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Motor Vehicles Act, 1988 – s.166 – Fatal accident – Deceased aged 53 years of age and working as a Senior Assistant in the State Electricity Board – Claim petition by his three sons and paternal grand-mother – Tribunal applied a multiplier of 11 and awarded total compensation of Rs.14,27,496/- with interest @ 9% p.a. – High Court, however, reduced the compensation by adopting a split multiplier of 6 – On appeal, held: High Court introduced the concept of split multiplier and departed from the multiplier used by the Tribunal without disclosing any reason therefor – It also did not consider the clear and corroborative evidence about the prospect of future increment of the deceased – Judgment of High Court deserves to be set aside for it was perverse and clearly contrary to the evidence on record – Respondents directed to pay compensation of Rs.18,00,000/- with the rate of interest as granted by the Tribunal. PW1’s father was crossing the road, when a Maruti Van (owned by the first respondent) came at a high speed and dashed against him, causing severe injuries to him which ultimately led to his death. The deceased was 53 years of age and was survived by his wife and three sons, the appellants. They filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 claiming Rs.20,00,000/- as compensation. The Motor Accident Claims Tribunal (MACT) found that the death of PW1’s father was due to the rash and negligent driving of the van driver (the second respondent). The deceased was working as Senior Assistant in Karnataka Electricity Board (KEB) and his last drawn gross monthly salary was Rs.15,642/- i.e. Rs.1,87,704/- annually. The Tribunal applied a multiplier of 11 and awarded total compensation of Rs.14,27,496/- along with interest of 9% p.a. The High Court reduced the compensation to Rs.11,82,000/- by adopting a split multiplier of 6. In the instant appeals, the appellants contended that while awarding compensation, the High Court erred in not considering the future prospects of the deceased and the revision in his salary and that it further erred in adopting a split multiplier. =Allowing the appeals, the Court HELD: 1.1. The law regarding addition in income for future prospects has been clearly laid down in Sarla Varma case. In the said case, the Court held that there should be no addition to income for future prospects where the age of the deceased is more than 50 years. The 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. The rule of thumb evolved in Sarla Verma is to be applied to those cases where there is no concrete evidence on record of definite rise in income due to future prospects. The said rule was based on assumption and to avoid uncertainties and inconsistencies in the interpretation of different courts, and to overcome the same. [Paras 8, 9] [1067-C; 1068-A-C] 1.2. In the present case there is clear and incontrovertible evidence on record that the deceased was entitled and in fact bound to get a rise in income in the future, a fact which was corroborated by evidence on record. Thus, the present case comes within the `exceptional circumstances’ and not within the purview of rule of thumb laid down by the Sarla Verma judgment. Hence, even though the deceased was above 50 years of age, he was entitled to increase in income due to future prospects. [Para 10] [1068-D-E] Sarla Varma (Smt.) & Others v. Delhi Transport Corporation & Another (2009) 6 SCC 121 – referred to. 2. The evidence of PW.1 is that there are four claimants, three of them are the sons of the deceased and the other claimant is paternal grand-mother. Therein, he stated that the deceased was the only bread earner of the family. It was stated by PW.1 that if his father, the deceased, would have been alive he could have got promotion and could have received a salary of Rs.20,000/- per month. PW.3, a Senior Assistant in KEB, in his evidence also stated that the deceased was 52 years of age at the time of his death and he was having six years of service left; that his annual increment was Rs.350/- and that in the year 2003 (which would have been year of retirement), the basic pay of the deceased would have been around Rs.16,000/- and in all he would have obtained gross salary of Rs.20,000/- per month. PW.3 deposed that as per the Board Agreement for every five years their pay revision is compulsory. Both the witnesses were cross- examined before the Tribunal but the evidence leading to pay revision was not assailed. Therefore, the consistent evidence before the Tribunal was that if the deceased would have been alive he would have reached the gross salary of Rs.20,000/- per month. [Paras 11 to 13] [1068-F-H; 1069-A] 3. In view of this evidence, the Tribunal should have considered the prospect of future income while computing compensation but the Tribunal has not done that. 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 also did not consider 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 II Column in the II Schedule in the Motor Vehicles Act, and the Tribunal had 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. Thus, 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. [Paras 14, 15] [1069-C-G] 4. The income of the deceased will be taken to be Rs.20,000/- p.m. which amounts to Rs.2,40,000/- p.a. After deduction of 1/3rd amount for personal expenses, the loss of notional income will be Rs.1,60,000/-. The multiplier of 11 will be applied, from which the loss of dependency will amount to Rs.17,60,000/-. Besides, award Rs.10,000/- for funeral and transport expenses, Rs.6,000/- for medical expenses prior to death and Rs.25,000/- for loss of love and affection is also awarded. Thus, the total compensation awarded amounts to Rs.18,01,000/- which is round off to Rs.18,00,000/-. The amount of compensation would thus be Rs.18,00,000/- with the rate of interest as granted by the Tribunal. [Paras 16, 17] [1069- H; 1070-A-C] Case Law Reference: (2009) 6 SCC 121 referred to Para 8 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1923-1924 of 2011. From the Judgment & Order dated 12.01.2009 of the High Court of Karnataka at Bangalore in MFA No. 6476/2002(MV) C/w M.F.A. No. 5596 of 2002. G.V. Chandrashekar for the Appellants…

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REPORTABLE


 IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NO.1923-1924 OF 2011

 (Arising out of SLP (Civil) No.16406-16407 of 2010)

Sri. K.R. Madhusudhan & Ors. ...Appellant(s)

 Versus 

The Administrative Officer & Anr. ...Respondent(s)

 J U D G M E N T

GANGULY, J.

1. Delay condoned.

2. Leave granted.

3. On 4.10.1998, at about 8.55 a.m., V. 

 Rajagopalaiah was crossing the road near Ashraya 

 Hotel, B.M. Road, Channapatna, when a Maruti Van 

 (owned by the first respondent) bearing 

 registration No. KA-05-A-2535 came at a high 

 speed and dashed against the deceased, causing 

 1

 severe injuries. He was taken to hospital, but 

 he succumbed to his injuries.

4. The deceased was of 53 years of age and was 

 survived by his wife and three sons, the present 

 appellants. They filed a claim petition under 

 Section 166 of the Motor Vehicles Act, 1988 

 claiming Rs.20,00,000/- as compensation. It was 

 contested by the respondents.

5. Motor Accident Claims Tribunal (hereinafter 

 "MACT") found that the death of V. Rajagopalaiah 

 was due to the rash and negligent driving of the 

 van driver (the second respondent). The deceased 

 was working as Senior Assistant in Karnataka 

 Electricity Board (hereinafter "KEB") and his 

 last drawn gross monthly salary was Rs.15,642/- 

 i.e. Rs.1,87,704/- annually. 1/3rd was deducted 

 for personal expenses, after which the amount 

 came to Rs.1,25,136/-. As deceased was 53 years 

 of age, a multiplier of 11 was applied. The 

 Tribunal also awarded funeral and transport 

 expenses amounting to Rs.10,000/-, medical 

 2

 expenses prior to death was Rs.6,000 and 

 compensation for loss and affection at 

 Rs.25,000/-. Accordingly, total compensation 

 awarded was Rs.14,27,496/- along with interest 

 of 9% p.a.

6. The appellants and the respondents both appealed 

 against the award of the Tribunal to the High 

 Court of Karnataka. The appellants appeared for 

 enhancement and the respondents for reduction of 

 the amount awarded. The High Court, in its 

 impugned judgment, reduced the compensation 

 awarded by the Tribunal to the appellants to 

 Rs.11,82,000/-. The relevant portion of High 

 Court order reads as follows:

 "The deceased was working as Senior 

 Assistant in KEB getting a salary of 

 Rs.15,642/-. After effecting 

 deductions towards income tax, the net 

 salary of the deceased would be 

 Rs.14,000/-. The mother and sons of 

 the deceased have filed claim 

 petition. 1/5 is to be deducted 

 towards personal expenses. Rs.11,200/- 

 would enure to the benefit of the 

 dependants. The deceased was aged 

 about 52 years. The deceased would 

 have retired by 58 years. After 

 superannuation, the deceased would get 

 3

 pensionary income in a sum of 

 Rs.6000/-. 1/5 is to be deducted 

 towards personal expenses. Rs.4800/- 

 would enure to the benefit of the 

 dependants. Split multiplier would 

 apply. After superannuation, 

 multiplier 6 would apply. Therefore, 

 the total loss of dependency before 

 superannuation would be Rs.8,06,400/- 

 (Rs.11200 (income) X 12 (months) X 6 

 (multiplier). The total loss of 

 dependency from the pensionary income 

 would be Rs.3,45,600/- (Rs.4800/- 

 (income) X 12 (months) X 6 

 (multiplier). The total loss of 

 dependency would be Rs.11,52,000/- The 

 petitioners are entitled for a sum of 

 Rs.25,000/- towards loss of expectancy 

 and Rs.10,000/- towards funeral 

 expenses. In all the petitioners are 

 entitled for a total sum of 

 Rs.11,82,000/- as against 

 Rs.14,27,496/- awarded by the 

 Tribunal. The petitioners are entitled 

 for interest at 6% p.a."

7. Assailing the same, the appellants contend that 

 the future prospects of the deceased and 

 revision in salary were not taken into 

 consideration by the High Court and a split 

 multiplier should not have been adopted.

8. The law regarding addition in income for future 

 prospects has been clearly laid down in Sarla 

 4

Varma (Smt.) & Others v. Delhi Transport 

Corporation & Another [(2009) 6 SCC 121] and the 

relevant portion reads as follows:

 "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 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 

 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."

 5

9. In the Sarla Verma (supra) 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. We are of the opinion that the 

 rule of thumb evolved in Sarla Verma (supra) 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.

10. The present case stands on different factual 

 basis where there is clear and incontrovertible 

 evidence on record that the deceased was 

 entitled and in fact bound to get a rise in 

 6

 income in the future, a fact which was 

 corroborated by evidence on record. Thus, we are 

 of the view that the present case comes within 

 the `exceptional circumstances' and not within 

 the purview of rule of thumb laid down by the 

 Sarla Verma (supra) judgment. Hence, even though 

 the deceased was above 50 years of age, he shall 

 be entitled to increase in income due to future 

 prospects.

11. We base our conclusion on our findings from the 

 records of the case. The evidence of PW.1, the 

 son of the deceased, is that there are four 

 claimants, three of them are the sons of the 

 deceased and the other claimant is paternal 

 grand-mother. Therein, he stated that the 

 deceased was the only bread earner of the 

 family. It was stated by PW.1 that if his 

 father, the deceased, would have been alive he 

 could have got promotion and could have received 

 the salary of Rs.20,000/- per month.

 7

12. PW.3, who was the Senior Assistant in KEB, in 

 his evidence also stated that the deceased was 

 52 years of age at the time of his death and he 

 was having six years of service left. The annual 

 increment is Rs.350/-. In the year 2003 (which 

 would have been year of retirement), the basic 

 pay of the deceased would have been around 

 Rs.16,000/- and in all he would have obtained 

 gross salary of Rs.20,000/- per month. PW.3 

 deposed that as per the Board Agreement for 

 every five years their pay revision is 

 compulsory. Both the witnesses were cross-

 examined before the Tribunal but the evidence 

 leading to pay revision was not assailed.

13. Therefore, the consistent evidence before the 

 Tribunal was that if the deceased would have 

 been alive he would have reached the gross 

 salary of Rs.20,000/- per month.

14. In view of this evidence the Tribunal should 

 have considered the prospect of future income 

 while computing compensation but the Tribunal 

 8

 has not done that. 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 

 therefore. 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 II Column in the II 

 Schedule in 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 

 9

 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.

16. The income of the deceased will be taken to be 

 Rs.20,000/- p.m. which amounts to Rs.2,40,000/- 

 p.a. After deduction of 1/3rd amount for personal 

 expenses, the loss of notional income will be 

 Rs.1,60,000/-. The multiplier of 11 will be 

 applied, from which the loss of dependency will 

 amount to Rs.17,60,000/-. We also award 

 Rs.10,000/- for funeral and transport expenses, 

 Rs.6,000/- for medical expenses prior to death 

 and Rs.25,000/- for loss of love and affection. 

 Thus, the total compensation awarded amounts to 

 Rs.18,01,000/- which we round off to 

 Rs.18,00,000/-.

17. The amount of compensation would thus be 

 Rs.18,00,000/- with the rate of interest as 

 granted by the Tribunal. The amount is to be 

 deposited with the Tribunal within six weeks 

 1

 from date after deducting any amount, if already 

 deposited.

18. The appeals are, thus, allowed. No costs.

 .....................J.

 (G.S. SINGHVI)

 .....................J.

 (ASOK KUMAR GANGULY)

New Delhi 

February 18, 2011 1

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