2011 (3) SCC 566
IN THE SUPREME COURT OF INDIA
G.S. SINGHVI, ASOK KUMAR GANGULY
P.S. Somanathan and Ors.-Appellant(s)
Versus
District Insurance Officer and Anr. - Respondent(s)
CIVIL APPEAL NO.1891 OF 2011
Decided on : February 17, 2011
(2009) 6 SCC 121-Followed.
(1979) 118 ITR 507 (SC); AIR 1994 SC 1631; (1996) 4 SCC 362; AIR 2005 SC 2985; (2009) 3 SCC 705; (2009) 4 SCC 513, (2005) 10 SCC 720-Relied
Key Points: - The judgment discusses determining compensation by the multiplier method, including how to fix income and deductions for personal expenses. (!) (!) - It addresses who can be treated as legal representative (mother as real representative vs daughter’s claim) and how multiplier should be applied in determining loss of dependency. (!) (!) (!) - It outlines the three-step process for calculating compensation: multiplicand (income minus personal expenses), multiplier (based on age and active career), and actual calculation (loss of dependency). (!) (!) (!) (!) - It emphasizes uniformity and standardization in awards based on established guidelines (Sarla Verma framework) for death compensation under MV Act. (!) (!) (!) (!) - It notes that the Court restored the MACT award and invalidated the High Court’s reduction of multiplier, emphasizing adherence to Sarla Verma principles. (!) (!)
JUDGMENT:
GANGULY, J.
1. Delay condoned. Leave granted.
2. One Suresh Chandra Babu, was walking along the side of Alappuzha-Kollam National Highway near Punnapra junction on 25.07.1994, when a lorry (bearing registration No. KL 4/6802) which was being driven rashly suddenly hit him. As a result of which he sustained serious injuries and died on the spot. The lorry which was insured with the first respondent was owned by the second respondent. The appellants (claimants) who are the family members of the deceased filed a claim petition before the Motor Accident Claims Tribunal (MACT), claiming Rs.1,75,000/- as compensation. The same was contested by the first and second respondents.
3. Before the MACT, the following issues were framed:
"i. Whether the accident was due to the rash and negligent driving of the second respondent herein?
ii. Whether the petitioners were entitled to get any compensation and if so, what was the quantum and who all were liable?"
4. Based on the evidence on record, MACT concluded that the accident had occurred in view of the rash and negligent driving of the second respondent and it awarded a total compensation of Rs.1,71,600/- together with interest at the rate of 12% p.a. and cost of Rs.1,500/-. It calculated the same as follows:
"...Suresh Chandra Babu aged 33 years died due to injuries sustained in the accident. PW1 swears that at the time of accident Suresh Chandra Babu was working as an operator in Motherland Industries, Punnapra and was getting Rs.4,500/- p.m. In Ext. A1 FIR, it is stated that Suresh Chandra Babu was working as a mechanic operator in Motherland Industries Company. PW1 swears that Suresh Chandra Babu was unmarried and he was looking after the affairs of the family. Considering the nature of the work done by deceased Suresh Chandra Babu, his monthly income can be assessed as Rs.1,200/- for the purpose of calculating just compensation. After deducting his personal expenses he would be contributing Rs.800/- p.m. to his mother- the first petitioner. In this manner, the annual dependency of the first petitioner of the deceased comes to Rs.9,600/-. In this case 16 can be determined as suitable multiplier. Therefore, the amount of compensation on account of loss of dependency comes to Rs.1,53,000/-. Rs.15,000/- can be awarded towards compensation for pain and suffering. Rs.1,900/- can be awarded towards transportation charges and Rs.2,000/- can be awarded towards funeral expenses. Thus, in total, the petitioner is entitled to get Rs.1,71,600/- as compensation."
5. The first respondent appealed against the judgment of the MACT before the High Court of Kerala at Ernakulam. The High Court, vide its impugned judgment, reduced the compensation to Rs.85,000/- along with interest at the rate of 12% p.a., the relevant portion of High Court judgment reads as follows:
"Heard both sides. The learned Government Pleader submits that father was aged about 70 years even at the time of the accident and therefore the Tribunal had committed an error in fixing the multiplier at 16 whereas it has to only apply a multiplier of 5. In the award, the age of first claimant is not shown but the daughter of the first claimant namely Leela has filed an affidavit before this Court for getting impleaded as I.A. 1407/06 where her age is shown as 61 years. So it is clear that she would be 49 years at the time of the accident and therefore even if the minimum age that can be fixed for the mother will be 67 years and not less. The mother is the real legal representative and others cannot claim the status of legal representative and therefore the appropriate multiplier to be used in this case is only 5.
It is true that the Tribunal has taken his income at Rs.1,200/- per month whereas claimants claimed that the deceased was getting an amount of Rs.1,500/- as his income. We fix it at Rs.1,500/- deduct 1/3rd for personal expenses and applying a multiplier of 5 the loss of dependency compensation would come to Rs.60,000/-. The
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