SupremeToday Landscape Ad
Back
Next
Headnote Court Copy Facts Arguments Court observation Judicial Analysis Case Map Category Hierarchy Table of Content
Listen Article Pause Article
judgment-img

2021 Supreme(SC) 1208

SUPREME COURT OF INDIA
R. SUBHASH REDDY, HRISHIKESH ROY, JJ.
Sumathi and Others – Appellants
Versus
M/s. National Insurance Company Ltd. and Another – Respondents
Civil Appeal No. 7729 of 2021 [Arising Out of S.L.P. (C) No. 9717 of 2019]
Decided On : 15-12-2021

Important Points

The Supreme Court held that compensation should be calculated using the multiplier system established in Sarla Verma. A 'split multiplier' cannot be applied without recording specific reasons; the limited remaining service of a deceased employee does not constitute a special reason to deviate from the standard multiplier system.

Subject

Motor Vehicles - Compensation Claim

Act Referred

Headnote

(A) Motor Vehicles Act, 1988 - Section 173 - Compensation - Compensation awarded by Tribunal of Rs. 40,76,496/- was reduced to Rs. 25,25,000/- by High Court applying split multiplier without specific reasons - Court emphasized that split multiplier should not be used absent special reasons and reaffirmed use of multiplier as per Sarla Verma case principles - High Court's judgment set aside and Tribunal's award restored. (Paras 5, 9, 10)

Legal Category Hierarchy

  • tort
    • motor vehicle accident
      • compensation
        • calculation of dependency (Para 2, 4, 5, 7, 9, 10)
  • practice and procedure
    • appeals
      • civil appeal (Para 2, 11)

Advocates:
Advocate Appeared:
For the Appellants : B. Raghunath, N.C. Kavitha, Vijay Kumar
For the Respondents: K.K. Bhat, Ranjan Kumar Pandey

Table of Contents

1. Motor accident claim — Death of government servant — Compensation assessment under Motor Vehicles Act, 1988. (Para 2 , 3 , 4 )

2. Application of split multiplier versus standard multiplier for calculating compensation for a government servant with limited remaining service. (Para 7 )

3. High Court erred by applying split multiplier without recording specific reasons, contrary to established precedents regarding compensation calculation. (Para 9 , 10 )

4. Compensation must be calculated using the standard multiplier; split multiplier is impermissible unless specific reasons are recorded. (Para 10 )

5. Appeal allowed — High Court judgment set aside — Tribunal award restored. (Para 11 )

6. When can a split multiplier be applied for calculating compensation in motor accident claims?

A split multiplier cannot be applied in the normal course of calculating compensation. It can only be used if the court records specific reasons for departing from the standard multiplier system established in the Sarla Verma case. (Para 10 )

7. Does the limited remaining service of a government employee justify the use of a split multiplier?

No, the fact that a deceased government servant had a limited amount of leftover service before retirement cannot be construed as a special reason for applying a split multiplier. (Para 10 )

8. What is the standard approach for calculating compensation in motor accident claims?

In the normal course, compensation is to be assessed by applying the multiplier as indicated in the judgment of Smt. Sarla Verma and Others vs. Delhi Transport Corporation and Another. (Para 10 )

ORDER :

1. Leave granted.

2. This civil appeal is filed by legal heirs of the deceased-Late Balasubramanian, aggrieved by the judgment dated 8th November, 2017 passed by the Madurai Bench of Madras High Court in CMA (MD) No. 1135 of 2015. By the aforesaid judgment, the High Court has allowed the Misc. Appeal filed by the Insurance Company under Section 173 of the MOTOR VEHICLES ACT , 1988, reducing the compensation from Rs. 40,16,496/- to Rs. 25,25,000/-.

3. The appellants herein, are legal heirs of the deceased and have filed a claim petition bearing MACOP No. 76 of 2011 before the Motor Accident Claims Tribunal, Subordinate Court, Paramakudi, claiming compensation of Rs. 40,00,000/-. In the claim petition, it was the case of the appellants that the deceased, on the date of accident, was going to attend a teachers’ meeting at Erode and was travelling in Mahindra Van bearing no. TN-65-2979, which belonged to the first respondent. The van in which he was travelling, met with an accident by dashing against a lorry. In the said accident, the deceased-Late Balasubramanian sustained injuries and subsequently, he succumbed to injuries in the hospital.

4. The Motor Accident Claims Tribunal has held that the accident occurred due to negligent driving of driver of the van. As the deceased was Govt. Servant and had died at the age of 54 years, while drawing a salary of Rs. 45,643/- per month (as per the salary certificate at Annexure “C-6”) after deducting one-third amount towards personal expenses and by applying multiplier of 11, awarded compensation of Rs. 40,16,496/- towards loss of dependency, Rs. 20,000/- towards loss of consortium, Rs. 30,000/- towards loss of love and affection and Rs. 10,000/- towards funeral expenses. Totally, the tribunal has awarded Rs. 40,76,496/- as compensation with interest @ 7.5% per annum.

5. The first respondent-Insurance Company has filed civil miscellaneous appeal, aggrieved by the judgment of the Tribunal, before the High Court. The High Court while referring to earlier judgments and also judgments of this Court in the case of Smt. Sarla Verma and Others vs. Delhi Transport Corporation and Another , (2009) 6 SCC 121 and in the case of Puttamma and Others vs. K.L. Narayana Reddy and Another , (2013) 15 SCC 45, has held that compensation is to be awarded by applying split multiplier. In the impugned judgment, the High Court has assessed the compensation by taking the total salary of the deceased for leftover service of four years and 50% of salary for remaining period, and awarded a total compensation of Rs. 24,64,722/- (rounded off to Rs. 24,65,000/-) instead of Rs. 40,16,496/- awarded by the Tribunal. By further awarding an amount of Rs. 60,000/- under other heads, the High Court has held that the appellants-claimants are entitled for total compensation of Rs. 25,25,000/- together with interest @ 7.5% per annum.

6. We have heard learned counsel for the appellants-claimants and learned counsel for the respondents.

7. Mainly, it is contended by learned counsel for the appellants that without assigning any specific reason, the High Court has applied the split multiplier, contrary to the judgment of this Court in the case of Puttamma and Others vs. K.L. Narayana Reddy and Another . It is submitted that in normal cases, the appellants are entitled for compensation by applying the multiplier as per the judgment of this Court in the case of Smt. Sarla Verma and Others vs. Delhi Transport Corporation and Another . It is contended that without recording any specific reason, the High Court has applied split multiplier for the purpose of assessing the compensation. On the other hand, it is submitted by learned counsel for the respondents that as on the date of accident, the deceased was about 54 years and he was having leftover service of only four years. It is submitted that after retirement, as the deceased was to get pension only to the extent of 50% of the salary, as such, the High Court has correctly applied

1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
whatsapp-icon Back to top