnings (by applying the
standard multiplier method used to determine loss of dependency). We may
however note that in some cases, on appreciation of evidence and assessment,
the Tribunal may find that the percentage of loss of earning capacity as a result
of the permanent disability, is approximately the same as the percentage of
permanent disability in which case, of course, the Tribunal will adopt the said
percentage for determination of compensation.
1 4 . The test for determining the effect of permanent disability on future earning
capacity involves the following 3 steps as was laid down in Raj Kumar1 and reiterated
by Justice Indu Malhotra in Chanappa Nagappa Muchalagoda v. Divisional Manager, New
India Insurance Co. Limited MANU/SC/1714/2019 : (2020) 1 SCC 796.
1 3 . Ascertainment of the effect of the permanent disability on the actual
earning capacity involves three steps. The Tribunal has to first ascertain what
activities the claimant could carry on in spite of the permanent disability and
what he could not do as a result of the permanent disability (this is also
relevant for awarding compensation under the head of loss of amenities of life).
The second step is to ascertain his avocation, profession and nature of work
before the accident, as also his age. The third step is to find out whether (i) the
claimant is totally disabled from earning any kind of livelihood, or (ii) whether
in spite of the permanent disability, the claimant could still effectively carry on

27-01-2022 (Page 5 of 8) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 the activities and functions, which he was earlier carrying on, or (iii) whether
he was prevented or restricted from discharging his previous activities and
functions, but could carry on some other or lesser scale of activities and
functions so that he continues to earn or can continue to earn his livelihood.
15. The above yardstick to be adopted in such exigencies was reaffirmed by Justice S.
Ravindra Bhat in Pappu Deo Yadav v. Naresh Kumar and Ors. The following was set out
by the three Judges' Bench:
13. The factual narrative discloses that the Appellant, a 20-year-old data entry
operator (who had studied up to 12th standard) incurred permanent disability,
i.e. loss of his right hand (which was amputated). The disability was assessed
to be 89%. However, the tribunal and the High Court reassessed the disability
to be only 45%, on the assumption that the assessment for compensation was
to be on a different basis, as the injury entailed loss of only one arm. This
approach, in the opinion of this Court, is completely mechanical and entirely
ignores realities. Whilst it is true that assessment of injury of one limb or to
one part may not entail permanent injury to the whole body, the inquiry which
the court has to conduct is the resultant loss which the injury entails to the
earning or income generating capacity of the claimant. Thus, loss of one leg to
someone carrying on a vocation such as driving or something that entails
walking or constant mobility, results in severe income generating impairment or
its extinguishment altogether. Likewise, for one involved in a job like a
carpenter or hairdresser, or machinist, and an experienced one at that, loss of
an arm, (more so a functional arm) leads to near extinction of income
generation. If the age of the victim is beyond 40, the scope of rehabilitation too
diminishes. These individual factors are of crucial importance which are to be
borne in mind while determining the extent of permanent disablement, for the
purpose of assessment of loss of earning capacity.
20. Courts should not adopt a stereotypical or myopic approach, but instead,
view the matter taking into account the realities of life, both in the assessment
of the extent of disabilities, and compensation under various heads. In the
present case, the loss of an arm, in the opinion of the court, resulted in severe
income earning impairment upon the Appellant. As a typist/data entry operator,
full functioning of his hands was essential to his livelihood. The extent of his
permanent disablement was assessed at 89%; however, the High Court halved
it to 45% on an entirely wrong application of some 'proportionate' principle,
which was illogical and is unsupportable in law. What is to be seen, as
emphasized by decision after decision, is the impact of the injury upon the
income generating capacity of the victim. The loss of a limb (a leg or arm) and
its severity on that account is to be judged in relation to the profession,
vocation or business of the victim; there cannot be a blind arithmetic formula
for ready application. On an overview of the principles outlined in the previous
decisions, it is apparent that the income generating capacity of the Appellant
was undoubtedly severely affected. Maybe, it is not to the extent of 89%, given
that he still has the use of one arm, is young and as yet, hopefully training (and
rehabilitating) himself adequately for some other calling. Nevertheless, the
assessment of disability cannot be 45%; it is assessed at 65% in the
circumstances of this case.
16. As noted earlier, the impact on the earning capacity for the claimant by virtue of his
69% disability must not be measured as a proportionate loss of his earning capacity.

27-01-2022 (Page 6 of 8) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 The earning life for the Appellant is over and as such his income loss has to be
quantified as 100%. There is no other way to assess the earning loss since the
Appellant is incapacitated for life and is confined to home. In such circumstances, his
loss of earning capacity must be fixed at 100%. As his monthly income was Rs. 4,500/-,
adding 40% future prospect thereto, the monthly loss of earning is quantified as Rs.
6,300/-. We therefore deem it appropriate to quantify Rs. 13,60,800/- (Rs. 6,300 x 12 x
18) as compensation for 100% loss of earning for the claimant. Accordingly, under this
head, the amount awarded by the High Court is enhanced proportionately.
17. The lesser amount for 6 months earning loss during hospitalization, must also be
corrected. The claimant was awarded Rs. 12,000/- for his hospitalization in the
aftermath of the accident. But the lower figure does not correctly correspond to six
months loss, when the income was Rs. 4500/- p.m. Accordingly, the amount under this
head is corrected as Rs. 27,000/- (Rs. 4,500 x 6).
18. Following the above conclusion, additional compensation is found merited for the
Appellant and the same is ordered. The payable amount under the four specific heads is
indicated as under:

The above quantified sum should be paid by the first Respondent, within six weeks from
today. Any amount paid earlier under these heads, may be adjusted during payment to
the Appellant. It is ordered accordingly.
19. Before parting, it needs emphasizing that in cases such as this, the Tribunal and the
Courts must be conscious of the fact that the permanent disability suffered by the
individual not only impairs his cognitive abilities and his physical facilities but there are
multiple other non-quantifiable implications for the victim. The very fact that a healthy
person turns into an invalid, being deprived of normal companionship, and incapable of
leading a productive life, makes one suffer the loss of self-dignity. Such a Claimant
must not be viewed as a modern day Oliver Twist, having to make entreaties as the boy
in the orphanage in Charles Dickens's classic, "Please Sir, I want some more". The
efforts must be to substantially ameliorate the misery of the claimant and recognize his
actual needs by accounting for the ground realities. The measures should however be in
correct proportion. As is aptly said by Justice R.V. Raveendran, while speaking for the
Division Bench in Sarla Verma and Ors. v. Delhi Transport Corporation and Anr.
MANU/SC/0606/2009 : (2009) 6 SCC 121, just compensation is adequate compensation
and the Award must be just that-no less and no more. The plea of the victim suffering
from a cruel twist of fate, when asking for some more, is not extravagant but is for
seeking appropriate recompense to negotiate with the unforeseeable and the fortuitous
twists is his impaired life. Therefore, while the money awarded by Courts can hardly
redress the actual sufferings of the injured victim (who is deprived of the normal
amenities of life and suffers the unease of being a burden on others), the courts can
make a genuine attempt to help restore the self-dignity of such claimant, by awarding
'just compensation'.
2 0 . With the above observation and enhancement of compensation, the claimant's

27-01-2022 (Page 7 of 8) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 appeal stands allowed. The impugned judgment of the High Court stands modified to
the extent indicated above. The parties to bear their respective cost.

1 Ibid

© Manupatra Information Solutions Pvt. Ltd.

27-01-2022 (Page 8 of 8) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 43

2021 (0) AIJEL-SC 67995

SUPREME COURT OF INDIA

(JHARKHAND HIGH COURT)

Hon'ble Judges:R.Subhash Reddy and Hrishikesh Roy JJ.

Kurvan Ansari Alias Kurvan Ali Versus Shyam Kishore Murmu

CIVIL APPEAL No. 6902 of 2021 ; *J.Date :- NOVEMBER 16, 2021

MOTOR VEHICLES ACT, 1988 Section - 163A

Cases Referred To :

1. Kishan Gopal & Anr. V. Lala & Ors., 2014 1 SCC 244 : 2014 AIR SC(Supp) 173 : 2013 (10)
Scale 580 : JT 2013 (11) 563 : 2013 (10) SCR 793
2. Puttamma & Ors. V. K.L. Narayana Reddy & Anr., 2013 15 SCC 45 : 2014 AIR SC 706 :
2013 (15) Scale 437 : JT 2014 (2) 201 : 2014 AIR SCW 165
3. R.K. Malik & Anr. V. Kiran Pal & Ors., 2009 14 SCC 1 : 2009 AIR SC 2506 : 2009 (8) Scale
451 : JT 2009 (8) 461 : 2009 AIR SCW 4381
4. Rajendra Singh & Ors. V. National Insurance Company Limited & Ors., 2020 7 SCC 256 :
2020 AIR SC 3144 : 2020 (7) Scale 770 : 2020 (3) SCC(Cri) 134 : 2020 (3) RCR(Civ) 26

Equivalent Citation(s):
JT 2021 (11) SC 323 : 2021 JX(SC) 778

JUDGMENT :-

R.SUBHASH REDDY, J.

1 Leave Granted.

2 This Civil Appeal is preferred by the appellants - claimants in M.A. No.66 of 2011, preferred
before the High Court of Jharkhand at Ranchi, aggrieved by the judgment and order dated
03.08.2018.

3 Necessary facts, in brief, for disposal of this Appeal are that on 06.09.2004, while the son
of the appellants - claimants viz., Ibran Ali, a boy aged about 7 (seven) years studying in
Class-II, was standing by the side of the road in front of his maternal grandparents' house, a
motorcycle has dashed him causing grievous injuries resulting in his death. The said vehicle
was driven by one Mr.Sunil Gurum and owned by respondent No.1 and insured with
respondent No.2.
4 On account of the said accident which resulted the
death of the child of the claimants, they
filed a Claim
Petition under Section 163-A of the Motor Vehicles Act,
1988 claiming
compensation. Before the Motor Accidents
Claims Tribunal, it was the case of the claimants
that
the accident has occurred due to rash and negligent
driving of the driver of the
offending motorcycle; the
deceased boy was aged about 7 years at the time of
accident and
he was studying in Class-II. The Tribunal
by appreciating oral and documentary evidence on
record, has come to the conclusion that the accident
has occurred due to rash and negligent
driving of the
motorcycle's driver viz., Sunil Gurum. The Tribunal,
considering notional
income of the deceased at
Rs.15,000/- per annum, by applying multiplier '15',
awarded
compensation of Rs.2,25,000/- with interest @6%
per annum from the date of judgment.
Since the driver
of the offending motorcycle Mr.Sunil Gurum was not
possessing valid
driving licence at the time of
accident, the Tribunal directed respondent No.2
-Insurance
Company to pay the compensation to the
claimants and recover the same from its owner.

5 Pleading contributory negligence, the insurance

company had preferred M.A. No.115 of
2011, for
enhancement of compensation, the claimants have
preferred M.A. No.66 of 2011,
before the High Court of
Jharkhand at Ranchi.

6 By the impugned judgment, the High Court has

dismissed the appeal preferred by the
Insurance Company
and partly allowed the appeal preferred by the
claimants by awarding a
further sum of Rs.15,000/-
towards funeral expenses. Thus, it is held that the
appellants are
entitled to a sum of Rs.2,40,000/-
towards compensation with interest as awarded by the
Tribunal from the date of filing Claim Petition.

7 We have heard Sri S.N. Bhat, learned counsel for

the appellants, and Sri V.S. Chopra,
learned counsel
for respondent No.2 - Insurance Company.

8 Sri S.N. Bhat, learned counsel for the appellants,

mainly contended that the compensation
awarded by the
Tribunal as confirmed by the High Court is on lower
side and is not just and
fair. The learned counsel has
contended that the compensation was awarded by assuming
income of the deceased notionally at Rs.15,000/- per
annum as per Schedule-II of the Motor
Vehicles Act,
1988 which is applicable to the claims made under
Section 163-A of the Motor
Vehicles Act, 1988 . It is
submitted that the notional income of Rs.15,000/- was
fixed as
early as in the year 1994 and somehow, the
same is continued in the statute without any
amendment
in spite of repeated directions by this Court. It is
submitted that in view of the
provision under Section
163-A(3) of the Motor Vehicles Act 1988, though it was
obligatory
on the part of the Government to amend
Schedule-II, same as fixed in the year 1994,
continued
since then. Thus, it is submitted that the notional
income as fixed, is to be
considered by taking into
account increase in the cost of living. In support of
his arguments,
the learned counsel for the appellants
has relied on the judgments of this Court in the cases
of Puttamma & Ors. v. K.L. Narayana Reddy & Anr., (2013) 15 SCC 45 R.K.
Malik & Anr. v.
Kiran Pal & Ors., (2009) 14 SCC 1 and Kishan Gopal &
Anr. v. Lala & Ors., (2014) 1 SCC 244.

9 On the other hand, Sri V.S. Chopra, learned counsel

for respondent No.2 - Insurance
Company, has submitted
that there are no grounds to interfere with the
impugned judgment
of the High Court and placed reliance
on the judgment of this Court in the case of Rajendra
Singh & Ors. v. National Insurance Company Limited &
Ors., (2020) 7 SCC 256.

10 Having heard the learned counsel for the parties,

we have perused the impugned
judgment and the other
material placed on record.

11 As the claim was made under Section 163-A of the

Motor Vehicles Act 1988, since the
deceased child was
not an earning member, the Tribunal has considered
notional income as
per Schedule-II for the purpose of
fixing compensation. The Tribunal has awarded
compensation by taking notional income of the deceased
at Rs.15,000/- per annum by
applying multiplier '15',
awarded compensation of Rs.2,25,000/- towards loss of
dependency
with interest @ 6% per annum from the date
of judgment. When the appeals are preferred by
the
Insurance Company as well as the appellants herein, by
the impugned common
judgment, the High Court has
dismissed the appeal preferred by the Insurance
Company,
and in the appeal preferred by the claimants,
while confirming the compensation awarded
for loss of
dependency at Rs.2,25,000/-, has awarded a further sum
of Rs.15,000/- towards
funeral expenses and accordingly
granted a total compensation of Rs.2,40,000/- with
interest @6% per annum payable by respondent No.2 -
Insurance Company and by
permitting it to recover the
same from Respondent No.1 - owner of the motorcycle.

12 In the judgment in the case of Puttamma & Ors.1,

this Court has observed that the
Central Government was
bestowed with the duties to amend Schedule-II in view
of Section
163-A(3) of the Motor Vehicles Act 1988, but
it failed to do so. In view of the same, specific
directions were issued to the Central Government to
make appropriate amendments to
Schedule-II keeping in
mind the present cost of living. In the said judgment,
till such
amendments are made, directions were issued
for award of compensation by fixing a sum
of
Rs.1,00,000/- (Rupees one lakh only) towards
compensation for the non-earning children
up to the age
of 5 (five) years old and a sum of Rs.1,50,000/-
(Rupees one lakh fifty thousand
only) for the nonearning persons of more than 5 (five) years old.

13 In the case of R.K. Malik & Anr.2 also, this Court

has observed that the notional income
fixed under
Section 163-A of the Motor Vehicles Act, 1988 as
Rs.15,000/- per annum should
be enhanced and increased
as the same continued to exist without any amendment
since
14.11.1994. In the case of Kishan Gopal & Anr.3
where the deceased was a ten years old
child, this
Court has fixed his notional income at Rs.30,000/- per
annum.

14 In this case, it is to be noted that the accident

was on 06.09.2004. In spite of repeated
directions,
Schedule-II is not yet amended. Therefore, fixing
notional income at Rs.15,000/-
per annum for nonearning members is not just and reasonable.

15 In view of the judgments in the cases in Puttamma

& Ors.1, R.K. Malik & Anr.2 and Kishan
Gopal & Anr.3, we
are of the view that it is a fit case to increase the
notional income by
taking into account the inflation,
devaluation of the rupee and cost of living. In view of
the
same, the judgment in the case of Rajendra Singh &
Ors.4 relied on by the learned counsel
for respondent
No.2-Insurance Company would not render any assistance
to the case of the
insurance company.

16 In view of the above, we deem it appropriate to

take notional income of the deceased at
Rs.25,000/-
(Rupees twenty five thousand only) per annum.
Accordingly, when the notional
income is multiplied
with applicable multiplier '15', as prescribed in
Schedule-II for the
claims under Section 163-A of the
Motor Vehicles Act 1988, it comes to Rs.3,75,000/-
(Rs.25,000/- x Multiplier 15) towards loss of
dependency. The appellants are also entitled to
a sum
of Rs.40,000/- each towards filial consortium and
Rs.15,000/- towards funeral
expenses. Thus, the
appellants are entitled to the following amounts
towards compensation:

(a) Loss of Dependency : RS. 3,75,000-00

(b) Filial Consortium : RS. 80,000-00
(RS.40,000/- X 2)
(c) Funeral Expenses : RS. 15,000-00
 Total : RS. 4,70,000-00

17 Accordingly, the appellants are entitled for a sum

of Rs.4,70,000/- (Rupees four lakhs
seventy thousand
only) towards total compensation with interest at 6%
per annum from the
date of claim petition till the date
of realisation. The enhanced compensation shall be
apportioned between the appellants as ordered by the
Tribunal. The entire compensation
shall be paid to the
appellants by respondent No.2 - Insurance Company, and
we keep it
open to the Insurance Company to recover the
same from respondent No.1 - owner of the
motorcycle by
initiating appropriate proceedings as the motorcycle
was driven by the driver
who was not possessing valid
driving licence on the date of the accident.

18 Accordingly, this Civil Appeal is allowed partly

with directions as indicated above. No
order as to costs.
 44
MANU/SC/1088/2021
Equivalent Citation: 2022(1)RC R(C ivil)222, 2021 (2) TNMAC 790

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6724 of 2021
Decided On: 18.11.2021
Appellants: Meena Pawaia and Ors.
Vs.
Respondent: Ashraf Ali and Ors.
Hon'ble Judges/Coram:
M.R. Shah and Sanjiv Khanna, JJ.
Case Category:
COMPENSATION MATTER - MOTOR ACCIDENT CLAIM MATTERS INVOLVING PERMANENT
DISABILITY/DEATH OF PERSONS
JUDGMENT
M.R. Shah, J.
1 . Feeling aggrieved and dissatisfied with the impugned judgment and order dated
18.02.2020 passed by the High Court of Madhya Pradesh Bench at Gwalior in MA No.
1319 of 2016, by which the High Court has partly allowed the said appeal preferred by
the Union of India/Railways and has reduced the amount of compensation from Rs.
12,85,000/- (awarded by the claims tribunal) to Rs. 6,10,000/-, the original claimants
have preferred the present appeal.
2. In an accident which occurred on 12.09.2012, the son of the original claimants, Mr.
Prashant died. The deceased at the time of accident was a bachelor, aged 21 years and
was studying in 3rd year of B.E. The original claimants-mother, father, brother and
sister of the deceased filed the claim petition before the Motor Accident Claims Tribunal
(MACT), being MACT case No. 1/2013 claiming Rs.25 lakhs as compensation on
different heads. It was the case on behalf of the original claimants that the deceased at
the relevant time was earning Rs. 8,000/- per month as he was engaged in tuition of
other students. On appreciation of evidence the learned Tribunal held that the deceased
died due to rash and negligence on the part of the driver of the truck involved in the
accident. The learned Tribunal assessed the monthly income of the deceased as Rs.
15,000/- per month, disbelieving the case on behalf of the claimants that he was
getting Rs. 25,000/- as salary from one Nectal Construction Company. Learned Tribunal
also disbelieved the fact about earning of Rs. 8,000/- by the deceased per month from
private tuition. However considering the young age and the educational qualification,
the learned Tribunal keeping in mind the nature of work to be done by him in future and
his future prospect, considered the future loss of income at Rs. 15,000/- per month.
The learned Tribunal deducted ½ over his own personal expenses as he was a bachelor.
However, the learned Tribunal applied the multiplier on the basis of the age of the
parents of the deceased and consequently applied the 14 multiplier and awarded Rs.
12,60,000/- towards future loss of income. The learned Tribunal also awarded Rs.
25,000/- under other head, namely on the head of the last rites of the deceased.
Learned Tribunal in all awarded Rs. 12,85,000/- with 7.5% interest per annum.

27-01-2022 (Page 1 of 7) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 3 . Feeling aggrieved and dissatisfied with the judgment and award dated 16.09.2016
passed by the learned Tribunal, both, the original claimants as well as Union of India
preferred separate appeals before the High Court. Union of India preferred MA No. 1276
of 2016 and original claimants preferred MA No. 1319 of 2016. By the impugned
judgment and order, the High Court has reduced the amount of compensation from Rs.
12,85,000/- to Rs. 6,10,000/- assessing the income of the deceased at Rs. 5,000/- per
month instead of Rs. 15,000/- per month as determined and awarded by the learned
Tribunal. The High Court corrected the error committed by the learned Tribunal and
applied the multiplier considering the age of the deceased and applied the multiplier of
18 and has awarded Rs. 5,40,000/- under the head of future loss of income. Thereafter
it has further awarded Rs. 15,000/- as loss of estate; Rs. 15,000/- as funeral expenses
and Rs. 40,000/- as loss of love and affection. The High Court has awarded a total sum
of Rs. 6,10,000/- instead of Rs. 12,85,000/- as awarded by the learned Tribunal.
4. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by
the High Court reducing the amount of compensation from Rs. 12,85,000/- to Rs.
6,10,000/-, determining the future loss of income at Rs. 5,000/- per month, original
claimants have preferred the present appeal.
5 . Learned Counsel appearing on behalf of the Appellants-original claimants has
vehemently submitted that looking to the educational qualification and the bright future,
the High Court has committed a grave error in considering the income of the deceased
at Rs. 5,000/- per month only.
5.1. It is submitted that the deceased at the time of accident was aged 21-22 years and
was studying in B.E. and considering the fact that even the labourers were getting Rs.
5,000/- per month even under the Minimum Wages Act in the year 2012, the High Court
ought not to have considered the income of deceased at Rs. 5,000/- per month.
5.2. It is further submitted that the High Court has not considered the future rise in
income while awarding the future loss of income.
6 . Leaned counsel appearing on behalf of the Union of India is not in a position to
support the impugned judgment and order passed by the High Court awarding the
future loss of income considering the income of the deceased at Rs. 5,000/- per month.
However, it is submitted that as the deceased was not earning anything at the time of
accident and as the case on behalf of the claimants that he was earning Rs. 25,000/- as
a salary from Nectal Construction Company and that he was earning Rs. 8,000/- from
private tuition has been disbelieved and thereby he was not earning at all at the time of
death, there shall not be any future rise in income while determining the future loss of
income. It is further submitted by the learned Counsel appearing on behalf of the Union
of India that in the execution proceedings the entire amount as awarded by the High
Court is paid, the claimants have stated that they accept the same as full and final
settlements and therefore the present appeal may not be entertained.
7. We have heard the learned Counsel appearing on behalf of the respective parties at
length.
8 . At the outset, it is required to be noted that deceased at the time of accident was
aged 21-22 years and that he was a 3rd year student in civil engineering. Therefore, it
can be said that looking to his educational qualification he was having a bright future.
Learned Tribunal assessed the income of deceased at Rs. 15,000/- per month for the
purpose of awarding compensation under the head of future economic loss. However,
by the impugned judgment and order, the High Court has reduced the compensation

27-01-2022 (Page 2 of 7) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 and determined the income of the deceased at Rs. 5,000/- per month. Awarding the
future economic loss to the claimants considering the income of the deceased as Rs.
5,000/- is not sustainable at all. Even the labourers/skilled labourers were getting Rs.
5,000/- per month under the Minimum Wages Act in the year 2012. As the deceased
was studying in the 3rd/4th semester of civil engineering, he cannot be considered
worse than the labourers/skilled labourers. Even the counsel appearing on behalf of the
Union of India has fairly conceded that assessing the income of deceased at Rs. 5,000/-
per month for the purpose of awarding the compensation under the head of future
economic loss can be said to be at lower side and as such is not justifiable. While
awarding the future economical loss, when the deceased died at the young age 21-22
years and was not earning at the time of death/accident, as per catena of decisions of
this Court, the income for the purpose of determining the future economic loss is
always done on the basis of guesswork considering many circumstances namely the
educational qualification and background of the family, etc. Therefore looking to the
educational qualification and the family background and as observed herein above, the
deceased was having a bright future studying in the 3rd year of civil engineering, we
are of the opinion that the income of the deceased at least ought to have been
considered at least Rs. 10,000/- per month, more particularly considering the fact that
the labourers/skilled labourers were getting Rs. 5,000/- per month even under the
Minimum Wages Act in the year 2012.
9. The next question which is posed for the consideration before this Court is whether
anything further is required to be added towards the future rise in income? It is
submitted that on behalf of the Union of India that as the deceased was not serving and
earning at the time of accident/death nothing further is to be added towards the future
prospect/future rise in income. The aforesaid cannot be accepted.
1 0 . At this stage, the decision of this Court in the case of National Insurance Co.
Limited v. Pranay Sethi and Ors. MANU/SC/1366/2017 : (2017) 16 SCC 680, on
addition of future prospects to determine the multiplicand is required to be referred to
and considered. In the aforesaid decision the Constitution Bench of this Court had an
occasion to consider in detail the justification for addition of future prospects. In the
aforesaid decision it is observed and held that while determining the income, an
addition of 50% of actual salary to the income of the deceased towards future
prospects, where the deceased had a permanent job and was below the age of 40 years,
should be made. The addition should be 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, the
addition should be 15%. Actual salary should be read as actual salary less tax. It is also
further held that in case the deceased was self-employed or on a fixed salary, an
addition of 40% of the established income should be the warrant where the deceased
was below the age of 40 years. An addition of 25% where the deceased was between
the age of 40 to 50 years and 10% where the deceased was between the age of 50 to
60 years should be regarded as the necessary method of computation. It is also further
held that the established income means the income minus the tax component. While
holding so in paras 54 to 57, it is observed and held as under:
5 4 . In Santosh Devi [Santosh Devi v. National Insurance Co. Ltd.,
MANU/SC/0322/2012 : (2012) 6 SCC 421] the Court has not accepted as a
principle that a self-employed person remains on a fixed salary throughout his
life. It has taken note of the rise in the cost of living which affects everyone
without making any distinction between the rich and the poor. Emphasis has
been laid on the extra efforts made by this category of persons to generate
additional income. That apart, judicial notice has been taken of the fact that the

27-01-2022 (Page 3 of 7) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 salaries of those who are employed in private sectors also with the passage of
time increase manifold. In Rajesh case [Sarla Verma v. DTC,
MANU/SC/0606/2009 : (2009) 6 SCC 121], the Court had added 15% in the
case where the victim is between the age group of 15 to 60 years so as to make
the compensation just, equitable, fair and reasonable. This addition has been
made in respect of self-employed or engaged on fixed wages.
55. Section 168 of the Act deals with the concept of "just compensation" and
the same has to be determined on the foundation of fairness, reasonableness
and equitability on acceptable legal standard because such determination can
never be in arithmetical exactitude. It can never be perfect. The aim is to
achieve an acceptable degree of proximity to arithmetical precision on the basis
of materials brought on record in an individual case. The conception of "just
compensation" has to be viewed through the prism of fairness, reasonableness
and non-violation of the principle of equitability. In a case of death, the legal
heirs of the claimants cannot expect a windfall. Simultaneously, the
compensation granted cannot be an apology for compensation. It cannot be a
pittance. Though the discretion vested in the tribunal is quite wide, yet it is
obligatory on the part of the tribunal to be guided by the expression, that is,
"just compensation". The determination has to be on the foundation of evidence
brought on record as regards the age and income of the deceased and
thereafter the apposite multiplier to be applied. The formula relating to
multiplier has been clearly stated in Sarla Verma [Sarla Verma v. DTC,
MANU/SC/0606/2009 : (2009) 6 SCC 121] and it has been approved in Reshma
Kumari [Reshma Kumari v. Madan Mohan, MANU/SC/0287/2013 : (2013) 9 SCC
65]. The age and income, as stated earlier, have to be established by adducing
evidence. The tribunal and the courts have to bear in mind that the basic
principle lies in pragmatic computation which is in proximity to reality. It is a
well-accepted norm that money cannot substitute a life lost but an effort has to
be made for grant of just compensation having uniformity of approach. There
has to be a balance between the two extremes, that is, a windfall and the
pittance, a bonanza and the modicum. In such an adjudication, the duty of the
tribunal and the courts is difficult and hence, an endeavour has been made by
this Court for standardisation which in its ambit includes addition of future
prospects on the proven income at present. As far as future prospects are
concerned, there has been standardisation keeping in view the principle of
certainty, stability and consistency. We approve the principle of
"standardisation" so that a specific and certain multiplicand is determined for
applying the multiplier on the basis of age.
56. The seminal issue is the fixation of future prospects in cases of deceased
who are self-employed or on a fixed salary. Sarla Verma [Sarla Verma v. DTC,
MANU/SC/0606/2009 : (2009) 6 SCC 121] has carved out an exception
permitting the claimants to bring materials on record to get the benefit of
addition of future prospects. It has not, per se, allowed any future prospects in
respect of the said category.
57. Having bestowed our anxious consideration, we are disposed to think when
we accept the principle of standardisation, there is really no rationale not to
apply the said principle to the self-employed or a person who is on a fixed
salary. To follow the doctrine of actual income at the time of death and not to
add any amount with regard to future prospects to the income for the purpose
of determination of multiplicand would be unjust. The determination of income

27-01-2022 (Page 4 of 7) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 while computing compensation has to include future prospects so that the
method will come within the ambit and sweep of just compensation as
postulated Under Section 168 of the Act. In case of a deceased who had held a
permanent job with inbuilt grant of annual increment, there is an acceptable
certainty. But to state that the legal representatives of a deceased who was on a
fixed salary would not be entitled to the benefit of future prospects for the
purpose of computation of compensation would be inapposite. It is because the
criterion of distinction between the two in that event would be certainty on the
one hand and staticness on the other. One may perceive that the comparative
measure is certainty on the one hand and uncertainty on the other but such a
perception is fallacious. It is because the price rise does affect a self-employed
person; and that apart there is always an incessant effort to enhance one's
income for sustenance. The purchasing capacity of a salaried person on
permanent job when increases because of grant of increments and pay revision
or for some other change in service conditions, there is always a competing
attitude in the private sector to enhance the salary to get better efficiency from
the employees. Similarly, a person who is self-employed is bound to garner his
resources and raise his charges/fees so that he can live with same facilities. To
have the perception that he is likely to remain static and his income to remain
stagnant is contrary to the fundamental concept of human attitude which always
intends to live with dynamism and move and change with the time. Though it
may seem appropriate that there cannot be certainty in addition of future
prospects to the existing income unlike in the case of a person having a
permanent job, yet the said perception does not really deserve acceptance. We
are inclined to think that there can be some degree of difference as regards the
percentage that is meant for or applied to in respect of the legal representatives
who claim on behalf of the deceased who had a permanent job than a person
who is self-employed or on a fixed salary. But not to apply the principle of
standardisation on the foundation of perceived lack of certainty would
tantamount to remaining oblivious to the marrows of ground reality. And,
therefore, degree-test is imperative. Unless the degree-test is applied and left
to the parties to adduce evidence to establish, it would be unfair and
inequitable. The degree-test has to have the inbuilt concept of percentage.
Taking into consideration the cumulative factors, namely, passage of time, the
changing society, escalation of price, the change in price index, the human
attitude to follow a particular pattern of life, etc., an addition of 40% of the
established income of the deceased towards future prospects and where the
deceased was below 40 years an addition of 25% where the deceased was
between the age of 40 to 50 years would be reasonable.
11. We see no reason why the aforesaid principle may not be applied, which apply to
the salaried person and/or deceased self employed and/or a fixed salaried deceased, to
the deceased who was not serving and/or was not having any income at the time of
accident/death. In case of a deceased, who was not earning and/or not doing any job
and/or self employed at the time of accident/death, as observed herein above his
income is to be determined on the guesswork looking to the circumstances narrated
hereinabove. Once such an amount is arrived at he shall be entitled to the addition over
the future prospect/future rise in income. It cannot be disputed that the rise in cost of
living would also affect such a person. As observed by this Court in the case of Pranay
Sethi (Supra), the determination of income while computing compensation has to
include future prospects so that the method will come within the ambit and sweep of
just compensation as postulated Under Section 168 of the Motor Vehicles Act. In case of
a deceased who had held a permanent job with inbuilt grant of annual increment and/or

27-01-2022 (Page 5 of 7) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 in case of a deceased who was on a fixed salary and/or self employed would only get
the benefit of future prospects and the legal representatives of the deceased who was
not serving at the relevant time as he died at a young age and was studying, could not
be entitled to the benefit of the future prospects for the purpose of computation of
compensation would be inapposite. Because the price rise does affect them also and
there is always an incessant effort to enhance one's income for sustenance. It is not
expected that the deceased who was not serving at all, his income is likely to remain
static and his income would remain stagnant. As observed in Pranay Sethi (Supra) to
have the perception that he is likely to remain static and his income to remain stagnant
is contrary to the fundamental concept of human attitude which always intends to live
with dynamism and move and change with the time. Therefore we are of the opinion
that even in case of a deceased who was not serving at the time of death and had no
income at the time of death, their legal heirs shall also be entitled to future prospects
by adding future rise in income as held by this Court in the case of Pranay Sethi (supra)
i.e. addition of 40% of the income determined on guesswork considering the
educational qualification, family background etc., where the deceased was below the
age of 40 years.
12. In light of the above, in the present case, the claimants shall be entitled to future
economic loss at Rs. 14,000/- per month. The deceased at the time of accident was
aged between 21-22 years. Therefore, the multiplier has to be adopted/applied
considering the age of the deceased and not the age of the parents thus, multiplier 18
would apply. Therefore, the claimants shall be entitled to Rs. 15,12,000/- towards the
future economic loss. Claimants shall also be entitled to Rs. 15,000/- towards loss of
estate, Rs. 15,000/- towards funeral expenses and Rs. 40,000/- towards loss of love
and affection. Thus, the claimants shall be entitled in all a sum of Rs. 15,82,000/- with
interest thereon at the rate of 7% per annum from the date of claims petition till
realization.
1 3 . Now so far as the submission on behalf of the Union of India that as in the
execution proceedings the claimants accepted the amount due and payable under the
impugned judgment and order and accepted the same as full and final settlement,
thereafter the claimants ought not to have preferred appeal for enhancement of the
compensation is concerned, the aforesaid cannot be accepted. The claimants are entitled
to just compensation. Merely because in the execution proceedings they might have
accepted the amount as awarded by the High Court, may be as full and final settlement,
it shall not take away the right of the claimants to claim just compensation and shall not
preclude them from claiming the enhanced amount of compensation which they as such
are held to be entitled to. As such, the Motor Vehicles Act is a benevolent Act and as
observed hereinabove the claimants are entitled to just compensation. As such, the
Union of India ought not to have taken such a plea/defence.
14. In view of the above and for the reasons stated above, the present appeal succeeds
in part. Impugned judgment and order passed by the High Court is modified and it is
held that the claimants shall be entitled a total sum of Rs. 15,82,000/- with interest
thereon at the rate of 7% from the date of claims petition till the date of realization.
15. Now the Appellants to deposit the balance enhanced amount of compensation as
per the present judgment and order with the learned Tribunal within a period of six
weeks from today and also deposit the enhanced amount of compensation to be
invested by the learned Tribunal in the name of the parents in fixed deposit in any
Nationalized Bank for a period of 3 years however, the parents shall be entitled to the
periodical interest on the same.

27-01-2022 (Page 6 of 7) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 16. Present appeal is partly allowed to the aforesaid extent with token cost which is
quantified at Rs. 10,000/- to be paid to the original claimants also to be deposited in
the learned Tribunal within a period of six weeks from today and the same may be paid
to the original claimants.
© Manupatra Information Solutions Pvt. Ltd.

27-01-2022 (Page 7 of 7) www.manupatra.com Hon'ble Deputy Director, Gujarat State Judicial Acadamy
 License & Printed By : Mr.P.R.Trivedi | https://www.aironline.in | 29/01/2022
45

AIRONLINE 2021 SC 1222

Supreme Court Of India
HON'BLE JUDGE(S): M. R. SHAH, B. V. NAGARATHNA , JJ
BASANTI DEVI v. DIVISIONAL MANAGER, NEW INDIA ASSURANCE COMPANY LTD.

CIVIL APPEAL - 7435 of 2021, decided on 06/12/2021

Mot or Vehicles Act (59 of 1988) , S.168— Compensat ion - Deat h claim - Enhancement of -
Deceased 25 years of age at t ime of accident was a Bachelor of Engineering in Comput er
Technology - Considering t he pot ent ialit y t o earn His income right ly considered @ 20,000/-
p.m. - High Court commit t ed grave error in reducing compensat ion from Rs.30,54,000/- t o
Rs.15,82,000/- - Order of High Court quashed and set aside.
(Para 4)

Name of Advocat es

ORDER :-Leave granted.

1. We have heard Mr. Kaushik Laik, learned counsel appearing for the appellants and Mr. J.P.N. Shahi,
learned counsel appearing for the respondents.
2. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of
Jharkhand at Ranchi in Miscellaneous Appeal. No. 378 of 2018 and Miscellaneous Appeal No. 395 of 2018 by
which the High Court has allowed the Appeal preferred by the respondent-Insurance Company and has
dismissed the Appeal preferred by the original Claimants to enhance the amount of compensation, the
original Claimants have preferred the present Appeals.
3. The deceased, at the time of accident, was 25 years of age. The deceased was a Bachelor of
Engineering in Computer Technology. The Motor Accidents Claims Tribunal, Ranchi (hereinafter referred to
as the "Tribunal") assessed the income of the deceased for the purpose of awarding the future loss of
income @ 20,000/- per month and thereafter adding 40% towards future prospects and thereafter
deducted 50% towards his own personal expenditure as he was a bachelor, the Tribunal arrived at a total
figure of Rs.1,68,000/- p.a. for loss of dependency and thereafter applying the multiplier of 18 awarded
Rs.30,24,000/- towards future loss of income. The Tribunal also awarded other amounts under the
Conventional Heads. Thus, in all, the Tribunal awarded a total sum of Rs.30,54,000/-. However, as the
Claimants already received a sum of Rs.50,000/- as interim compensation under Section 140 of the Motor
Vehicles Act, the Tribunal deducted the same and awarded a total sum of Rs.30,04,000/- (Rs.30,54,000-
50,000) as compensation for the death of the deceased. In an appeal preferred by the Insurance Company,
the High Court has reduced the amount of compensation from Rs.30,54,000/- to Rs.15,82,000/-. The High
Court has also dismissed the appeal preferred by the Claimants which was filed to enhance the amount of
compensation.

4. Feeling aggrieved and dissatisfied with the impugned common judgment and order passed by the High
Court dismissing the appeal preferred by the original Claimants and partly allowing the appeal preferred by
the respondent-Insurance Company and reducing the amount of compensation from Rs. 30,54,000/- to Rs.
15,82,000/-, the original Claimants have preferred the present appeals.
5. Having heard the learned counsel appearing for the respective sides and considering the fact that the
deceased at the time of death/accident was aged 25 years of age and was a Bachelor of Engineering in
Computer Technology, we are of the opinion that the Tribunal rightly considered the income of the
deceased at the time of death at least @ 20,000/- p.m. The same was not required to be interfered with
by the High Court. The submission on behalf of the respondent - Insurance Company that as no
documentary evidence was produced and/or laid in support of the documentary evidence produced on

1 of 2 Copyright © 2022 All India Reporter Pvt. Ltd., All rights reserved.
License & Printed By : Mr.P.R.Trivedi | https://www.aironline.in | 29/01/2022

record that the deceased was earning Rs.20,000/- per month and therefore the Tribunal ought not to have
assessed the income of the deceased at Rs.20,000/- per month is concerned, assuming that there was no
supporting evidence laid, in that case also considering the potentiality to earn, as the deceased was a
Bachelor of Engineering in Computer Technology, his income can safely be assessed at-least at Rs.20,000/-
per month. As such we are in complete agreement with the view taken by the Tribunal. The High Court has
committed a grave error in reducing the compensation from Rs.30,54,000/- (Rs.30,04,000/-) to
Rs.15,82,000/-.
5. In view of the above and for the reasons stated above, the impugned judgment and order passed by the
High Court insofar as allowing the appeal preferred by the Insurance Company and reducing the amount of
compensation from Rs.30,54,000/- to Rs. 15,82,000/- is required to be quashed and set aside and is,
accordingly, quashed and set aside. The impugned judgment and order passed by the High Court dismissing
the appeal preferred by the original Claimants which was filed to enhance the amount of compensation was
rightly dismissed by the High Court. We concur with the same.
6. In view of the above and for the reasons stated above, the present appeal arising out of the impugned
judgment and order passed by the High Court partly allowing the appeal preferred by the respondent-
Insurance Company and reducing the amount of compensation from Rs. 30,54,000/- to Rs. 15,82,000/- is
hereby quashed and set aside and we restore the judgment and award passed by the Motor Accidents
Claims Tribunal, Ranchi awarding the compensation at Rs.30,54,000/-. The appeal preferred by the original
Claimants dismissing their appeal for enhancement is hereby dismissed.
The Appeals stand disposed of in the above terms.
Order Accordingly

2 of 2 Copyright © 2022 All India Reporter Pvt. Ltd., All rights reserved.
 46

2021 (0) AIJEL-SC 68101

SUPREME COURT OF INDIA

(ORISSA HIGH COURT)

Hon'ble Judges:S.Abdul Nazeer and Krishna Murari JJ.

Rasmita Biswal Versus Divisional Manager, National Insurance Company Ltd.

CIVIL APPEAL No. 7549 of 2021 ; *J.Date :- DECEMBER 08, 2021

MOTOR VEHICLES ACT, 1988 Section - 173

Cases Referred To :

1. National Insurance Company Limited V. Pranay Sethi And Others, 2017 16 SCC 680 :
2017 AIR SC 5157 : 2017 (13) Scale 12 : JT 2017 (10) 450 : 2017 (8) Supreme 107

Equivalent Citation(s):
JT 2021 (12) SC 147 : 2021 JX(SC) 879

JUDGMENT :-

S.ABDUL NAZEER, J.

1 Leave granted.

2 This appeal is directed against the judgment and order dated 07.03.2018 passed by the
High Court of Orissa at Cuttack in MACA No.965 of 2016 whereby the High Court has
reduced the compensation payable to the appellants/claimants from Rs.22,60,000/- to
Rs.17,00,000/-.

3 The rst appellant is the wife of one Manoj Kumar Biswal and the second and third
appellants are their minor sons. Manoj Kumar Biswal died in a motor vehicle accident which
occurred on 09.05.2013. The appellants led claim petition bearing MAC No.46/2013 before
the Additional District Judge-cum- Motor Accident Claims Tribunal, Talcher District (for short
'the Tribunal'), seeking compensation on account of the death of Manoj Kumar Biswal. The
rst respondent, owner of the offending truck, led his written statement denying any
negligence on the part of the driver of the offending truck. Respondent no.2 is the insurer
who also led the written statement opposing the claim petition.

4 The Tribunal, on appreciation of the materials on record, held that the cause for the
accident was the rash and negligent driving of the offending truck by its driver. The Tribunal
awarded a total compensation of Rs.12,90,064/- along with interest at the rate of 6% per
annum. The claimants as well as the
insurer challenged the award of the Tribunal before the
High Court vide MACA
Nos.1134 and 1169 of 2014. The High Court set aside the award and
remitted
the matter back to the Tribunal for fresh disposal. The Tribunal once again
considered the matter and awarded a total compensation of Rs.22,60,000/-. The
insurer
challenged the award of the Tribunal before the High Court by filing an
appeal bearing MACA
No.965 of 2016. In that appeal, the High Court has
modified the award of the Tribunal and
awarded compensation of
Rs.17,00,000/- with interest at the rate of 7.5% per year from the
date of claim
petition till the date of realization.

5 Learned counsel for the appellant would contend that the High Court was not justified in
reducing the compensation without assigning any reason. It is
contended that the appellant
was earning Rs.15,000/- and was aged about 28
years at the time of his death. The Courts
below have taken his age as 33 years
and has applied multiplier '16' instead of '15'. It is
further argued that the
deceased had a permanent job. The Courts below have not awarded
any
compensation towards loss of future prospects. Even the compensation
awarded under
the conventional heads is not in accordance with the judgment of
this Court in National
Insurance Company Limited v. Pranay Sethi and
Others, (2017) 16 SCC 680.

6 On the other hand, learned advocate appearing for the respondent-insurer has supported
the judgment of the High Court.

7 We have carefully considered the submissions made at the Bar and

perused the materials
placed on record.

8 The finding of the Tribunal and that of the High Court with regard to the cause of the
accident and the liability of the insurer to pay compensation is not disputed. Therefore, the
only question for consideration is whether
compensation awarded by the High Court is
adequate.

9 The deceased was working as supervisor under one Kusha Samal (PW-3),
proprietor of
M/s. Divine Construction. Exhibit P-8 is certificate issued by PW-
3 shows that the deceased
was a supervisor in the organisation and his salary
was Rs.15,000/- per month. In his
evidence, PW-3 has also stated that the
deceased was paid salary of Rs.15,000/- per month.
The first appellant-wife of
the deceased was examined as PW-1. She has stated that the
income of the
deceased at the time of his death was Rs.15,000/- per month. Taking into
account the evidence on record, the Tribunal has assessed his income at
Rs.15,000/-. We do
not find any error with the assessment of the salary as such
by the Tribunal.

10 Though the appellants claim that the deceased was aged 28 years at the of his death, no
documents have been produced in support of the said contention.
On the contrary, PAN card
(Exhibit-7) of the deceased shows that he was aged
33 years at the time of his death. Even
the post-mortem report of the deceased
suggests the same. Therefore, the Tribunal held
that the deceased was aged 33
years and multiplier '16' was applied. After deducting � of
the income towards
the personal expenses of the deceased, the Tribunal awarded a total
compensation of Rs.21,60,000/- towards loss of dependency and a sum of
Rs.1,00,000/-
under other conventional heads. Thus, a total sum of
Rs.22,60,000/- was awarded by the
Tribunal.

11 However, the High Court, without assigning any reason whatsoever, has modified the
award of the Tribunal and has awarded a compensation of
Rs.17,00,000/- by holding as
under:
 "Considering the submissions made and keeping in view the
quantum of compensation
amount awarded and the basis on
which the same has been arrived at, I feel, the
interest of justice
would be best served, if the awarded compensation amount of
Rs.22,60,000/- is modified and reduced to Rs.17,00,000/-
(Rupees Seventeen Lakhs)
only, which is payable to the
claimants along with the awarded interest. The impugned
award is modified to the said extent."

12 Section 173 of the Motor Vehicles Act, 1988 provides for filing of an appeal against the
award passed by the Claims Tribunal. It is settled law that an
appeal is continuation of the
proceedings of the original Court/Tribunal. An
appeal is a valuable right of the appellant and
at the stage of an appeal, all
questions of fact and law decided by the Tribunal are open for
the
reconsideration. Therefore, the appellate court is required to address all the
questions
before it and decide the case by giving reasons.

13 We have already held that the monthly income of the deceased, as

assessed by the
Tribunal at the rate of Rs.15,000/- per month, is just and proper.
It is also established that
the deceased was 33 years at the time of his death.
Therefore, application of multiplier of
'16' by the Tribunal is also proper. The
annual salary of the deceased comes to Rs.1,80,000/-
which has to be multiplied
by '16' which becomes Rs.28,80,000/-.

14 In Pranay Sethi 1, the Constitution Bench of this Court has held that in case the deceased
was self-employed or on a fixed salary, an addition of 40% of
the established income should
be awarded where the deceased was below the
age of 40 years:

"In case the deceased was self-employed or on a fixed

salary, an addition of 40% of the
established income
should be the warrant where the deceased was below the
age of
40 years. An addition of 25% where the deceased
was between the age of 40 to 50
years and 10% where
the deceased was between the age of 50 to 60 years
should be
regarded as the necessary method of
computation. The established income means the
income
minus the tax component."

15 40% of the income of the deceased, therefore, has to be added towards loss of future
prospects which comes to Rs.11,52,000/-. Thus, the total income
of the deceased is
Rs.40,32,000/-. One-fourth of the income i.e. 10,08,000/- has
to be deducted towards the
personal expenses of the deceased, as he has left
behind three dependants. Therefore, the
total amount payable to the claimants
towards loss of dependency comes to Rs.30,24,000/-.

16 In Pranay Sethi 1, this Court has awarded a total sum of Rs.70,000/- under conventional
heads, namely, loss of estate, loss of consortium and funeral expenses. The said Judgment
of the Constitution Bench was pronounced in the
year 2017. Therefore, the claimants are
entitled to 10% enhancement.
Rs.16,500/- is awarded towards loss of estate and
conventional expenses and
Rs.44,000/- is awarded towards spousal consortium. Thus, the
total
compensation payable to the claimants is as under:

(1) Towards loss of dependency Rs.30,24,000/-

(2) Towards loss of estate Rs.16,500/-

(3) Funeral expenses Rs.16,500/-

(4) Spousal consortium Rs.44,000/-

TOTAL Rs.31,01,000/-
17 As noticed above, the High Court has already awarded a sum of
Rs.17,00,000/-. Thus, the
balance sum payable to the appellants is
Rs.14,01,000/-. The second respondent-Insurer is
directed to deposit a sum of
Rs.14,01,000/- before the Tribunal along with interest at the rate
of 7.5% per
annum from the date of claim petition till the date of realization, within eight
weeks from today. On such deposit being made, the same shall be disbursed to
the
claimants/appellants in the same proportion as directed by the Tribunal in
Award dated
27.02.2016.

18 The appeal is accordingly disposed of. There shall be no order as to costs.

19 Before parting with the judgment, we may notice that a large number of claim petitions,
under the provisions of the Motor Vehicles Act, 1988 are being
filed before the various
Claims Tribunals established thereunder throughout the
country. Against the awards of the
Tribunals, appeals are filed under Section
173 of the Motor Vehicles Act, 1988 before the
relevant High Court, either by
the claimants or by the insurers and owners of the offending
vehicles. Large
number of such appeals are pending before the various High Courts. Having
regard to the above, we are of the view that in order to curtail the pendency
before the High
Courts and for speedy disposal of the appeals concerning
payment of compensation to the
victims of road accident, it would be just and
proper to consider constituting 'Motor Vehicle
Appellate Tribunals' by
amending Section 173 of the Motor Vehicles Act so that the appeals
challenging
the award of a Tribunal could be filed before the Appellate Tribunal so
constituted.

20 The various Benches of such an Appellate Tribunal could consist of two Senior District
Judges. To ensure access to justice and to avoid pendency, it is
also proper to consider
setting up Benches of the Appellate Tribunal in various
regional cities, in addition to the
capital city of each State as may be indicated
by the relevant High Court. For this purpose,
appropriate rules governing the
procedure of the Appellate Tribunal may also be framed. No
further appeal
against the order of the Appellate Tribunal need be provided. If any of the
party
is aggrieved by the order of the Appellate Tribunal, he can always invoke the
writ
jurisdiction of the concerned High Court for appropriate reliefs.
Department of Justice,
Ministry of Law and Justice, is requested to examine this
matter.

21 The Registry is directed to send a copy of this Judgement to the Secretary, Department of
Justice, Ministry of Law and Justice, forthwith.
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022 47

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

R/SPECIAL CIVIL APPLICATION NO. 4800 of 2021

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE J.B.PARDIWALA

and
HONOURABLE MS. JUSTICE NISHA M. THAKORE

==========================================================

1 Whether Reporters of Local Papers may be allowed to YES

see the judgment ?

2 To be referred to the Reporter or not ? YES

3 Whether their Lordships wish to see the fair copy of NO

the judgment ?

4 Whether this case involves a substantial question of NO

law as to the interpretation of the Constitution of India
or any order made thereunder ?

==========================================================
THE ORIENTAL INSURANCE CO. LTD.
Versus
CHIEF COMMISSIONER OF INCOME TAX (TDS)
==========================================================
Appearance:
MR RATHIN P RAVAL(5013) for the Petitioner(s) No. 1
M R BHATT & CO.(5953) for the Respondent(s) No. 1
==========================================================

CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA

and
HONOURABLE MS. JUSTICE NISHA M. THAKORE

Date : 05/04/2022

ORAL JUDGMENT

(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)

1 By this writ application under Article 226 of the Constitution of

Page 1 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

India, the writ applicant – an Insurance Company has prayed for the
following reliefs:

“(A) Your Lordships be pleased to admit and allow this petition.

(B) Your Lordships be pleased to issue an appropriate

writ/direction/order to quash and set aside the order at ANNEXURE A
issued by the respondent and thereby allow waiver of interest charged
u/s 201(1A) of the Income Tax Act, 1961.

(C) Your Lordships be pleased to as an ad-interim ex-parte relief to stay

the impugned order at Annexure A.

(D) Your Lordships may be pleased to quash and set aside any penalty /
interest that may be levied by the Income Tax Department pursuant to
the Annexure A order.

(E) Your Lordships may be pleased to lay down a fixed procedure to

deal with the TDS issue in the MACP cases across the state.

(F) Your Lordships be pleased to pass such other and further orders
may be deemed just and proper looking to the facts and circumstances
of the case and in the interest of the justice.”

2 The facts giving rise to this writ application may be summarized as

under:

3 The writ applicant before us is an Insurance Company. One Motor

Accident Claim Petition bearing No.518 of 1999 came to be filed in the
City Civil Court at Ahmedabad. The said claim petition came to be

Page 2 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

allowed by the MACT (Aux.) Judge, City Civil Court, Ahmedabad, vide
judgement and award dated 18th January 2017.

4 The operative part of the order passed by the Tribunal in the

above referred MACP reads thus:

“(a) The petitioners in MACP No. 518/1999 do recover Rs. 16.28,008/-

(Rs. Sixteen lacs twenty-eight thousand eight only) from the opponent
1, 2 and 3 jointly and/or severally, together with running interest at the
rate of 8% p.a from the date of petition till realization of the amount
along with proportionate costs of the petition.

(b) The opponents are directed to follow the ratio laid down in the
judgment of Hansgauri P. Ladhani V Oriental Ins. Co. Ltd, reported in
2007-GLH-2-291 as far as TDS is concerned".

5 Thus, the Insurance Company was directed to deposit the amount

as awarded with interest and so far as the TDS was concerned, the
Insurance Company was directed to follow the decision of this High
Court rendered in the case of Hansaguri Prafulchandra Ladhani and
others vs. The Oriental Insurance Company Ltd rendered in 2007 ACJ
1897.

6 The writ applicant herein in due compliance of the judgement and

award passed by the Tribunal, deposited the entire amount along with
the TDS. The TDS to the tune of Rs.2,21,516/- was deposited through a
cheque on 26th May 2017.

7 The deposit of the TDS referred to above was in accordance with

the judgement of this High Court in the case of Hansaguri (supra).

Page 3 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

8 It appears that thereafter, the original claimants preferred a

Miscellaneous Application No.298 of 2017 before the Motor Accident
Claim Tribunal, City Civil Court at Ahmedabad with a prayer to release
the amount of Rs.2,21,516/- deducted towards the TDS as referred to
above.

9 The Miscellaneous Application came to be partly allowed by the

Tribunal vide order dated 4th August 2018, which reads thus:

“ORDER BELOW EXHIBIT – 1

1. The present application has been given by the applicants to release

the amount of Rs.2,21,516/- deducted towards TDS which has been
deposited in the Tribunal vide 'C' No.521, on 26.05.2017.

2. Against the afore stated application, Advocate for the Insurance Co.
has made an endorsement stating that he has no objection for
withdrawal as no appeal or review has been filed by the Insurance Co.

3. Considering the papers on record, it transpires that the Tribunal has

passed an order in MACP No.518/1999 on 18.01.2017, allowing the
said petition and award of Rs.16,28,008/- was passed. The Insurance
Co. has deposited the awarded amount with the Interest and had
deducted the amount of Rs.2,21,516/- being the amount of TDS out of
the interest amount. As regards the aforestated amount of TDS is
concerned, no dispute has been raised by the applicant and they have
also admitted that the amount deducted towards TDS is proper.

4. As far as the aforestated amount is concerned, the said amount is

deposited as Tax in the income-tax department but the Insurance Co.

Page 4 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

said amount has deposited the in the court. So, the said amount is
required to be sent back to the insurance Co. for depositing the same
with the Income Tax department and in my view it cannot be given to
the applicants. So, considering the peculiar facts and circumstance on
hand, this application is required to be partly allowed and in the
interest of justice I pass the following order.

ORDER

The present application is hereby partly allowed.

The Registry is hereby directed to send back the amount of Rs.

2,21,516/- deposited vide 'C' No.521, dated 18.05.2017, to the Oriental
Insurance Co. Ltd. with a direction that the Insurance Co. shall deposit
the said amount with the Income Tax department and then after would
produce the necessary document regarding the same to this Court and
supply the same to the applicants.

The Insurance Co. Is further directed to follow the procedure

regarding depositing the amount of TDS with the Income Tax
department and issue the necessary certificate along with the relevant
papers of depositing the amount to the applicants and the copy be send
to this Court.

Date : 04/08/2018.
sd/-
(Pratik J. Tamakuwala)
MACT (Aux.) Judge,
City Civil Court, Ahmedabad
UNIQUE ID CODE NO.GJ00581”

10 Thus, in view of the aforesaid order passed by the Tribunal, the

writ applicant deposited the TDS amount with the Income Tax
Department on 26th March 2019 and also filed correction statement for
26Q for the Q-1 of F. Y. 2017-18, which resulted in the demand of

Page 5 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

interest of Rs.69,741/- under Section 201(1A) of the Income Tax Act,

1961.

11 It appears that the directions issued by the Tribunal as above were

challenged by the writ applicant herein by filing the Special Civil
Application No.10060 of 2019 on 10th June 2019.

12 The Insurer filed an application dated 19 th June 2019 with the

Income Tax Department requesting waiver of the additional late
payment interest of Rs.69741/- against processing of the latest
correction statement for the F. Y. 2017-18.

13 The writ applicant herein also preferred an application to implead

the Income Tax Department in the Special Civil Application No.10060 of
2019.

14 A learned Single Judge of this Court, vide order dated 30 th August

2019, directed that no coercive steps shall be taken against the
Insurance Company till the issue of TDS was not set at rest.

15 It appears that although this Court had passed an interim order in

the Special Civil Application No.10060 of 2019 as above, yet the Income
Tax Department proceeded to pass an order dated 22 nd January 2021,
whereby the department rejected the application filed by the Insurer
seeking waiver of interest for the late deposit of the TDS amount.

16 In such circumstances referred to above, the writ applicant –

Insurance Company has come up with the present writ application.

Page 6 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

 SUBMISSIONS ON BEHALF OF THE WRIT APPLICANT –

INSURANCE COMPANY:

17 Mr. Rathin Raval, the learned counsel appearing for the Insurance
Company submitted that this litigation raised many issues of public
importance. He pointed out that the practice of deducting tax at source
(TDS) on interest under Section 194A of the Income Tax Act is on the
basis of the ratio of the decision of this High Court in the case of
Hansaguri (supra). According to Mr. Raval, Hansaguri (supra) is based
on the decision of the Supreme Court rendered in the case of Rama Bai
vs. CIT (1990) 181 ITR 400 (SC), wherein the Supreme Court held that
the interest as awarded by the Tribunal shall first spread over the
relevant F. Y. covering the period for which the interest is granted. It is
only if the interest for any particular financial year exceeds Rs.50,000/-,
the amount would be liable to be deducted at source and shall have to
be deposited with the MACT.

18 Mr. Raval submitted that the Finance Act, 2015 has inserted new
Section 194A(3) (ixa) with effect from 1st June 2015. The effect of the
amendment is as under:

“(1) No liability for TDS shall be attracted in respect of any income

credited by way of interest on the compensation amount awarded by
the MACT.

(2) Such liability for deduction of tax in respect of interest on

compensation will be attracted, only at the time of actual payment and
only if the amount of such payment or aggregate amounts of such
payments during a financial year exceeds Rs. 50,000/-.”

19 Mr. Raval pointed out that in view of the aforesaid amendment to

Page 7 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

Section 194A, the TDS would have to be deducted out of the actual
payment of interest on compensation. The rate would be 10% if the
claimants had produced the PAN Card before the payment and 20% if
the PAN Card had not been produced. Mr. Raval would submit that in
spite of the aforesaid amendment, the Insurance Companies are being
compelled to deposit the amount with the Tribunal itself. The Tribunal
would thereafter decide accordingly.

20 In such circumstances referred to above, Mr. Raval prays that this

Court may clarify the issue by explaining the correct position of law as
regards the liability of the Insurance Company to deduct the TDS and
deposit the same with the Tribunal; or with the Income Tax Department.

 SUBMISSIONS ON BEHALF OF THE REVENUE:

21 Per contra, Mr. M. R. Bhatt, the learned Senior Counsel appearing

for the Revenue submitted that the writ applicant – Insurance Company
was not justified in depositing the TDS with the City Civil Court instead
of the Income Tax Department. Mr. Bhatt would submit that there is no
ambiguity or confusion as regards the question as to where the TDS is
required to be deposited. According to Mr. Bhatt, the provisions of
Sections 194A(3)(ix)(ixa), 145(b), 145B, 56(1)(viii), 201(1), 201(1A)
and 200 resply of the Income Tax Act make the legal position
abundantly clear.

22 Mr. Bhatt would submit that the Insurance Company is liable to

deduct the TDS on the interest paid by it in accordance with the
provisions of Section 194A(3)(ix) and (ixa) of the Act and if the assessee
is of the view that tax has been deducted in excess, then he can always
claim refund of the same from the Income Tax Department.

Page 8 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

23 Mr. Bhatt has also filed a note explaining the position of Section
194A post amendment. Mr. Bhatt has also discussed few judgements on
the issue in question including Hansaguri (supra). The same reads thus:

“As per Section 194A of Income Tax Act, 1961, when any person not
being an individual or HUF who becomes responsible for paying to a
resident any income by way of interest other than income by way of
interest on securities. shall at time of credit of such income to the
account of the payee or at the time of payment thereof in cash or by
issue of a cheque or draft or by any other mode, whichever is earlier,
deduct income tax thereon at the rates in force. Sub-section (3)
excludes the application of sub-section (1) sub-clause (ix) thereof and
provides that the provisions of sub-section (1) shall not apply to such
income credited or paid by way of interest on the compensation
awarded by the Motor Accident Claims Tribunal, where amount of such
income or, as case may be, aggregate of the amounts of such income
paid during financial year does not exceed Rs.50,000/. Thus, for
exemption from provisions of Sub-section (1) of Section 194A, such
income paid by way of interest on compensation amount awarded by
Tribunal will not be liable for tax if aggregate amount of such interest
income paid during financial year does not exceed Rs.50,000/- .

 Relevant provisions are reproduced for ready reference:

194A. Interest other than "Interest on securities".

(1) Any person, not being an individual or a Hindu undivided family,

who is responsible for paying to a resident any income by way of
interest other than income by way of interest on securities, shall, at the
time of credit of such income to the account of the payee or at the time
of payment thereof in cash or by issue of a cheque or draft or by any
other mode, whichever is earlier. deduct income-tax thereon at the
rates in force:

Provided that an individual or a Hindu undivided family, whose total

sales, gross receipts or turnover from the business or profession carried
on by him exceed [one crore rupees in case of business or fifty lakh
rupees in case of profession] during the financial year immediately
preceding the financial year in which such interest is credited or paid,
shall be liable to deduct income-tax under this section.]

Explanation - For the purposes of this section, where any income by

way of interest as aforesaid is credited to any account, whether called
"Interest payable account" or "Suspense account" or by any other name,

Page 9 of 51
C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

in the books of account of the person liable to pay such income, such
crediting shall be deemed to be credit of such income to the account of
the payee and the provisions of this section shall apply accordingly.

(3) The provisions of sub-section (1) shall not apply

(ix) to such income credited by way of interest on the

compensation amount awarded by the Motor Accidents Claims
Tribunal:

(ixa) to such income paid by way of interest on the

compensation amount awarded by the Motor Accidents Claims
Tribunal where the amount of such income or, as the case may
be, the aggregate of the amounts of such income paid during the
financial year does not exceed fifty thousand rupees;

145B. Taxability of certain income.

(1) Notwithstanding anything to the contrary contained in section 145,

the interest received by an assessee on any compensation or on
enhanced compensation, as the case may be, shall be deemed to be the
income of the previous year in which it is received.

(2) Any claim for escalation of price in a contract or export incentives

shall be deemed to be the income of the previous year in which
reasonable certainty of its realisation is achieved.

(3) The income referred to in sub-clause (xviii) of clause (24) of section

2 shall be deemed to be the income of the previous year in which it is
received, if not charged to income-tax in any earlier previous year.

56. Income from other sources.

(1) Income of every kind which is not to be excluded from the total
income under this Act shall be chargeable to income-tax under the head
"Income

from other sources", if it is not chargeable to income-tax under any of

the heads specified in section 14, items A to E.

(2) In particular, and without prejudice to the generality of the

provisions of sub-section (1), the following incomes, shall be chargeable
to income-tax under the head "Income from other sources", namely :

(viii) income by way of interest received on compensation or on

enhanced compensation referred to in [sub-section (1) of section
145B]:

Page 10 of 51
C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

Sr. Judgment Particulars

No.
1 Hansaguri Hon’ble Gujarat High Court gave
Prafulchandra Ladhani detailed guidelines for the cases arising
and Ors. vs. The out of motor vehicle accident claims (at
Oriental Insurance para 14 of the judgment) held that in
Company Ltd. (Gujarat order to attract provisions of TDS on
High Court (decision interest component on compensation
rendered on awarded in motor vehicle accident
04.10.2006) claims;

(a) first spread the interest amount over

to the relevant financial years for the
period from the date of filing the claim
petition till the date of deposit.

(b) thereafter, if the interest for any

particular financial year exceeds
Rs.50,000/- separately deposit before
the Tribunal the amount liable to be
deducted at source under the provisions
of Section 194A(3) (ix) of the Income
Tax Act, 1961. Such amount shall not,
however, straightway, be paid over to
the Income Tax Department.

(c) produce before the Tribunal a

statement of computation of interest by
spreading the amount over the relevant
years from the date of claim petition till
the date of deposit if the interest for any
particular financial year exceeds
Rs.50,000/- and also request the
Tribunal to treat the amount as a
separate deposit.
2 Commissioner of Does interest on delayed payment of
Income-tax vs. Oriental compensation from motor vehicle claims
Insurance Co. Ltd exigible to TDS?
[2012] 27
taxmann.com 28 Necessary ingredients of interest to be
(Allahabad) (decision under the ambit of section 2(28A) of
rendered on Income Tax Act are that it should be in
13.09.2012) respect of any money borrowed or debt
incurred. The award under the Motor
Vehicle Act is neither the money
borrowed by the insurance company nor
the debt incurred upon the insurance

Page 11 of 51
C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

company. (para 37)

The award including interest under

motor vehicle claims cannot be
considered as “income” as it is awarded
to the legal heirs of the deceased for the
loss of their bread earner. (para 4)
3 Court on its own Whether TDS can be deducted on the
motion [2014] 52 interest accrued on fixed term deposit of
taxmann.com 151 the compensation awarded under motor
[Himachal Pradesh] vehicle claims?
(decision rendered on
15.10.2014) Hon’ble High Court held that
compensation awarded under Motor
Vehicles Act is in lieu of death of a
person or bodily injury suffered in a
vehicular accident and it could not be
taxed as income.

An SLP is preferred against the

judgment and is pending before Hon’ble
Supreme Court.
4 Oriental Insurance Co. In this case, interest component on the
vs. Chennabasavaiah compensation was 1,42,802/-. TDS on
and Ors (decision the interest component in a sum of
rendered on Rs.28,560 was deducted. The Claimants
18.02.2015) claimed that exemption from payment of
tax is available on interest component
upto a sum of Rs.50,000/- and
therefore, petitioner – insurance
company should not have deducted TDS
on the entire interest amount. MACT
accordingly, directed the petitioner –
insurance company to deposit an
amount of Rs.10,000/- which was
deducted towards TDS on Rs.50,000/-

Karnataka High Court held that “having

heard the learned Counsel for the
petitioner- Insurance Company, I am of
the view that the court below was not
justified in directing the petitioner-
Insurance Company to deposit a sum of
Rs.10,000/- deducted by it towards TDS.
Section 194-A(3)(ix) of the Income Tax
Act, 1961 grants exemption from
payment of tax on the interest

Page 12 of 51
C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

component up-to a sum of Rs.50,000/-.

This exemption has to be claimed by the
respondent/claimants by filing necessary
returns before the assessing authority. It
is the statutory obligation of the
petitioner-Insurance Company to deduct
the TDS from the entire interest
component and deposit the same before
the competent authority, which has been
done in this case. A certificate to that
effect has been issued to the
respondent/claimants. The
respondent/claimants have to make a
claim for refund of the aforesaid amount
before the competent authority. With
these observations, writ petition is
allowed. The order dated 15.9.2012 in
Ex.Case No.80/2008 passed by the court
below is hereby quashed.
5 New India Assurance Whether Insurance Company can be
Co. Ltd [2017] 80 called upon to pay the TDS /deduct TDS
taxmann.com 331 on the interest part upon the
(Punjab and Haryana) compensation awarded in motor vehicle
(decision rendered on accident claims?
30.11.2015)
Relying on the above decision rendered
in [2014] 52 taxmann.com 151 by
Himachal Pradesh High Court, orders
calling upon the Insurance Company to
pay the TDS / deduct TDS on the
interest component, were set aside.
(para 9)

An SLP is preferred against the

judgment and is pending before Hon’ble
Supreme Court.
6 New India Assurance In this case, Insurance Company
Co. Limited vs. deducted Rs.45,190 as TDS and
Bhoyabhai Haribhai deposited the same with Dept. MACT
Bharvad and Ors. directed the Insurance Company to pay
(Gujarat High Court): the TDS to the victim-claimants owing to
(decision rendered on the amended provision of Section 194A
08.08.2016) of the Income Tax Act.

High Court upheld MACT order and

reiterated provisions of Section 194A
holding that TDS was not to be deducted

Page 13 of 51
C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

given the new law and held that “the

insurance company should have
properly adviced itself before effecting
tax at source on the ground that the
judgement of this Court in case of Smt.
Hansagauri Prafulchandra Ladhani and
ors vs. The Oriental Insurance Company
Ltd (supra) was no longer good law in
view of the statutory amendments. Not
having done that the only course left
open to the insurance company would
be to approach the Income Tax
department for refund, as may be
adviced. “(para 13)
Imp paras 11 and 12
7 Sr. Divisional Manager, Rajasthan High Court followed decision
National Insurance Co. rendered in DB Income Tax Appeal
vs. The Commissioner NO.517/2009 in which the decision of
of Income Tax, Alwar Hansagauri was followed.
(decision was rendered
on 21.04.2017)
(Rajasthan HC)
8 Sharda Pareek vs. ACIT Rajasthan High Court held that interest
[2019] 104 on compensation awarded by Motor
taxmann.com 76 (Raj) Accident Claims Tribunal is taxable on
decision rendered on year wise accrual basis, in following
26.04.2017) words:

“On plain reading of Section 2(28A), it

is very clear that originally
compensation was received by the
claimant was not income but once
amount received, it has become capital
and interest on capital is liable to be
taxable. In that view of the matter, the
issue is required to be answered in
favour of the department and against
the assessee.” (para 9)

Other imp para 11

An SLP is preferred against the

judgment and is pending before Hon’ble
Supreme Court.

Page 14 of 51
C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

9 Union of India vs. Hari Hon’ble Supreme Court held that

Singh (Civil Appeal deduction of tax is not permissible on
No.15041/2017 order the compensation / enhanced
dated 15th September compensation received by the assessee
2017) on compulsory acquisition of their
agricultural land.

In this case, Collector had deducted TDS

on the compensation received for
agricultural land as well.

With regard to demand of assessee for

refund of tax, Supreme Court held that
assessees must necessary returns before
Assessing Officer and it would be for the
Assessing Officer to determine whether
the land in question was agricultural
land in question was agricultural land or
not. Accordingly, it was made incumbent
on Assessing Officer to ascertain
whether refund of TDS can be made or
not.
10 Iffco Tokio General In this case, the petitioner – Insurance
Insurance Company Ltd Company deducted TDS amount from
vs. Krishnakumar the interest accrued on awarded amount
Munshiram Agrawal and deposited the TDS amount with
and others (Gujarat Income Tax Department as per amended
High Court) (decision section 194A deducted 20% TDS as the
rendered on interest exceeded 50,000.
10.11.2017)
The claimant – respondent No.1 filed
Execution Application before the
Tribunal wherein the learned Tribunal
issued attachment warrant against the
Insurance Company.

Gujarat High Court held that the

petitioner – Insurance Company was not
justified in deducting at source in view
of the guideline issued in Hansaguri’s
case. Therefore, it instructed Insurance
Company to approach the Income Tax
Dept for refund.
11 Oriental Insurance Co. In this case, the interest component of
Ltd. vs. Swaroopi Bai the compensation exceeded Rs.50,000,
(MP HC) (decision however MACT ruled that the interest
rendered on amount if spread over to the number of

Page 15 of 51
C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

24.06.2019) years from the date of filing of the claim,

then in none of the financial years, the
interest would be more than Rs.50,000.
Hence, it directed Insurance company to
pay over the deducted TDS to the
claimants. Hon’ble MP High Court
resorting to section 194-A(3)(ix) and
(ix-a), held that MACT committed
material illegality by holding that the
insurance company is not liable to
deduct TDS.
12 Rupesh Rashmikant Q. Whether interest awarded on
Shah vs. Union of India compensation from motor vehicle
[2019] 108 accidents is an income?
taxman..com 181
(Bombay High Court) Does section 194A make the interest
(decision rendered on income chargeable to tax if it otherwise
08.08.2019) is not. The answer has to be in the
negative. The provision for deduction of
tax at source is not a charging provision.
It only makes deduction of tax at source
on payment of same, which, in the
hands of payee, is income. If the payee
has no liability to pay such income, the
liability to deduct tax at source in the
hands of payer cannot be fastened. In
other words, the provision of deducting
tax at source cannot govern the
taxability of the amount which is being
paid. (para 59)

“We may clarify that these observations

and conclusions would apply to interest
on compensation or enhanced
compensation awarded by the Motor
Accident Claims Tribunal or High Court
from the date of the Claim Petition till
passing of the award or the judgment.
Further interest which may be paid for
delay in depositing the awarded
amount, would not form part of the
compensation and, therefore, would fall
in the bracket of interest income and
would be exigible to tax under the
normal provisions.” (para 61)

(other important paras 48 to 58)

Page 16 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

An SLP is preferred against the

judgment and is pending before Hon’ble
Supreme Court.

13 The New India Referring to guidelines emanating from

Assurance Company the decision of Hansagauri, any TDS
Limited vs. Govindlal deducted in excess, assessee will have to
Hiralal Mandora approach Income Tax Dept.
(Gujarat High Court –
decision rendered on
03.10.2019)
14 Satya Narayan – D. B. Question whether an insurance company
Civil Writ Petition can deduct tax at source on the interest
No.22025/2018 component of the compensation
(Rajasthan HC) awarded in a motor vehicle accident
(18/02/2022) claim was raised before Hon’ble
Rajasthan High Court.

Taking cognizance of the decision

rendered in 262 Taxman 253, Rajasthan
High Court referred the present case to a
large bench and is pending.

 PRIMARY ANALYSIS:
24 Having regard to the important issues we are called upon to
decide, we also took the assistance of the learned Senior Counsel Mr.
Tushar Hemani and also the learned counsel Mr. Bandish Soparkar.

25 While the writ applicant – Insurance Company seeks a declaration

from this Court with regard to the non-applicability of the decision of
Hansaguri (supra); the issue is inherently linked with the question
whether the interest awarded by the MACT is chargeable to the income
tax in the first place. Only if it is found chargeable, then the question
would arise as to in what manner should the writ applicant – Insurance
Company deduct the tax and deposit with the Tribunal or the Income
Tax Department. If the interest awarded by the MACT is not chargeable

Page 17 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

to income tax, then there would be no occasion for the Insurance

Company to deduct the tax.

26 In view of the aforesaid, the following questions fall for our

consideration:

(i) Whether interest allowed by the MACT in the accident case on

the amount of award can be termed as the 'Income from interest'
or the same is a part of compensation for the delay caused in the
legal proceedings?

(ii) Whether interest allowed on the compensation amount can be

equated with interest earned on the principal amount?

(iii) Whether the interest awarded by the MACT is not a part of

compensation?

27 Before we proceed to answer the aforesaid question, we must look

into few provisions of law.

28 Section 2(28A) of the Income Tax Act defines the term “interest”.
The same reads thus:

“(28A) “interest” means interest payable in any manner in respect of

any moneys borrowed or debt incurred (including a deposit, claim or
other similar right or obligation) and includes any service fee or other
charge in respect of the moneys borrowed or debt incurred or in respect
of any credit facility which has not been utilised;”

29 Section 56(2)(viii) of the Income Tax Act is with regard to

Page 18 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

“income from other sources”. The same reads thus:

“Income from other sources.

Section 56 -

(2) In particular, and without prejudice to the generality of the

provisions of sub-section (1), the following incomes, shall be chargeable
to income-tax under the head “Income from other sources”, namely-

….
….

(viii) income by way of interest received on compensation or on

enhanced compensation referred to in [sub-section (1) of section
145(B)”

30 Section 194A(3)(ix) and (ixa) of the Income Tax Act is with

regard to “interest other than interest on securities”. The same reads
thus:

“Interest other than “Interest on securities.

Section 194A.
….
(3) The provisions of sub-section (1) shall not apply -
…
…

(ix) to such income credited by way of interest on the compensation

amount awarded by the Motor Accidents Claims Tribunal.

(ixa) To such income paid by way of interest on the compensation

amount awarded by the Motor Accidents Claims Tribunal where the
amount of such income or, as the case may be, the aggregate of the

Page 19 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

amounts of such income paid during the financial year does not exceed
fifty thousand rupees;”

31 Section 145B(1) of the Income Tax Act is with regard to

“taxability of certain income”. The same reads thus:

“Taxability of certain income.

145B. (1) Notwithstanding anything to the contrary contained in

section-145, the interest received by an assessee on any compensation
or on enhanced compensation, as the case may be, shall be deemed to
be the income of the previous year in which it is received.

(2) Any claim for escalation of price in a contract or export incentives

shall be deemed to be the income of the previous year in which
reasonable certainty of its realisation is achieved.

(3) The income referred to in sub-clause (xviii) of clause (24) of

section-2 shall be deemed to be the income of the previous year in
which it is received, if not charged to income-tax in any earlier previous
year.”

32 Section 171 of the Motor Vehicles Act, 1988 reads thus:

“171. Award of interest where any claim is allowed.— Where any

Claims Tribunal allows a claim for compensation made under this Act,
such Tribunal may direct that in addition to the amount of
compensation simple interest shall also be paid at such rate and from
such date not earlier than the date of making the claim as it may specify
in this behalf.

33 Section 28 and Section 34 resply of the Land Acquisition Act, 1894

Page 20 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

read thus:

“Section 28. Collector may be directed to pay interest on excess

compensation. —If the sum which, in the opinion of the Court, the
Collector ought to have awarded as compensation is in excess of the
sum which the Collector did award as compensation, the award of the
Court may direct that the Collector shall pay interest on such excess at
the rate of [nine per centum] per annum from the date on which he
took possession of the land to the date of payment of such excess into
Court:

Provided that the award of the Court may also direct that where
such excess or any part thereof is paid into Court after the date of
expiry of a period of one year from the date on which possession is
taken, interest at the rate of fifteen per centum per annum shall be
payable from the date of expiry of the said period of one year on the
amount of such excess or part thereof which has not been paid into
Court before the date of such expiry.”

“Section 34. Payment of interest. —When the amount of such

compensation is not paid or deposited on or before taking possession of
the land, the Collector shall pay the amount awarded with interest
thereon at the rate of [nine per centum] per annum from the time of so
taking possession until it shall have been so paid or deposited:

Provided that if such compensation or any part thereof is not

paid or deposited within a period of one year from the date on which
possession is taken, interest at the rate of fifteen per centum per annum
shall be payable from the date of expiry of the said period of one year
on the amount of compensation or part thereof which has not been paid
or deposited before the date of such expiry.”

Page 21 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

34 In Rama Bai (supra), the Supreme Court held that the arrears
towards interest computed on delayed or enhanced compensation under
Section 28 or Section 34 of the Land Acquisition Act, 1894 shall be
taxable on accrual basis from year to year basis and not at one go – in
the year of actual receipt of the award.

35 In 2003, Section 194A(3)(ix) came to be inserted to prescribe that

on credit or payment of interest awarded by the MACT exceeding
Rs.50,000/-, TDS is required.

36 In Hansaguri (supra), the applicant claimed before this High Court

that the amount of interest awarded by the MACT should be spread
across the different claimants as well as across the different years.
Following Rama Bai (supra), a Coordinate Bench of this Court held that
the interest would be spread over different years and if thereafter, if it
exceeds Rs.50,000/- in any year, then for that year to year, the TDS
would be liable to be deducted.

37 In 2009, by Finance (No.2) Act, 2009, Section 145A(b) and

Section 56(2)(viii) came to be amended and with the same, Rama Bai
(supra) got diluted. Two sections came to be amended to provide that so
far as the interest on delayed or enhanced compensation (under the
Land Acquisition Act, 1894) was concerned, the same was taxable only
in the year of receipt and would not be spread over the years.

38 The Finance Act, 2015 amended Section 194A(3) to divide it into

two parts:

(ix) said that in relation to only credit, no TDS is required.

Page 22 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

(ixa) said that in relation to payment, if it is less than 50,000/-,

then no TDS.

The aforesaid was done to rationalise Section 194A so as to give

effect of the earlier amendment of 2009 which said that the taxability of
interest would arise only in the year of receipt and therefore, in the years
of its accrual there was no tax incidence. Therefore, to that extent the
194A(3)(ix) was inconsistent and was accordingly corrected.

39 In 2016, one another judgement came to be delivered by this High

Court in the case of New India Assurance Co. Limited vs. Bhoyabhai
Haribhai Bharvad reported in 2017 ACJ 1727. In the case of Bhoyabhai
(supra), the Insurance Company had deducted tax and deposited with
the Income Tax Department. The claimant asserted that the total sum
without deduction should have been deposited with the Tribunal itself.
This Court examined the issue keeping the amended Section 194A in
mind (but not Section 145A(b)) and proceeded to take the view on facts
that none of the spread overs the ceiling of Rs.50,000/- was breached
and therefore, the Insurance Company ought to have deducted the tax.
We quote the relevant observations:

“9. Sub section (3) of Section 194A, however, includes those cases
which would be excluded from the purview of sub section (1). Relevant
portion of sub section (3) as its stood prior to 01.06.2015 amendment
read as under:

“194A. (3) The provisions of sub-section (1) shall not apply- (ix)
to such income credited or paid by way of interest on the
compensation amount awarded by the Motor Accident Claims
Tribunal where the amount of such income or, as the case may
be, the aggregate of the amounts of such income credited or paid
during the financial year does not exceed fifty thousand rupees;”

10. The Gujarat High Court in case of Smt. Hansagauri Prafulchandra

Ladhani and ors vs. The Oriental Insurance Company Ltd (supra) had

Page 23 of 51
C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

occasion to interpret this provision. W.e.f. 01.06.2015, however, this

Clause (ix) of sub section (3) of Section 194A has been omitted and is
replaced by Clauses (ix) and (ixa) which read as under:

“(ix) to such income credited by way of interest on the

compensation amount awarded by the Motor Accidents Claims
Tribunal; (ixa) to such income paid by way of interest on the
compensation amount awarded by the Motor Accident Claims
Tribunal where the amount of such income or, as the case may
be, the aggregate of the amounts of such income paid during the
financial year does not exceed fifty thousand rupees.”

11. Under Clause (ix) to sub section (3) of Section 194A of the Act, as it
originally stood, requirement of deducting tax at source under sub
section (1) would not apply in a case where any income is credited or
paid by way of interest on compensation amount awarded by Motor
Accident Claims Tribunal where the amount of such income or, the
aggregate amounts of such income credited or paid during the financial
year does not exceed fifty thousand rupees. This provision of Clause
(ix) is now divide into two parts and is replaced by Clauses (ix) and
(ixa). Clause (ix), in the present form, refers to such income credited by
way of interest on the compensation amount awarded by the Claims
Tribunal. The case of crediting of interest on compensation therefore,
would fall in Clause (ix) as it stands currently. Under Clause (ixa)
would fall, any payment of interest on compensation awarded by the
Claims Tribunal where the amount of such income or the aggregate
paid during the financial year does not exceed fifty thousand rupees.

12. It would, therefore, be wholly incorrect to read the current

provision of sub section (3) of Section 194A to argue that the cases of
income credited by way of interest on compensation awarded by the
Claims Tribunal is no longer part of sub section (3) for exclusion from
purview of sub section (1) of Section 194A. In other words, worded
slightly differently. The case of credit of interest on compensation
awarded by the Claims Tribunal continues to find place in the exclusion
clause contained in sub section (3) of Section 194A. In fact, it would
prima facie appear that the ceiling of Rs. 50,000/- per annum for such
exclusion is now done away with in case of crediting of interest on
compensation awarded by the Claims Tribunal while retaining such
limit in cases of payment of interest on such compensation. However,
we need not thresh out this last part of the issue since admittedly, in
the present case, for none of the years under consideration, the interest
income exceeded Rs. 50,000/-. In fact, this Court in case of Smt.
Hansagauri Prafulchandra Ladhani and ors vs. The Oriental Insurance
Company Ltd (supra) provided for further splitting up of this ceiling of
Rs. 50,000/- per claimant basis. Looked from any angle, the insurance
company was not justified in deducting tax at source while depositing
the compensation in favour of the claimants. It therefore, cannot avoid

Page 24 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

liability of depositing such amount with the Claims Tribunal. The

Claims Tribunal had committed no error in insisting on the insurance
company in making good the shortfall.

13. At this stage, learned counsel for the petitioner drew our attention
to the order dated 05.03.2012 passed by this Court in Civil Application
No. 2592 of 2012, in which, the insurance company had deposited with
the Income Tax Department a sum of Rs. 7, 91, 971/- by way of tax on
compensation of Rs. 34,39,070/- awarded by the Claims Tribunal. This
Court allowed the claimants to seek refund of such amount from the
Income Tax department and permitted the insurance company to
receive it back from the claimants as and when such refund would be
made by the Income Tax department. However, in the present case, we
are not inclined to accept such a formula. Firstly, the amount in
question is not very large. Secondly, in order to provide for such
formula, we would have to call upon the claimants to appear before us,
a luxury which poor litigants can ill-afford. Thirdly, the insurance
company should have properly adviced itself before effecting tax at
source on the ground that the judgement of this Court in case of Smt.
Hansagauri Prafulchandra Ladhani and ors vs. The Oriental Insurance
Company Ltd (supra) was no longer good law in view of the statutory
amendments. Not having done that the only course left open to the
insurance company would be to approach the Income Tax department
for refund, as may be adviced.”

40 In the Finance Act, 2021, the erstwhile Section 145A(b) is now

Section 145B(1).

41 The case of the Revenue is that the legislative intent in insertion of

Section 145A(b) is very clear. According to the Revenue, the interest
received on any compensation or enhanced compensation is deemed to
be income of the assessee in the year of its receipt after the insertion of
Section 145A(b). The ratio of Rama Bai (supra) stands overruled by
Section 145A(b) and therefore, to that extent, even Hansaguri (supra) is
not relevant after the insertion of Section 145A(b). According to the
Revenue, the interest received as a part of the award is deemed to be
income in the year of its receipt and is not to be accounted across many
years under the accrual system.

Page 25 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

42 According to the Revenue, such interest income is liable to the

TDS under Section 194A(3)(ixa) if it exceeds Rs.50,000/- for any
claimant at the time of its deposit by the Insurance Company with the
Tribunal.

43 The stance of the Revenue is that Bhoyabhai (supra) failed to take

notice of the amendment in Section 145A(b) and thereby ordered to
spread over the ceiling of Rs.50,000/- over years.

44 The stance of the Revenue is that whenever any Insurance

Company would deposit the amount with the Tribunal, at that time, if
the total sum deposited exceeds Rs.50,000/- for any claimant, then for
that claimant, tax is required to be deducted.

 FINAL ANALYSIS:

45 Section 171 of the Motor Vehicles Act, 1988 empowers the

Tribunal to award interest on the claim made under the Motor Vehicles
Act from the date of making the claim. Sections 28 and 34 resply of the
Land Acquisition Act, 1894 relate to the interest on compensation for the
land compulsorily acquired and the compensation received for.

46 It is very essential to bear the fine distinction between the interest

awarded under the two enactments viz. the Motor Vehicles Act,1988 and
the Land Acquisition Act, 1894 resply. There are few amendments
brought under the Income Tax Act keeping a specific law (Land
Acquisition Act, 1894) in mind. Various High Courts have taken the view
that the treatment of all the three Sections 28, & 34 resply of the Land
Acquisition Act and Section 171 of the Motor Vehicles Act interest is not

Page 26 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

the same so far as taxability under the Income Tax Act is concerned.

47 The amendment in Section 145A(b) only creates a deeming fiction

as to the year of taxability of the interest on compensation. It does not
create a deeming fiction as to the taxability of the interest on
compensation. Even after the insertion of Section 145A(b), the interest
on compensation under the Motor Vehicles Act which is exempt does not
become taxable by operation of Section 145A(b).

48 The compensation received under the compulsory acquisition of

land is in any case taxable under Section 45 as the Capital Gains and
therefore, the issue under the Land Acquisition with regard to interest
under Sections 28 and 34 i.e limited to the extent that the same would
be taxable under Section 56(2)(viii) (Section 34 interest) or Section 45
the Capital Gains (Section 28 interest that is part of the compensation)
and therefore, only the year of its taxability is decided by Section
145A(b) and not the taxability of interest on the compulsory acquisition
of land. Whereas under the Motor Vehicles Act, the compensation itself
is exempt. The nature of interest, therefore, would assume significance
and cannot be given the same treatment as interest on compensation
under the Land Acquisition Act and be taxed by operation of Section
145A(b).

49 It is crucial to note that in Rama Bai (supra), the Supreme Court

drew no distinction between the interest under Section 28 and interest
under Section 34 of the Land Acquisition Act, 1894. Later in Ghanshyam
(2009) 315 ITR 1 (SC), the Supreme Court drew this distinction and
held that the interest under Section 28 of the Land Acquisition Act, 1894
would form part of the compensation itself and is taxable under the
capital gain only. The amendment of Section 145A(b), Sections 56(2)

Page 27 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

(viii) and 194A resply would therefore not apply to the interest under
Section 28 of the Land Acquisition Act, 1894, but would apply only to
Section 34 interest as is held in the case of [2016] 388 ITR 343
(Gujarat) Movaliya Bhikhubhai Balabhai. Therefore, the implication of
Sections 145A(b) is not absolute even with respect to the interest
awarded under Section 28 of the Land Acquisition Act and cannot apply
to the interest awarded by the MACT as well.

50 The term “income” is inclusively defined in Section 2(24). Such

definition does not include the “interest” referred to in the Section 56(2)
(viii) or interest received in the MACT award.

51 The words of Section 194A(3) are crucial i.e “income by way of

interest” and not simply “interest”. Therefore, even when interest is paid,
if the same is received not in the name of “income”, then Section
194A(3) would not operate.

52 Therefore, the interest on compensation not being taxable at all

there is no question of deducting tax on the same under Section 194(A).

53 In Hansaguri (supra), the Court had no occasion to examine the

taxability of the interest which proceeded on the basis that it is taxable.
Therefore, now if it is held to be exempt, the guidelines prescribed in
Hansaguri (supra) are no longer applicable. The Insurance Company
must deposit the full award before the Tribunal without deducting tax
and the same is to be disbursed to the claimants.

 RATIONALIZATION OF PROVISIONS FOR TAXATION OF

INTEREST RECEIVED ON ENHANCED COMPENSATION OR
DELAYED COMPENSATION:

Page 28 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

54 The existing provisions of the Income Tax Act provide that the
income chargeable under the head “Profits and gains of business or
profession” or “Income from other sources”, shall be computed in
accordance with either cash or mercantile system of accounting
regularly employed by the assessee. Further, the Supreme Court, in the
case of Rama Bai (supra) has held that arrears of interest computed on
delayed or enhanced compensation shall be taxable on accrual basis.
This has caused undue hardship to the taxpayers. With a view to
mitigating the hardships, it is proposed to amend Section 145A to
provide that the interest received by an assessee on compensation or
enhanced compensation shall be deemed to be his income for the year in
which it is received, irrespective of the method of accounting followed
by the assessee. Further, it is proposed to insert clause (viii) in sub-
section (2) of Section 56 to provide that income by way of interest
received on compensation or on enhanced compensation referred to in
sub-section (2) of Section 145A shall be assessed as “income from other
sources” in the year in which it is received. This amendment will take
effect from 1st April 2010 and shall accordingly apply in relation to the
assessment year 1998-99 and subsequent assessment years. [Clauses 26,
27, 56]

 RATIONALISATION OF PROVISIONS RELATING TO DEDUCTION

OF TAX ON INTEREST (OTHER THAN INTEREST ON
SECURITIES):

55 Under Section 194(3)(ix) of the Act, tax is not required to be

deducted from the interest or paid on the compensation amount
awarded by the Motor Accident Claim Tribunal if the amount of such
interest credited or paid during a financial year does not exceed

Page 29 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

Rs.50,000/-. Finance (No.2) Act, 2009 amended the provisions of

Section 56 of the Act as well as substituted Section 145A of the Act to,
inter alia, provide that interest income received on compensation or
enhanced compensation shall be deemed to be the income of the year in
which the same has been received. However, the existing provisions of
Section 194A of the Act provide for deduction of tax from the interest
paid or credited on compensation, whichever is earlier. Section 145A(b)
of the Act provides an exception to the method of accounting contained
in Section 145 of the Act and mandates for taxation of interest on
compensation on receipt basis only. Therefore, deduction of tax on such
interest on mercantile / accrual basis results into undue hardship and
mismatch. It is, therefore, proposed to amend the provisions of Section
194A of the Income Tax Act, 1961 to provide that deduction of tax
under Section 194A of the Act from the interest payment on the
compensation amount awarded by the Motor Accident Claim Tribunal
compensation shall be made only at the time of payment, if the amount
of such payment or aggregate amount of such payments during a
financial year exceeds Rs.50,000/-. These amendments will take effect
from 1st June, 2015. [Clause 42].

56 We are of the view that compensation under the award of the

MACT is not income. The expression “income” used in the Entry 82 of
List I of Seventh Schedule to the Constitution can be given widest
meaning. Under Section 2(24), the definition is inclusive and not
exhaustive. In the absence of any express provision to the contrary,
income can be held to refer to something earned. What is received as
compensation for loss in one or the other form may not be income.

 CASE LAW:
57 It was observed in the Commissioner of Income Tax, Bengal Vs.

Page 30 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

Shaw Wallace and Company [AIR 1932 Privy Council 138] by the Privy
Council as under:

“The object of the Indian Act is to tax “income” a term which it does not
define. It is expanded, no doubt, into income, profits and gains,” but
the expansion is more a matter of words than of substance, Income,
their Lordships think, in this cannotes a periodical monetary return
“coming in” with some sort of regularity, or expected regularity, from
definite sources. The source is not necessary one which is expected to
be continuously productive, but it must be one whose object is the
production of a definite return, excluding anything in the nature of a
mere windfall. Thus income has been likened pictorially to the fruit of a
tree, or the crop of a field. It is essential the produce of something,
which is often loosely spoken of as “capital”. But capital, though
possibly the source in the case of income from securities, is in most
cases hardly more than an element in the process of production.”

58 In Rani Amrit Kunwar Vs. Commissioner of Income Tax, C. P. &

U.P. (1946) XIV ITR 561, the Allahabad High Court observed:-

“Under Indian law, therefore, we come back in my opinion, to the

relatively simple test whether in the ordinary parlance of language
what the assessee receives is “income” or not. I should not dream of
suggesting that every payment made by one person to another is
necessarily the recipient's income since it may, as Viscount Dunedin has
said, be merely a casual payment or, as Sir George Lowndes has
suggested, a mere windfall. Such sweeping proposition would be
absurd. Many things have to be considered. In the case of a payment by
a parent to a child or by a husband to a wife or by one relation to
another obvious questions arise whether in the particular circumstances
of each case the payments are made in such a way as to constitute what
is paid the money of the recipient at all or whether the payments
themselves are not merely a series of casual payments or windfalls. But
there seems to me to be another class of cases altogether in which in
particular circumstances payments may be made by one person to
another which can only be explained on the ground that the giver
intends to give, and the recipient expects to receive, with regularity or
expected regularity and from a source the nature of which is to produce
such a payment, an “income” which is in the income-tax sense his own.
I can find nothing in the Indian Income-tax Act to warrant any general
conclusion that it is only in a case in which, if the payment is
discontinued, the recipient will have an immediate right of action
against the payer, that it will be income in his hands in the Indian
income-tax sense. That is to put too limited a construction on the word

Page 31 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

“income.” If the payments are such as to come within the category of

payments which are casual and nonrecurring, then it is to be observed
that the Act itself has taken them out of the category of “income”. The
very fact that the framers of the Indian Income-tax Act found it
necessary by a special clause to exempt casual and non-recurring
receipts from the category of income, profits and gains is itself, in my
opinion, an indication that, but for that exemption, they are to be
regarded as capable of falling within the class of income, profits or
gains under the charging section. If it is to be assumed that ex
hypothesi a casual and nonrecurring payment could never be income,
then, as I see it, the statutory exception of it would be otiose and
unnecessary. Another reason is afforded by Section 4 (3)(ii) of the
Income-tax Act for inducing me to think that so narrow a construction
cannot be placed on the word “income”. If the assessee were right in
saying that the test of “obligation” has in all cases to be applied in
deciding what is or is not “income”, it is difficult to see why voluntary
contributions to a religious or charitable institution (whether applicable
solely to religious or charitable purposes or not) should be specially
excepted by the Act. The conclusion, therefore, I have reached is that,
in construing that word “income” in the Indian Income-tax Act, one has
to ask oneself whether, having regard to all the circumstances
surrounding the particular payments and receipts in question, what is
received is of the character of income according to the ordinary
meaning of that word in the English language or whether it is merely a
casual receipt or mere windfall.”

59 In Raghuvanshi Mills Ltd., Bombay Vs. Commissioner of Income-

Tax, Bombay City, (1952) XXII ITR 484 while considering the nature of
receipt of insurance claim for the business loss, the Supreme Court
observed:-

“It is true the Judicial Committee attempted a narrower definition in

Commissioner of Income-tax v. Shaw Wallace & Co., by limiting income
to “a periodical monetary return 'coming in' with some sort of
regularity, or expected regularity, from definite sources” but, in our
opinion, those remarks must be read with reference to the particular
facts of that case. The non-recurring aspect of this kind of receipt was
considered by the Privy Council in The King v. B.C. Fir and Cedar
Lumber Co. and we do not think their Lordships had in mind a case of
this nature when they decided Shaw Wallace & Company's case.”

60 In Raja Bahadur Kamakshya Narain Singh of Ramgarh Vs.

Commissioner of Income-Tax, Bihar and Orissa, AIR 1943 Privy Council

Page 32 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

153, it was observed:-

“Income is not necessarily the recurrent return from a definite source,

though it is generally of that character. Income again may consist of a
series of separate receipts, as it generally does in the case of
professional earnings. The multiplicity of forms which “income” may
assume is beyond enumeration. Generally, however, the mere fact that
the income flows from some capital assets, of which the simplest
illustration is the purchase of an annuity for a lump sum, does not
prevent it from being income, though in some analogous cases the true
view may be that the payments, though spread over a period, are not
income, but instalments payable at specified future dates of a purchase
price. Such a case is illustrated by (1903) A.C.299. But, in their
Lordships' judgment, the royalties here are clearly income and not
capital. They are periodical payments for the continuous enjoyment of
the various benefits under the leases. The actual acquisition of the
property in a particular ton of coal at the moment when the lessees
have cut and taken away the coal is only the final stage.”

61 In Navinchandra Mafatlal, Bombay Vs. Commissioner of Income

Tax, Bombay City, AIR 1955 S.C. 58, while considering the question
whether capital gain could be treated as income if so provided for under
statutory provisions, it was observed:-

“7. What, then, is the ordinary, natural and grammatical meaning of the
word "income"? According to the dictionary it means "a thing that
comes in." (See Oxford Dictionary, Vol. V. p. 162; Stroud, Vol. II, pp.
14-16). In the United States of America and in Australia both of which
also are English speaking countries the word "income" is understood in
a wide sense so as to include a capital gain. Reference may be made to -
'Eisner v. Macomber', (1919) 252 US 189 (K); -'Merchants' Loan and
Trust Co. v. Smietanka', (1920) 255 US 509 (L) and - 'United States of
America v. stewat', (1940) 311 US 60 (M) and - 'Resch v. Federal
Commissioner of Taxation', (1943) 66 CLR 198 (N). In each of these
cases very wide meaning was ascribed to the word "income" as its
natural meaning.”

62 In The Commissioner of Income-Tax, Hyderabad, Deccan Vs. M/s

Vazir Sultan and sons, AIR 1959 SC 814 the issue was whether
compensation for loss of agency was a capital receipt. The compensation

Page 33 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

for loss of agency was held to be a capital receipt on the ground that the
agency was a capital asset in that case. It was observed:-

“35. .....The agency agreements in fact formed a capital asset of the

assessee's business worked or exploited by the assessee by entering into
contracts for the sale of the "charminar" cigarettes manufactured by the
Company to the various customer and dealers in the respective
territories. This asset really formed part of the fixed capital of the
assessee's business. It did not constitute the business of the assessee but
was the means by which the assessee entered into the business
transactions by way of distributing those cigarettes within the
respective territories. It really formed the profit-making apparatus of
the assessee's business of distribution of the cigarettes manufactured by
the Company. If it was thus neither circulating capital nor stock-in-trade
of the business carried on by the assessee it could certainly not be
anything but a capital asset of its business and any payment made by
the Company as and by way of compensation for terminating or
cancelling the same would only be a capital receipt in the hands of the
assessee.”

63 In Navnit Lal C. Javeri Vs. K. K.Sen AIR 1965 SC 1375, it was

observed:-

“16. The question which now arises is, if the impugned section treats
the loan received by a shareholder as a dividend paid to him by the
company, has the legislature in enacting the section exceeded the limits
of the legislative field prescribed by the present Entry 82 in List I? As
we have already noticed, the word "income" in the context must receive
a wide interpretation; how wide it should be it is unnecessary to
consider, because such an enquiry would be hypothetical. The question
must be decided on the facts of each case. There must no doubt be
some rational connection between the item taxed and the concept of
income liberally construed. If the legislature realises that the private
controlled companies generally adopt the device of making advances or
giving loans to their shareholders with the object of evading the
payment of tax, it can step in to meet this mischief, and in that
connection, it has created a fiction by which the amount ostensibly and
nominally advanced to a shareholder, as a loan is treated in reality for
tax purposes as the payment of dividend to him. We have already
explainer how a small number of shareholders controlling a private
company adopt this device. Having regard to the fact that the
legislature was aware of such devices, would it not be competent to the
legislature to device a fiction for treating the ostensible loan as the
receipt of dividend? In our opinion, it would be difficult to hold that in

Page 34 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

making the fiction, the legislature has travelled beyond the legislative
field assigned to it by entry 82 in List 1.”

64 In Senairam Doongarmall Vs. Commissioner of Income-Tax,

Assam, AIR 1961 SC 1579, the question was whether compensation
received from military authority on account of loss of earning of tea
estate was income or capital receipt. It was observed that quality of
payment was decisive of the character of income and compensation
received was not income. During the discussion following passage from
English judgment in Sutherland Vs. Commissioners of Inland Revenue
(1918) 12 Tax Case 63 was referred:-

“Now it is quite clear that if a source of income is destroyed by the

exercise of the paramount right... and compensation is paid for it, that
that is not income, although the amount of compensation is the same
sum as the total of the income that has been lost.”

65 In CIT v. G.R. Karthikeyan, 1993 Supp 3 SCC 222, it was

observed:-

“7. It is not easy to define income. The definition in the Act is an

inclusive one. As said by Lord Wright in Kamakshya Narayan Singh v.
CIT, (1943) 11 ITR 513 (PC) “income ... is a word difficult and perhaps
impossible to define in any precise general formula. It is a word of the
broadest connotation”. In Gopal Saran Narain Singh v. CIT (1935) 3
ITR 237 (PC) the Privy Council pointed out that “anything that can
properly be described as income is taxable under the Act unless
expressly exempted”. This Court had to deal with the ambit of the
expression ‘income’ in Navinchandra Mafatlal v. CIT, (1954) 26 ITR
758. The Indian Income Tax and Excess Profits Tax (Amendment) Act,
1947 had inserted Section 12(B) in the Indian Income Tax Act, 1922.
Section 12(B) imposed a tax on capital gains. The validity of the said
amendment was questioned on the ground that tax on capital gains is
not a tax on ‘income’ within the meaning of Entry 54 of List 1, nor is it a
tax on the capital value of the assets of individuals and companies
within the meaning of Entry 55 of List 1 of the Seventh Schedule to the
Government of India Act, 1935. The Bombay High Court repelled the
attack. The matter was brought to this Court. After rejecting the

Page 35 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

argument on behalf of the assessee that the word ‘income’ has acquired,
by legislative practice, a restricted meaning — and after affirming that
the entries in the Seventh Schedule should receive the most liberal
construction — the Court observed thus:

“What, then, is the ordinary, natural and grammatical meaning of the

word ‘income’? According to the dictionary it means ‘a thing that comes
in’. (See Oxford Dictionary, Vol. V, p. 162; Stroud, Vol. II, pp. 14-16).
In the United States of America and in Australia both of which also are
English speaking countries the word ‘income’ is understood in a wide
sense so as to include a capital gain. Reference may be made to Eisner
v. Macomber, 252 US 189; Merchants’ Loan and Trust Co. v.
Smietunka, 255 US 209 and United States v. Stewart, 311 US 60 and
Resch v. Federal Commissioner of Taxation, 66 CLR 198 (1943). In
each of these cases very wide meaning was ascribed to the word
‘income’ as its natural meaning. The relevant observations of learned
Judges deciding those cases which have been quoted in the judgment of
Tendolkar, J. quite clearly indicate that such wide meaning was put
upon the word ‘income’ not because of any particular legislative
practice either in the United States or in the Commonwealth of
Australia but because such was the normal concept and connotation of
the ordinary English word ‘income’. Its natural meaning embraces any
profit or gain which is actually received. This is in consonance with the
observations of Lord Wright to which reference has already been made.

The argument founded on an assumed legislative practice being thus

out of the way, there can be no difficulty in applying its natural and
grammatical meaning to the ordinary English word ‘income’. As already
observed, the word should be given its widest connotation in view of
the fact that it occurs in a legislative head conferring legislative power.”
(emphasis supplied)

8. Since the definition of income in Section 2(24) is an inclusive one, its

ambit, in our opinion, should be the same as that of the word income
occurring in Entry 82 of List I of the Seventh Schedule to the
Constitution (corresponding to Entry 54 of List I of the Seventh
Schedule to the Government of India Act).”

66 In the context of compensation received under the Motor Vehicles

Act, the compensation is either on account of loss of earning capacity on
account of death or injury or on account of pain and suffering. Such
receipt is not by way of earning or profit. Award of compensation is on
the principle of restitution to place the claimant in the same position in
which he would have been had the loss of life or injury not been

Page 36 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

suffered. In Gobald Motor Service Ltd. and another Vs. R. M. K.

Veluswami and others [AIR 1962 SC 1], it was observed:-

“The same principle was restated with force and clarity by Viscount
Simon in Nance v. British Columbia Electric Railway Co. Ltd., 195l AC
601. There, the learned Lord was considering the analogous provisions
of the British Columbia legislation, and he put the principle thus at p.
614:

"The claim for damages in the present case falls under two
separate heads. First, if the deceased had not been killed, but
had eked out the full span of life to which in the absence of the
accident he could reasonably have looked forward, what sums
during that period would he probably have applied out of his
income to the maintenance of his wife and family?".”

67 In Central Bank of India Vs. Ravindra and others [AIR 2001 SC

3095], the question was whether the interest component of the principal
sum could carry further interest. It was observed:-

“44. We are of the opinion that the meaning assigned to the expression
'the principal sum adjudged' should continue to be assigned to
"principal sum" at such other places in Section 34(1) where the
expression has been used qualified by the adjective "such", that is to
say, as "such principal sum". Recognition of the method of capitalisation
of interest so as to make it a part of the principal consistently with the
contract between the parties or established banking practice does not
offend the sense of reason, justice and equity. As we have noticed such
a system has a long established practice and a series of judicial
precedents upholding the same. Secondly, the underlying principle as
noticed in several decided cases is that when interest is debited to the
account of the borrower on periodical rests, it is debited because of its
having fallen due on that day. Nothing prevents the borrower from
paying the amount of interest on the date it falls due. If the amount of
interest is paid there will be no occasion for capitalising the amount of
interest and converting it into principal. If the interest is not paid on the
date due, from that date the creditor is deprived of such use of the
money which it would have made if the debtor had paid the amount of
interest on the date due. The creditor needs to be compensated for
deprivation. As held in Pazhaniappa Mudaliar v. Narayana Ayyar
(supra), the fact situation is analogous to one as if the creditor has
advanced money to the borrower equivalent to the amount of interest
debited. We are, therefore, of the opinion that the expression "the
principal sum adjudged" may include the amount of interest, charged

Page 37 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

on periodical rests, and capitalised with the principal sum actually

advanced, so as to become an amalgam of principal in such cases where
it is permissible or obligatory for the Court to hold so. Where the
principal sum (on the date of suit) has been so adjudged, the same shall
be treated as "principal sum" for the purpose of "such principal sum" -
the expression employed later in Section 34 of C.P.C. The expression
"principal sum" cannot be given different meanings at different places in
the language of same section, i.e. Section 34 of C.P.C.”

68 In Drawing and Disbursing Officer vs. Income Tax Officer [Income

Tax Appeal No.495 of 2009 decided on 30 th March 2011], the Punjab
and Haryana High Court held as under:

“21. Having regard to nature of receipt of compensation as per award

under the M.V.Act, compensation is in the nature of capital receipt for
death or injury and cannot be held to be in the nature of income.
Learned counsel for the revenue also fairly accepts this legal position. It
appears to be for this reason that the said receipt is not sought to be
treated as income.

22. We may now consider the question whether interest on account of

delay in adjudication becomes part of compensation or can be treated
as a separate component of income.

23. Section 171 of the M.V.Act authorizes the Tribunal to award

interest on the claim made under the Act from the date of making the
claim. It reads thus:

“171.Award of interest where any claim is allowed:

Where any Claims Tribunal allows a claim for compensation

made under this Act, such Tribunal may direct that in addition to
the amount of compensation simple interest shall also be paid at
such rate and from
such date not earlier than the date of making the claim as it may
specify in this behalf.”

24. In the context of compensation under the provisions of Land

Acquisition Act, 1894, the Hon'ble Supreme Court in Commissioner of
Income-Tax Vs. Ghanshyam (HUF), (2009) 315 ITR 1 SC held that
interest paid by the Collector under Section 34 of the said Act was part
of compensation and was treated to be at par with the compensation for
purposes of taxability. The relevant observations therein are:-

“…Section 28 of the 1894 Act applies only in respect of the

Page 38 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

excess amount determined by the Court after reference under

Section 18 of the 1894 Act. It depends upon the claim, unlike
interest under Section 34 which depends on undue delay in
making the award. It is true that “interest” is not compensation.
It is equally true that Section 45(5) of the 1961 Act refers to
compensation. But as discussed hereinabove, we have to go by
the provisions of the 1894 Act which awards “interest” both as
an accretion in the value of the lands acquired and interest for
undue delay. Interest under Section 28 unlike interest under
Section 34 is an accretion to the value, hence it is a part of
enhanced compensation or consideration which is not the case
with interest under Section 34 of the 1894 Act…”

69 We have a very erudite and lucid order passed by the Income Tax
Appellate Tribunal, Ahmedabad Bench in the case of Urvi Chirag Sheth
vs. Income-tax Officer, Ward 5(2)(3), Ahmedabad reported in [2016] 70
taxmann.com 33(Ahmedabad-Trib.), wherein the following has been
observed:

“5. As we have noted earlier in this order, the assessee had to go right
upto Hon’ble Supreme Court to have her compensation claim accepted.
What ought to have been paid to her soon after the accident, was
eventually paid in full after twenty one years of the tragic incident.
Hon’ble Supreme Court, vide judgment dated 26th April 2011,
concluded that “Considering all this, we grant compensation of Rs 15
lacs (Rupees fifteen lacs) with interest at the rate of 8% on the
enhanced compensation from the date of filing the claim petition before
MACT (Motor Accidents Claims Tribunal) till the date of realization”.
The payment made to the assessee, therefore, is in the nature of
compensation for the loss of her mobility and physical damages.
Clearly, such a receipt, in principle, is a capital receipt and beyond the
ambit of taxability of income since only such capital receipts can be
brought to tax as are specifically taxable under section 45. Hon'ble
Supreme Court has, in the case of Padmaraje R. Kadambande vs. CIT
[(1992) 195 ITR 877 (SC)], observed that, ". . . . we hold that the
amounts received by the assessee during the financial years in question
have to be regarded as capital receipts and, therefore, are not income
within meaning of s. 2(24) of the Income Tax Act." [Emphasis
supplied]. This clearly implies, as is the settled law, that a capital
receipt, in principle, is outside the scope of 'income' chargeable to tax
and a receipt cannot be taxed as income unless it is in the nature of a
revenue receipt or is specifically brought within ambit of 'income' by
way of specific provisions of the Income Tax Act. The accident
compensation is thus not taxable as income of the assessee. What is

Page 39 of 51
C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

termed as interest also is of the same character and it seeks to

compensate the time value of money on account of delay in payment.
On the first principles, such an interest cannot have a standalone
character of income, unless the interest itself is a kind of statutory
interest at the prescribed rate of interest. Right now, however, we are
dealing with a situation in which the interest is awarded by Hon’ble
Supreme Court in its complete and somewhat unfettered discretion. An
interest of this nature is essentially a compensation in the sense it
accounts for a fall in value of money itself at the point of time when
compensation became payable vis-a-vis the point of time when it was
actually paid, or, for the shrinkage of, what can be termed as, a
measuring rod of value of compensation. If the money was given on the
date of presenting the claim before the MACT, it would have been Rs 15
lacs but since there is an inordinate, though partial, delay in payment of
this amount, interest payment is to factor for fall in value of money in
the meantime. The transaction thus remains the same, i.e.
compensation for disability, and the interest rate, on a rather notional
basis, is taken into account to compute the present value of the
compensation which was lawfully due to the assessee in a somewhat
distant past. Viewed thus, the amount of compensation received at this
point of time, whichever way is it computed, has the same character. If
compensation itself is not taxable, the interest on account of delay in
payment of compensation cannot be taxable either. In the case of CIT
Vs Oriental Insurance Co Ltd [(2012) 211 Taxman 369 (All)], Hon’ble
Allahabad High Court has, inter alia, held that “To our opinion, the
award of compensation under motor accidents claims cannot be
regarded as income. The award is in the form of compensation to the
legal heirs for the loss of life of their bread earner. Hence the interest
on such an award cannot be termed as income to the legal heirs or to
the victim himself”. Their Lordships have also observed, referring to a
series of judicial precedents on the issue, that “if interest awarded by
the court for loss suffered on account of deprivation of property or paid
for breach of contract by means of damages, or were not paid in respect
of any debt incurred or money borrowed, shall not attract the
provisions of Section 2(28A) read with Section 194A(1) of the Income
Tax Act”. Essentially, this conclusion supports the school of thought that
when principal transaction, i.e. accident compensation for the delayed
payment of which the interest is awarded, itself is outside the ambit of
taxation, similar fate must follow for the subsidiary transaction, i.e.
interest for delay in payment of compensation, as well. Touching a
different chord but coming to the rescue of the assessee, Hon’ble Punjab
& Haryana High Court, in the case of CIT Vs B Rai [(2004) 264 ITR 617
(P&H)], draws a line of demarcation between the interest granted
under the statutory provisions and interest granted under discretion of
the court, and holds that the latter is outside the scope of ‘income’
which can be brought to tax under the Income Tax Act, 1961. As Their
Lordships stated, in so many words, “where interest………is to be paid
is in the discretion of the court, as in the present case, the said interest

Page 40 of 51
C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

would not amount to ‘income’ for the purposes of income tax”. That
precisely is the situation before us as well.

6. Revenue, however, does not even challenge these propositions, and,

in our considered view, rightly so; it is only on the scope of provisions
of Section 145A(b) and section 56(2)(viii) that they rest their case. It is,
therefore, perhaps only appropriate to appreciate the scope of these
provisions and take a look at the facts surrounding introduction of these
provisions vide the Finance Act 2009.

7. Ironically, the statutory provisions being pressed into service to bring

this income to tax, were provisions meant to give relief to the assessee.
When these provisions were introduced, the Memorandum Explaining
the Provisions of the Finance Bill 2009 had this to say:

Rationalization of provisions for taxation of interest received on

delayed compensation or enhanced compensation

The existing provisions of Income-tax Act provide that income

chargeable under the head “Profits and gains of business or profession”
or “Income from other sources”, shall be computed in accordance with
either cash or mercantile system of accounting regularly employed by
the assessee. Further, the Hon’ble Supreme Court, in the case of Rama
Bai Vs. CIT (181 ITR 400) has held that arrears of interest computed on
delayed or enhanced compensation shall be taxable on accrual basis.
This has caused undue hardship to tax payers. With a view to
mitigating the hardship, it is proposed to amend section 145A to
provide that the interest received by an assessee on compensation or
enhanced compensation shall be deemed to be his income for the year
in which it is received, irrespective of the method of accounting
followed by the assessee. Further, it is proposed to insert clause (viii) in
sub-section (2) of section 56 to provide that income by way of interest
received on compensation or on enhanced compensation referred to in
sub-section (2) of section 145A shall be assessed as “income from other
sources” in the year in which it is received. This amendment will take
effect from 1st April, 2010 and shall accordingly apply in relation to
assessment year 1998-99 and subsequent assessment years. [Clauses
26,27,56]

8. In the case of Rama Bai (supra), which is raison d'être for this
amendment in law, Hon’ble Supreme Court, speaking through Hon’ble
Justice S Ranganathan- as he then was, one of the most illustrious
former Presidents of this Tribunal, had observed that “the interest
cannot be taken to have accrued on the date of the order of the Court
granting enhanced compensation but has to be taken as having accrued
year after year from the date of delivery of possession of the lands till
the date of such order”. What is significant, however, that taxability of
interest was not in dispute in the said case; the only dispute was the

Page 41 of 51
C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

year in which the income should be taxed. The amendment in law,

therefore, deals with the point of time when an income is it to be
taxable. It does not bring to tax an income which was, until the point of
time when amendment was made, not taxable earlier. Section 145A, it
is important to bear in mind, deals with the method of accounting on
cash or mercantile basis which again has its focus on the point of time
when an income is taxable rather than taxability of income itself. When
an income is not taxable, section 145A has no relevance. It is in this
backdrop that we can take a look at Section 145A which is as follows:

“Section 145A: Method of accounting in certain cases—

Notwithstanding anything to the contrary contained in section

145,—

(a)…………………………..(not relevant for our purposes)

(b) interest received by an assessee on compensation or on

enhanced compensation, as the case may be, shall be deemed to
be the income of the year in which it is received.”

9. Section 145A starts with a non obstante clause which restricts the
scope of Section 145 dealing with the method of accounting. It is not a
charging provision. The only impact it has on taxability of an income is
its timing of taxability. What is not taxable is not made taxable under
section 145A(b) but what is taxable under the mercantile method of
accounting, i.e. on accrual basis, is made taxable on cash basis of
accounting, i.e. at the point of time when interest is actually received.
Nothing else needs to read into this provision, and the memorandum
explaining the provision of Finance Bill 2009, as reproduced earlier,
makes that amply clear. As for the provisions of Section 56(2)(viii), it is
only an enabling provision, as unambiguously made clear in the above
memorandum as well, to bring interest income to tax in the year of
receipt rather than in the year of accrual. Section 56(2)(viii) provides
that……”incomes, shall be chargeable to income tax under the head
‘income from other sources’, namely ….(viii) income by way of interest
received on compensation or enhanced compensation referred to in
clause (b) of Section 145A”. The starting point of this exercise is
income, and it is only when the receipt is in the nature of an income,
that the classification of income under a particular category arises. In
other words, when interest received by the assessee is in the nature of
income, such interest can be taxed under section 56 (2)(viii). Section
56(1) makes this aspect even more clear when it states that “Income of
every kind, which is not to be excluded from the total income under
this Act, shall be chargeable to income tax under the head “income
from other sources”, if it is not chargeable to income tax under any of
the heads specified in Section 14, items A to E”, and then, in the
subsequent provision, i.e. Section 56(2), proceeds to set out an

Page 42 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

illustrative, rather than exhaustive list of, such “incomes”. Clearly,

unless a receipt is not an income, there is no occasion for the provisions
of Section 56(1) or 56(2) coming into play. Section 56 does not decide
what is an income. What it holds is that if there is an income, which is
not taxable under any of the heads under Section 14, i.e item A to E, it
is taxable under the head ‘income from other sources’. The receipt being
in the nature of income is a condition precedent for Section 56 coming
into play, and not vice versa. To suggest that since an item is listed
under section 56(2), even without there being anything to show that it
is of income nature, it can be brought to tax is like putting the cart
before the horse. The very approach of the authorities below is devoid
of legally sustainable merits. The authorities below were thus
completely in error in bringing the interest awarded by Hon’ble
Supreme Court to tax. The question of deduction under section 57(iii),
given the above conclusion, is wholly irrelevant. We vacate this action
of the Assessing Officer, and disapprove the CIT(A)’s action of
confirming the same. Grievance of the assessee is thus upheld.

10. As we part with the matter, we must say that, as fellow citizens, we
are deeply anguished to take note of the long journey that the assessee
had to undertake to get her dues and then to fight this unjust income
tax demand on her. In order to ensure that others do not have to tread
the same arduous path- at least with respect to the tax demand, and to
bring an element of certainty, we would suggest that the Central Board
of Direct Taxes may as well take a conscious call on issuing appropriate
administrative instructions in this regard and ensuring that what was
brought as a measure of relief to the taxpayers is not used, by the field
officers, as a source of taxation. Such a step certainly cannot mitigate
the pain of an accident victim but it can probably help in ensuring that
hardships of the accident victim are not further compounded, and that’s
the least that a responsive tax administration, like the one we
fortunately have at present, can do. We must also place on record that
fact that despite smallness of amount involved, learned representatives
have rendered valuable assistance in this case, and that we deeply
appreciate their assistance.”

70 In the case of Managing Director, Tamil Nadu State Transport

Corpn. (Salem) Ltd vs. Chinnadurai reported in [2016] 70 taxmann.com
53 (Madras), the Madras High Court held as under:

“13. The question is whether the provisions of the Income Tax Act
1961, and more specifically, whether the compensation awarded by the
Motor Accident Claims Tribunal to the victim can be classified as a
taxable income under the Income Tax law?. The answer to this question
in the opinion of this Court is in the negative. Compensation cannot be

Page 43 of 51
C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

categorized or even described as income as it has already been stated

that the intention of the legislature in awarding compensation to the
victims of Motor Accident cases is to restitute them and rehabilitate
them.

14. The Income Tax Department appears to have issued a circular dated
14.10.2011 whereby deduction of Income Tax has been ordered on the
award amount and the interest accrued on the deposits made under the
order of the Court in Motor Accident Cases. Taking serious view of this
circular, the Division Bench of the Himachal Pradesh High Court took
Suo-Moto cognizance of the matter and considered the same as a Public
Interest Litigation in the judgment reported in Court on its Motion Vs.
H.P.State Co-operative Bank Ltd & Ors 2014 SCC Online HP 4273 and
has quashed the circular and in an elaborate and well considered
judgment, His Lordship the Hon'ble Chief Justice Mansoor Ahmed Mir
has held that:

“13.While going through the said provisions of law, one comes to

the inescapable conclusion that the mandate of the said
provisions does not apply to the accident claim cases and the
compensation awarded under the Motor Vehicles Act cannot be
said to be taxable income. The compensation is awarded in lieu
of death of a person or bodily injury suffered in a vehicular
accident, which is damage and not income.

14. Chapters X and XI of the Motor Vehicles Act, 1988 provides

for grant of compensation to the victims of a vehicular accident.
The Motor Vehicles Act has undergone a sea change and the
purpose of granting compensation under the Motor Vehicles Act
is to ameliorate the sufferings of the victims so that they may be
saved from social evils and starvation, and that the victims get
some sort of help as early as possible. It is just to save them from
sufferings, agony and to rehabilitate them. We wonder how and
under what provisions of law the Income Tax Authorities have
treated the amount awarded or interest accrued on term deposits
made in Motor Accident Claims Cases as income. Therefore, the
said Circular is against the concept and provisions referred to
hereinabove and runs contrary to the mandate of granting
compensation.

...23. Having said so, the Circular, dated 14.10.2011, issued by

the Income Tax Authorities, whereby deduction of income Tax
has been ordered on the award amount and interest accrued on
the deposits made under the orders of the Court in Motor
Accident Claims Cases, is quashed and in case any such
deduction has been made by respondents, they are directed to
refund the same, with interest at the rate of 12% from the date
of deduction till payment, within six weeks from today.”

Page 44 of 51
C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

15. Following the Division Bench Judgment, a learned Single Judge of

the Punjab and Haryana High Court, in a recent decision, in New India
Assurance Company Ltd. Vs.Sudesh Chawla and others, CR.No.430 of
2015 (O&M), reiterating the reasoning given by the Division Bench of
Himachal Pradesh High Court, has opined that award of compensation
is on the principle of restitution to place the claimant in the same
position in which he would have been loss of life or injury has not been
suffered and accordingly held that the orders calling upon the
Insurance Company to pay TDS/deduct TDS on the interest part are not
sustainable.

16. If we look at other jurisdictions like Australia, Unites States and

United Kingdom, even there, the matters where a person has suffered
an injury or there has been a loss of life and a compensation has been
paid in lieu of that, then it has been held by the Courts that there
cannot be any Tax deduction on such compensation. The underlying
basis behind this is that a person who suffers a loss cannot be asked to
part with the solatium he receives since it is the only remedy he has
been provided with by the law.

17. If there is a conflict between a social welfare legislation and a

taxation legislation, then, this Court is of the view that a social welfare
legislation should prevail since it subserves larger public interest. The
Motor Vehicle Act is one such legislation which has been passed with a
benevolent intention for compensating the accident victims who have
suffered bodily disablement or loss of life and the Income Tax Act
which is primarily intended for Tax collection by the State cannot put
spokes in the effective and efficacious enforcement of the Motor
Vehicles Act. In fact, if one might deeply analyse, it could be seen that
there is no direct conflict between any provisions of the Income Tax Act
and the Motor Vehicles Act and it is only by the interpretation of the
provisions the concept of compulsory payment of TDS has crept into the
realm of compensation payment in Motor Vehicle Accident cases.

18. Hence, with due respect I am unable to concur with the findings of
the Karnataka High Court, the Chattisgarh High Court and this Court
cited by the Revision Petitioner. This Court is of the view that the
Division Bench judgment of the Himachal Pradesh high Court and the
judgment of the Single Judge of the Punjab and Haryana High Court lay
down the right law and hence, this Court arrives at the conclusion that
the compensation awarded or the interest accruing therein from the
compensation that has been awarded by the Motor Accident Claims
Tribunal cannot be subjected to TDS and the same cannot be insisted to
be paid to the Tax Authorities since the compensation and the interest
awarded therein does not fall under the term 'income' as defined under
the Income Tax Act, 1961.

Page 45 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

19. Therefore, this Court directs that the Petitioner Corporation cannot
deduct any amount towards TDS and the same shall also be deposited
in addition to the amount that has already been deposited to the credit
of M.C.O.P.No.879 of 2006, on the file of the Motor Accident Claims
Tribunal, Additional District Judge, Fast Track Court, Dharmapuri,
within a period of four weeks from the date of receipt of a copy of this
order and the Respondent is entitled to take appropriate steps in a
manner known to law to withdraw the amount.”

71 A Division Bench of the Allahabad High Court in the case of

Commissioner of Income-tax vs. Oriental Insurance Co. Ltd. reported in
[2012] 27 taxmann.com 28 (All.) held as under:

“35. Most of the rulings cited by learned counsel for the revenue relates
to interest paid on the delayed payment of compensation awarded
under Land Acquisition Act. The award under Land Acquisition Act and
the award under Motor Vehicle Act cannot be equated for the simple
reason that in land acquisition cases, the payment is made regarding
the price of the land and on such price, the provisions of Capital Gain
Tax are attracted, while in the motor accidents claims, the payment is
made to the legal representatives of the deceased for loss of life of their
bread earner. In most of the cases under motor vehicle accidents claims,
the recipients of awards are poor and illiterate persons who even do not
come within the ambit of Income Tax Act. The amount of compensation
under Motor Vehicle Act, also do not come within the definition of
"income". Therefore, the analogy of compensation under land
acquisition cannot be applied to the motor vehicle accidents claims.

36. The word "interest" as defined under Section 2(28A) has to be

construed strictly. We may refer to Polestar Electronic (Pvt.) Ltd. Vs.
Addl. CST (1978) 41 STC 409, in which hon'ble the Apex Court has
held as under:-

"if there is one principle of interpretation more well settled than

any other, it is that statutory enactment must ordinarily be
construed according to the plain natural meaning of its language
and that no words should be added, altered or modified unless it
is plainly necessary to do so in order to prevent a provision from
being unintelligible, absurd, unreasonable, unworkable or totally
irreconcilable with the rest of the statute."

37. The necessary ingredients of such interest are that it should be in

respect of any money borrowed or debt incurred. The award under the
Motor Vehicle Act is neither the money borrowed by the insurance
company nor the debt incurred upon the insurance company. As far as

Page 46 of 51
C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

the word "claim" is concerned, it should also be regarding a deposit or

other similar right or obligation. The definition of Section 2(28A) of the
Income Tax Act again repeats the words "monies borrowed or debt
incurred" which clearly shows the intention of the legislature is that if
the assessee has received any interest in respect of monies borrowed or
debt incurred including a deposit, claim or other similar right or
obligation, or any service fee or other charge in respect of monies
borrowed or debt incurred has been received then certainly it shall
come within the definition of interest.

38. The word "claim" used in the definition may relates to claims under
contractual liability but certainly do not cover the claims under the
statutory liability. The claim under the Motor Vehicle Act regarding
compensation for death or injury is a statutory liability.

39. Insertion of clause (ix) to Section 194A(3) by the Finance Act 2003
with effect from 1.6.2003 also goes to show that prior to 1.6.2003, the
legislature had no intention to charge any tax on the interest received
as compensation under the Motor Vehicle Act. Even under the amended
Act, interest received in excess of Rs.50,000/- has been subjected to tax
liability. Certainly such interest exceeding Rs.50,000/- has further to be
split amongst all the claimants and has to be spread over for each of the
assessment years. Accordingly there appears to be no justification to
cast liability to deduct the tax at source on the amount of interest paid
on compensation under Motor Vehicle Act prior to 1.6.2003.

40. Further more the definition as provided under Section 194A(1) is

also relevant which provides that if any person is responsible for paying
to a resident any income by way of interest on securities, shall at the
time of credit of such income to the account of the payee deduct
income tax thereon at the rates in force.

41. To our opinion, the award of compensation under motor accidents

claims cannot be regarded as income. The award is in the form of
compensation to the legal heirs for the loss of life of their bread earner.
Hence the interest on such award also cannot be termed as income to
the legal heirs of the deceased or the victim himself.

42. Learned Commissioner of Income Tax (Appeals)-I, Agra in his order

dated 28.3.2003 has discussed most of the cases relating to interest on
land acquisition cases which have also been cited by learned counsel for
the revenue before us. But as mentioned above, the award under land
acquisition can not be equated in any way with the award under motor
accidents claims.

43. The award under the Motor Vehicle Act is like a decree of the court.
It do not come within the definition of income as mentioned in Section
194A(1) read with Section 2(28A) of the Income Tax Act. Proceedings

Page 47 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

regarding claim under Motor Vehicle Act are in the nature of a

garnishee proceedings under which the MACT has a right to attach the
judgment debt payable by the insurance company. Even in the MAC
award, there is no direction of any court that before paying the award,
the insurance company is required to deduct the tax at source. In view
of All India Reporter Ltd. Vs. Ramchandra D. Datar (supra), if no
provision has been made in the decree for deduction of tax, before
paying that debt, the insurance company cannot deduct the tax at
source from the amount payable to the legal heirs of the deceased.

44. In Commissioner of Income Tax Vs. Chiranji Lal Multani Mal Rai
Bahadur (P.) Ltd. (supra), Ghaziabad Development Authority Vs. Dr.
N.K. Gupta (supra), Commissioner of Income-tax Vs. H.P. Housing
Board (supra), Commissioner of Income-tax Vs. Sahib Chits (Delhi)
(Pvt.) Ltd. (supra), it has been clearly held that if interest is awarded by
the court for loss suffered on account of deprivation of property or paid
for breach of contract by means of damages or were not paid in respect
of any debt incurred or money borrowed, shall not attract the
provisions of Section 2(28A) read with Section 194A(1) of the Income
Tax Act.”

72 In the last, we take notice of a very recent pronouncement of the

Bombay High Court in the case of Shri Rupesh Rashmikant Shah vs.
Union of India and others [Writ Petition No.2902 of 2016 decided on 8 th
August 2019], wherein the following has been held:

“57. We, therefore, hold that the interest awarded in the motor accident
claim cases from the date of the Claim Petition till the passing of the
award or in case of Appeal, till the judgment of the High Court in such
Appeal, would not be exigible to tax, not being an income. This position
would not change on account of clause (b) of section 145A of the Act as
it stood at the relevant time amended by Finance Act, 2009 which
provision now finds place in sub-section (1) of section 145B of the Act.
Neither clause (b) of section 145A, as it stood at the relevant time, nor
clause (viii) of sub-section (2) of section 56 of the Act make the interest
chargeable to tax whether such interest is income of the recipient or
not. Section 194A of the Act is only a provision for deduction of tax at
source. Any provision for deduction of tax at source in the said section
would not govern the taxability of the receipt. The question of
deduction of tax at source would arise only if the payment is in the
nature of income of the payee.

58. We are not oblivion to erstwhile clause (ix) of sub-section (3) of

section 194A or the newly amended clauses (ix) and (ixa) thereof

Page 48 of 51
C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

substituting original clause (ix) w.e.f. 1.6.2015 by Finance Act, 2015.

Subsection (1) of section 194A provides for deduction of tax at source
upon payment of any income by way of interest. Sub-section (3) of
section 194A contains exclusion clauses from the purview of sub-section
(1). Clause (ix) contained in sub- section (3) prior to amendment
pertained to income credited or paid by way of interest on the
compensation amount awarded by the Motor Accident Claims Tribunal
where such amount did not exceed Rs.50,000/-. In substitution of this
provision, clause (ix) now provides that the provision of sub-section (1)
will not apply to such income credited by way of interest on the
compensation awarded by the Motor Accident Claims Tribunal. Clause
(ixa) virtually retains the original provision of unamended clause (ix).
The learned ASG would, therefore, contend that by virtue of these
provisions, requirement of deducting tax at source on interest income
would not arise only if the same does not exceed Rs.50,000/- in a
financial year or where such income is merely credited. In other words,
at the time of payment of interest, the provision for deduction of tax at
source would kick in.

59. So far as the plain meaning of section 194A(1) read with erstwhile
clause (ix) and substituted clauses (ix) and (ixa) of sub- section (3) is
concerned, there can be no doubt or dispute. However, the
fundamental question is does section 194A make the interest income
chargeable to tax if it otherwise is not. The answer has to be in the
negative. The provision for deduction of tax at source is not a charging
provision. It only makes deduction of tax at source on payment of same,
which, in the hands of payee, is income. If the payee has no liability to
pay such income, the liability to deduct tax at source in the hands of
payer cannot be fastened. In other words, the provision of deducting
tax at source cannot govern the taxability of the amount which is being
paid.

60. In the decision of the Gujarat High Court in the case of Hansaguri
Prafulchandra (supra), the Court had no occasion to decide the
taxability of interest on compensation or enhanced compensation of
motor accident cases. This was also the position in the case of decision
of this Court in the Gauri Deepak Patel & ors. (supra).

61. We may clarify that these observations and conclusions would apply
to interest on compensation or enhanced compensation awarded by the
Motor Accident Claims Tribunal or High Court from the date of the
Claim Petition till passing of the award or the judgment. Further
interest which may be paid for delay in depositing the awarded
amount, would not form part of the compensation and, therefore,
would fall in the bracket of interest income and would be exigible to tax
under the normal provisions.”

Page 49 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

73 The upshot of the aforesaid discussion is that the compensation

received under the Motor Vehicles Act is either on account of loss of
earning capacity on account of death or injury or on account of pain and
suffering and such receipt is not by way of earning or profit. The award
of compensation is on the principle of restitution to place the claimant in
the same position in which he would have been as the loss of life or
injury would not have been suffered.

74 Our final conclusion may be summarized as under:

[a] The interest awarded by the Motor Accident Claim Tribunal

u/s 171 of the Motor Vehicles Act 1988 is not taxable under the
Income Tax Act, 1961.

[b] The interest awarded in the motor accident claim cases

from the date of the Claim Petition till the passing of the award, or
in the case of Appeal, till the judgment of the High Court in such
appeal, would not be exigible to tax, not being an income. This
position would not change on account of clause (b) of Section
145A of the Act as it stood at the relevant time amended by
Finance Act, 2009, which provision now finds place in sub-section
(1) of Section 145B of the Act. Neither clause (b) of Section 145A,
as it stood at the relevant time, nor clause (viii) of sub-section (2)
of Section 56 of the Act make the interest chargeable to tax,
whether such interest is income of the recipient or not. Section
194A of the Act is only a provision for deduction of tax at source.
Any provision for deduction of tax at source in the said section
would not govern the taxability of the receipt. The question of
deduction of tax at source would arise only if the payment is in
the nature of income of the payee.

Page 50 of 51
 C/SCA/4800/2021 JUDGMENT DATED: 05/04/2022

[c] The Insurance Companies or the owners of the motor vehicles

depositing the requisite amount in due compliance with the
awards of the Motor Accident Claims Tribunals shall deposit the
full amount with the Tribunal and shall not deduct tax u/s 194A
of the Income Tax Act on the interest awarded by the Motor
Accident Claims Tribunal.

75 We may clarify that the aforesaid observations and conclusions

would apply to interest granted on compensation or enhanced
compensation awarded by the Motor Accident Claims Tribunal or the
High Court from the date of the Claim Petition till the passing of the
award or the judgment.

76 Further, the interest that may be paid for the delay in depositing
the awarded amount, would not form part of the compensation and,
therefore, would fall in the bracket of interest income and would be
exigible to tax under the normal provisions.

77 The matter shall now be notified along with the other allied
matters for further hearing on other factual issues arising in the present
matter.

(J. B. PARDIWALA, J)

(NISHA M. THAKORE,J)
CHANDRESH

Page 51 of 51