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SUPREME COURT OF INDIA
R V Raveendran & Lokeshwar Singh Panta, JJ.
Smt. Sarla Verma & Ors. —Appellants
versus
Delhi Transport Corporation
& Anr. —Respondents
Civil Appeal No. 3483 of 2008
(Arising out of SLP [C] No.8648 of 2007)
Decided on 15.4.2009
(B) Motor Vehicles Act, 1988—Sections 163-A and 166—Death in accident—Compensation—Choice of multiplier—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—Percentage of deduction on account personal and living expenses can vary with reference to number of dependant members in family—Personal living expenses of deceased need not exactly correspond to number of dependants—As an earning member deceased would have spent more on himself than other members of family apart from the fact that he would have incurred expenditure on travelling/transportation and other needs. (Para 25)
In motor accident claims involving death, future prospects of advancement in career or income may be factored into the multiplicand by making an addition to the actual income/salary of the deceased at the time of death (less tax, if applicable). (!) [12000300150009]
A standardized rule of thumb applies: an addition of 50% to the actual salary where the deceased had a permanent job and was below 40 years of age; 30% addition if aged 40-50 years; and no addition if above 50 years. This avoids varying yardsticks or methods. Where the deceased was self-employed or on fixed salary without increments, only actual income is taken, absent exceptional circumstances. [12000300150010]
Actual pay revisions or increments occurring after death (e.g., during pendency of proceedings) cannot be used to inflate the income estimate, as this would unfairly reward delays in litigation and ignore life's imponderables (e.g., possible earlier death, job loss). Courts assess based on evidence available proximate to the accident date. [12000300150022]
In the present case (deceased aged 38 years in permanent job), averaging actual salary (Rs.4,004 pm) with a doubled figure (Rs.8,008 pm) at retirement—equating to a 50% addition yielding Rs.6,006 pm—was approved as conforming to the principle. [12000300150021]
R.V. Raveendran, J.—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.30000/- 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% P.A. 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 the 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 t
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