IMPORTANT POINT
There being no statutory formula for compensation in motor accident; grey areas are inevitable. Courts therefore have evolved guidelines giving formula. As compensation depends on evidence available, the formulas are suggested with caveat like “ordinarily”, “normally”, “exceptional circumstances”, etc.

JUDGMENT

KURIAN, J.:

Leave granted.

2. The never ending dispute on computation of compensation under the Motor Vehicles Act, 1988 (hereinafter referred to as ‘the Act’), is the subject matter of this appeal as well.

3. In the absence of any statutory and a straight jacket 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.

4. In the case before us, the appellants are the claimants before the Motor Accidents Claims Tribunal, Karkardooma, Delhi in M.A.C.T. No. 736/2008. They are the parents of late Satendra Kumar Jain, aged 30 years, who died in a motor accident on 12.07.2008. He was self-employed as Pandit. He was a bachelor. Hence, the claim by the parents.

5. The appellants claimed an amount of Rs.95,50,000.00. The Claims Tribunal awarded a total compensation of Rs.6,59,000.00 including loss of dependency to the tune of Rs.6,24,000.00 with interest @ 7.5 per cent from the date of institution of the petition. Dissatisfied, appellants approached the High Court of Delhi in MAC APP. 687/2011 leading to the impugned judgment. The High Court enhanced the compensation and fixed it at Rs.12,61,800.00 with interest as ordered by the Claims Tribunal.

6. The High Court fixed the monthly income to Rs.12,000.00 and added 30% towards future prospects relying on Santosh Devi v. National Insurance Company Limited, (2012) 6 SCC 421. 50 per cent was deducted towards personal expenditure and a multiplier of 13 was applied. Still not satisfied, the claimants are before this Court.

7. On 08.02.2013, this Court issued notice … “confined to the issues on application of correct multiplier and reduction of the amount”. In other words, the Court intended to consider the appeal limited to the question of application of multiplier and deduction on account of personal and living expenses.

8. On the issue of deduction towards personal and living expenses in Sarla Verma (Smt.) and others v. Delhi Transport Corporation and another, (2009) 6 SCC 121 3 at paragraph-31, it was held that:

“31. … 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.”

9. The deduction ordinarily in the case of a bachelor at 50 % was approved recently by a three-Judge Bench decision in Reshma Kumari and others v. Madan Mohan and another, (2013) 9 SCC 65 holding that the standard fixed in Sarla Verma (supra) on the aspect of deduction for personal and living expenses … “must ordinarily be followed unless a case for departure in the circumstances noted in the preceding paragraph is made out”. Preceding paragraph-41 reads as follows:

“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 hi