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M.V. Act – Death of a 19 year old Engineer student – Apex court enhanced compensation to Rs.7,00,000 from Rs. two lakhs = Radhakrishna and another ….Appellants versus Gokul and others ….Respondents = Reported in http://judis.nic.in/supremecourt/filename=40944

M.V. Act – Death of a 19 year old Engineer student – Apex court enhanced compensation

 

English: The supreme court of india. Taken abo...

English: The supreme court of india. Taken about 170 m from the main building outside the perimeter wall (Photo credit: Wikipedia)

 

to Rs.7,00,000  from Rs. two lakhs =

 

 

 

Thus  the  grand  total compensation of the applicants is Rs.1,92,000/- entitled to  get  from Res 1-3 jointly or separately.”

 

The appellants challenged the award  of  the  Tribunal  by  filing  an

 

appeal under Section 173 of the Act but could not persuade  the  High  Court

 

to grant substantial enhancement in  the  amount  of  compensation  and  the

 

appeal was disposed of with a direction to respondent Nos. 1  to  3  to  pay

 

additional compensation of Rs.8,000 with interest at  the  rate  of  6%  per

 

annum. =

 

“So far as the award of compensation  in  case  of  children  is

 

           concerned, Shri Justice Chandrachud has divided  them  into  two

 

           groups, 

 

the first group between the age group of 5 to  10  years

 

           and 

 

the second group between the age group of 10 to 15 years.

 

 In

 

           case of children between the age group  of  5  to  10  years,  a

 

           uniform sum of Rs 50,000 has been held to be payable by  way  of

 

           compensation, 

 

to which the conventional figure of Rs 25,000  has

 

           been added and 

 

as such to  the  heirs  of  the  14  children,  a

 

           consolidated sum of Rs 75,000 each, has been awarded. 

 

So far  as

 

           the children in the age group of 10 to 15 years,  

 

there  are  10

 

           such children who died on the fateful day and having found their

 

           contribution to the family at Rs 12,000 per annum, 

 

11 multiplier

 

           has been applied, particularly, depending upon the  age  of  the

 

           father and 

 

then the conventional compensation of Rs  25,000  has

 

           been added to each case and 

 

consequently, the heirs of  each  of

 

           the  deceased  above  10  years  of  age,  have   been   granted

 

           compensation to the tune of Rs 1,57,000 each.  

 

In  case  of  the

 

           death of an infant, there may  have  been  no  actual  pecuniary

 

           benefit derived by its parents during the child’s lifetime.  

 

But

 

           this will not necessarily bar the parents’ claim and prospective

 

           loss  will  found  a  valid  claim  provided  that  the  parents

 

           establish that they had a reasonable  expectation  of  pecuniary

 

           benefit if the child had lived. 

 

whether there

 

           exists a reasonable expectation of pecuniary advantage is always

 

           a mixed question of fact and  law.  

 

There  are  several  decided

 

           cases on this point, providing the guidelines for  determination

 

           of compensation in such cases but we do not think  it  necessary

 

           for us to advert, as the claimants had not adduced any materials

 

           on the reasonable expectation of pecuniary benefits,  which  the

 

           parents expected. 

 

In case of  a  bright  and  healthy  boy,  his

 

           performances in the school, it would be easier for the authority

 

           to arrive at the compensation amount,  which  may  be  different

 

           from another sickly, unhealthy, rickety child and  bad  student,

 

           but as has been stated earlier, not  an  iota  of  material  was

 

           produced before Shri Justice Chandrachud to enable him to arrive

 

           at a just compensation in such  cases  and,  therefore,  he  has

 

           determined the same on an approximation. 

 

“………. Having considered several  subsequent  decisions  of

 

           this Court, we are of the  view  that  where  the  deceased  was

 

           married, the deduction towards personal and living  expenses  of

 

           the deceased, should be one-third (1/3rd) where  the  number  of

 

           dependent family members is 2 to 3, one-fourth (1/4th) where the

 

           number of dependent family members is  4  to  6,  and  one-fifth

 

           (1/5th) where the number of  dependent  family  members  exceeds

 

           six.

 

 

 

           Where the deceased was a bachelor  and  the  claimants  are  the

 

           parents, the deduction follows a different principle. 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.

 

 

 

           Thus even if the deceased is survived by parents  and  siblings,

 

           only the mother would be considered to be a dependant,  and  50%

 

           would be treated as the personal  and  living  expenses  of  the

 

           bachelor and 50% as the contribution  to  the  family.  

 

However,

 

           where the family of the bachelor is large and dependent  on  the

 

           income of the deceased, as in a case  

 

where  he  has  a  widowed

 

           mother and  large  number  of  younger  non-earning  sisters  or

 

           brothers, his personal and living expenses may be restricted  to

 

           one-third and contribution to the family will be taken  as  two-

 

           third.”

 

 

 

 

 

 “We therefore hold that the multiplier to be used should  be  as

 

           mentioned in Column (4) of the table above (prepared by applying

 

           Susamma Thomas (1994) 2 SCC 176, Trilok Chandra (1996) 4 SCC 362

 

           and Charlie (2005) 10 SCC 720), 

 

which starts with  an  operative

 

           multiplier of 18 (for the age groups of 15 to 20 and  21  to  25

 

           years), 

 

reduced by one unit for every five years, that  is  

 

M-17

 

           for 26 to 30 years, 

 

M-16 for 31 to 35 years, 

 

M-15 for 36  to  40

 

           years, 

 

M-14 for 41 to 45 years, and 

 

M-13 for  46  to  50  years,

 

           

 

then reduced by two units for every five years,  that  is, 

 

 M-11

 

           for 51 to 55 years, 

 

M-9 for 56 to 60 years, 

 

M-7  for  61  to  65  years and 

 

M-5 for 66 to 70 years.”

 

 Thereafter, a conventional amount in the range of Rs 5000 to  Rs

           10,000 may be added as loss of estate.  Where  the  deceased  is

           survived by his widow, another conventional amount in the  range

           of 5000 to 10,000 should be added under  the  head  of  loss  of

           consortium. But no amount is to be awarded  under  the  head  of

           pain, suffering or hardship caused to the  legal  heirs  of  the

           deceased.

 

 

           The funeral expenses, cost of transportation  of  the  body  (if

           incurred) and cost of any  medical  treatment  of  the  deceased

           before death (if incurred) should also be added.”

 

 

 

  In Lata Wadhwa’s case, the accident had  occurred  on  03.03.1989  and

 

this Court awarded  compensation  of  Rs.4,10,000  to  the  parents  of  the

 

deceased children who were students of Classes VI to X.   

 

In  M.S.  Grewal’s

 

case,  the  accident  had  occurred  on  28.5.1995.   This   Court   awarded

 

compensation of  Rs.5,00,000  to  the  parents  of  the  children  who  were

 

students of IV, V  and  VI  classes.   

 

In  Anil  Kumar  Mishra’s  case,  the

 

accident had occurred on 23.6.1993 and the victim of  accident,  who  was  a

 

student of final year Engineering was awarded compensation of Rs.9,06,000.

 

 

 

14.   In  the  present  case,  the  accident  occurred  on  20.1.2003.   The

 

deceased was 19 years old and was a  student  of  Engineering  course.   The

 

Tribunal determined the compensation by  taking  his  annual  income  to  be

 

Rs.15,000 and deducted 1/3rd towards personal  expenses.   In  Arvind  Kumar

 

Mishra’s case, the Bench proceeded on the assumption that  after  completion

 

of the Engineering course,  the  appellant  could  have  been  appointed  as

 

Assistant Engineer and earn Rs.60,000 per annum.   However, keeping in  view

 

the degree of disability, his estimated earning was taken as  Rs.42,000  per

 

annum and accordingly the amount of compensation was awarded.   By  applying

 

the same yardstick and having regard to  the  age  of  the  parents  of  the

 

deceased, i.e., 45 and 42 respectively, we feel that ends  of  justice  will

 

be served by  awarding  a  lump  sum  compensation  of  Rs.7,00,000  to  the

 

appellants.

 

 

 

15.   In the result, the appeal is partly allowed.   The  impugned  judgment

 

is modified and it is declared that the  appellants  shall  be  entitled  to

 

compensation of Rs.7,00,000 with interest at the rate of  6%  per  annum  on

 

the enhanced amount with effect from  the  date  of  filing  petition  under

 

Section 166 of the Act.

 

 

 

16.    Respondent  No.3  is  directed  to  pay  the   amount   of   enhanced

 

compensation and interest  within  a  period  of  three  months  by  getting

 

prepared two demand drafts of equal amount in the names of  appellant  Nos.1

 

and 2.  It will be open to respondent No.3 to recover from respondent  Nos.1

 

and 2 their respective shares of the compensation.

 

NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9858 OF 2013
(Arising out of SLP(C) No. 1056 of 2008)

 
Radhakrishna and another ….Appellants

 

versus

 

Gokul and others ….Respondents

 

 

 

 

 
J U D G M E N T

 

G.S. SINGHVI, J.

 

1. Leave granted.

 

2. Feeling dissatisfied with the meagre enhancement of Rs.8,000 granted
by the Division Bench of the Madhya Pradesh High Court in the amount of
compensation determined by Additional Motor Accident Claims Tribunal,
Barwaha (West), Nimar (for short, ‘the Tribunal’), the appellants have
filed this appeal.
3. Nilesh (son of the appellants) was killed in a road accident, which
occurred on 20.1.2003, when the motorcycle on which he was going along with
his friend Rohit was hit by the truck belonging to respondent No.1.

 

4. The appellants filed a petition under Section 166 of the Motor
Vehicles Act, 1988 (for short, ‘the Act’) for award of compensation to the
tune of Rs.50,60,000. Their claim was founded on the following assertions:
(i) The accident was caused due to rash and negligent driving of
the truck owned by respondent No.1, which was insured with respondent
No.3 – United India Insurance Co.
(ii) At the time of accident, the deceased was 19 years old and he
was a student of degree course in Engineering.
(iii) After completion of study, the deceased was expected to get a
good job as an Engineer and earn substantial salary.

 

5. In the written statement filed by them, the owner and the driver
(respondent Nos. 1 and 2) claimed that the truck was duly insured with
respondent No.3 and the compensation, if any, was payable by respondent
No.3. In a separate statement, respondent No.3 denied its liability by
asserting that the driver of the truck and the motorcyclist did not have
valid driving licences. It was further pleaded that the appellants are not
entitled to compensation because the deceased was travelling as a pillion
rider.

 

6. On the pleadings of the parties, the Tribunal framed the following
issues:
“1. Whether the Resp-2 by driving the truck No. MP-11A/2453 in rash
& negligent manner caused the accident with the motor cycle No. MP 10
D 42/4 driven by Resp-4 coming from opposite direction?

 
2. Whether the pillion rider on the motor cycle, i.e., the son of
applicants Nilesh died due to physical injuries received in the said
accident?

 
3. Whether the truck No. MP/11A/2454 was being driven in violation
of Insurance policy & provision of the M.V. Act at the time of
accident, If yes its effect?

 
4. Whether the motor cycle No. MP 10 D 4214 was being driven in
violation of Insurance policy & provision of M.V. Act? If Yes, its
effect?

 
5. Whether the applicant is entitled to get compensation. If yes,
what amount and from whom?

 
6. Relief and Cost.”

 

 

 
7. After analyzing the evidence produced by the parties, the Tribunal
answered issues No.1 to 4 in favour of the appellants. While dealing with
the issue relating to the quantum of compensation, the Tribunal referred to
the statement of appellant No.1 Radhakrishna Soni and the documents
produced by him and observed:
“The age of Nilesh is stated to be 19 years by the applicant at the
time of accident which is supported by school record. As the deceased
was studying at the time of death, his probable income can be
determined at Rs.15,000/- p.a. from which 1/3 is deducted for the
annual dependency of the applicants. It is proper to apply 17
multiplier keeping in view the age of the deceased. Accordingly the
total dependency amount is Rs.10,000×17=Rs.1,70,000. Due to the
untimely death of son the applicant are deprived from love & affection
of son. So each applicant is entitled to Rs.10,000 is the annual
dependency of the applicants. It is proper to apply 17 multiplier
keeping in view the age of the deceased Rs.1,70,000. Apart from this
Rs.2000/- is awarded for funeral expenses. Thus the grand total
compensation of the applicants is Rs.1,92,000/- entitled to get from
Res 1-3 jointly or separately.”

 

 

 

8. The appellants challenged the award of the Tribunal by filing an
appeal under Section 173 of the Act but could not persuade the High Court
to grant substantial enhancement in the amount of compensation and the
appeal was disposed of with a direction to respondent Nos. 1 to 3 to pay
additional compensation of Rs.8,000 with interest at the rate of 6% per
annum.

 

9. We have heard learned counsel for the parties and perused the record.
For deciding the question whether the appellants are entitled to higher
compensation, it will be useful to notice some of the precedents. In Sarla
Verma v. D.T.C. (2009) 6 SCC 121, a two-Judge Bench of this Court took
cognizance of the lack of uniformity and consistency in awarding
compensation to the victims of accidents caused by motor vehicles, referred
to the judgments in U.P.S.R.T.C. v. Trilok Chandra (1996) 4 SCC 362, G.M.,
Kerala SRTC v. Susamma Thomas (1994) 2 SCC 176 and made the following
observations:

 

“Assessment of compensation though involving certain
hypothetical considerations, should nevertheless be objective.
Justice and justness emanate from equality in treatment,
consistency and thoroughness in adjudication, and fairness and
uniformity in the decision-making process and the decisions.
While it may not be possible to have mathematical precision or
identical awards in assessing compensation, same or similar
facts should lead to awards in the same range. When the
factors/inputs are the same, and the formula/legal principles
are the same, consistency and uniformity, and not divergence and
freakiness, should be the result of adjudication to arrive at
just compensation. In Susamma Thomas (1994) 2 SCC 176, this
Court stated:

 

“16. … The proper method of computation is the multiplier
method. Any departure, except in exceptional and
extraordinary cases, would introduce inconsistency of
principle, lack of uniformity and an element of
unpredictability, for the assessment of compensation.”

 

Basically only three facts need to be established by the
claimants for assessing compensation in the case of death:
(a) age of the deceased;
(b) income of the deceased; and
(c) the number of dependants.
The issues to be determined by the Tribunal to arrive at
the loss of dependency are:
(i) additions/deductions to be made for arriving at the
income;
(ii) the deduction to be made towards the personal living
expenses of the deceased; and
(iii) the multiplier to be applied with reference to the
age of the deceased.

 
If these determinants are standardised, there will be uniformity
and consistency in the decisions. There will be lesser need for
detailed evidence. It will also be easier for the insurance
companies to settle accident claims without delay.

 

To have uniformity and consistency, the Tribunals should
determine compensation in cases of death, by the following well-
settled steps:

 
Step 1 (Ascertaining the multiplicand)
The income of the deceased per annum should be determined. Out
of the said income a deduction should be made in regard to the
amount which the deceased would have spent on himself by way of
personal and living expenses. The balance, which is considered
to be the contribution to the dependant family, constitutes the
multiplicand.

 
Step 2 (Ascertaining the multiplier)
Having regard to the age of the deceased and period of active
career, the appropriate multiplier should be selected. This does
not mean ascertaining the number of years he would have lived or
worked but for the accident. Having regard to several
imponderables in life and economic factors, a table of
multipliers with reference to the age has been identified by
this Court. The multiplier should be chosen from the said table
with reference to the age of the deceased.

 
Step 3 (Actual calculation)
The annual contribution to the family (multiplicand) when
multiplied by such multiplier gives the “loss of dependency” to
the family.

 
Thereafter, a conventional amount in the range of Rs 5000 to Rs
10,000 may be added as loss of estate. Where the deceased is
survived by his widow, another conventional amount in the range
of 5000 to 10,000 should be added under the head of loss of
consortium. But no amount is to be awarded under the head of
pain, suffering or hardship caused to the legal heirs of the
deceased.

 
The funeral expenses, cost of transportation of the body (if
incurred) and cost of any medical treatment of the deceased
before death (if incurred) should also be added.”

 

 

 

The Bench then considered the question whether there should be
addition to the income for future prospects and observed:
“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 the deceased is more than 50 years.
Though the evidence may indicate a different percentage of
increase, it is necessary to standardise 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.”

 

 

 

The next issue considered by the Bench was whether there should be
deduction for personal and living expenses. After noticing some
precedents, the Bench observed:

 

“………. Having considered several subsequent decisions of
this Court, we are of the view that where the deceased was
married, the deduction towards personal and living expenses of
the deceased, should be one-third (1/3rd) where the number of
dependent family members is 2 to 3, one-fourth (1/4th) where the
number of dependent family members is 4 to 6, and one-fifth
(1/5th) where the number of dependent family members exceeds
six.

 

Where the deceased was a bachelor and the claimants are the
parents, the deduction follows a different principle. 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.

 

Thus even if the deceased is survived by parents and siblings,
only the mother would be considered to be a dependant, and 50%
would be treated as the personal and living expenses of the
bachelor and 50% as the contribution to the family. However,
where the family of the bachelor is large and dependent on the
income of the deceased, as in a case where he has a widowed
mother and large number of younger non-earning sisters or
brothers, his personal and living expenses may be restricted to
one-third and contribution to the family will be taken as two-
third.”

 

 

 
Finally, the complex issue relating to application of multiplier was
examined and decided in the following words:

 

“We therefore hold that the multiplier to be used should be as
mentioned in Column (4) of the table above (prepared by applying
Susamma Thomas (1994) 2 SCC 176, Trilok Chandra (1996) 4 SCC 362
and Charlie (2005) 10 SCC 720), which starts with an operative
multiplier of 18 (for the age groups of 15 to 20 and 21 to 25
years), reduced by one unit for every five years, that is M-17
for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40
years, M-14 for 41 to 45 years, and M-13 for 46 to 50 years,
then reduced by two units for every five years, that is, M-11
for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65
years and M-5 for 66 to 70 years.”

 
10. However, the issue relating to award of compensation to the parents
of the deceased, who was a student was neither dealt with nor decided in
Sarla Verma’s case. In Lata Wadhwa v. State of Bihar (2001) 8 SCC 197, a
three-Judge Bench of this Court entertained a writ petition filed under
Article 32 of the Constitution for ordering prosecution of the officers of
the Tata Iron and Steel Company and their agents and servants for the
alleged negligence in organizing a function at Jamshedpur in which 60
people were killed due to fire accident and for issue of a direction to the
State Government as well as the company to pay compensation to the victims.
For assessing the compensation payable to the victims, this Court
requested the former Chief Justice Shri Y.V. Chandrachud to examine the
matter and submit a report. The first part of the report submitted by Shri
Justice Y.V. Chandrachud dealt with the cases of death and the second part
dealt with the cases of burn injury. After taking cognizance of three
judgments of the Andhra Pradesh High Court in Chairman, A.P. SRTC v.
Shafiya Khatoon 1985 ACJ 212, Bhagwan Das v. Mohd. Arif 1987 ACJ 1052 and
A.P. SRTC v. G. Ramanaiah 1988 ACJ 223 and the views of the British Law
Commission wherein adoption of the multiplier method was advocated and
approved, Justice Chandrachud took the contribution of children above 10
years of age at Rs.12,000 per annum, applied multiplier of 11 and suggested
award of conventional amount of Rs.25,000. After considering the arguments
of Ms. Rani Jethmalani and Shri F.S. Nariman, learned counsel for the
parties, this Court directed payment of higher compensation. While dealing
with the cases of children, the Court observed as under:

 

“So far as the award of compensation in case of children is
concerned, Shri Justice Chandrachud has divided them into two
groups, the first group between the age group of 5 to 10 years
and the second group between the age group of 10 to 15 years. In
case of children between the age group of 5 to 10 years, a
uniform sum of Rs 50,000 has been held to be payable by way of
compensation, to which the conventional figure of Rs 25,000 has
been added and as such to the heirs of the 14 children, a
consolidated sum of Rs 75,000 each, has been awarded. So far as
the children in the age group of 10 to 15 years, there are 10
such children who died on the fateful day and having found their
contribution to the family at Rs 12,000 per annum, 11 multiplier
has been applied, particularly, depending upon the age of the
father and then the conventional compensation of Rs 25,000 has
been added to each case and consequently, the heirs of each of
the deceased above 10 years of age, have been granted
compensation to the tune of Rs 1,57,000 each. In case of the
death of an infant, there may have been no actual pecuniary
benefit derived by its parents during the child’s lifetime. But
this will not necessarily bar the parents’ claim and prospective
loss will found a valid claim provided that the parents
establish that they had a reasonable expectation of pecuniary
benefit if the child had lived. This principle was laid down by
the House of Lords in the famous case of Taff Vale Rly. v.
Jenkins and Lord Atkinson said thus:

 

“… all that is necessary is that a reasonable expectation
of pecuniary benefit should be entertained by the person
who sues. It is quite true that the existence of this
expectation is an inference of fact — there must be a basis
of fact from which the inference can reasonably be drawn;
but I wish to express my emphatic dissent from the
proposition that it is necessary that two of the facts
without which the inference cannot be drawn are, first,
that the deceased earned money in the past, and, second,
that he or she contributed to the support of the plaintiff.
These are, no doubt, pregnant pieces of evidence, but they
are only pieces of evidence; and the necessary inference
can, I think, be drawn from circumstances other than and
different from them.”

 

At the same time, it must be held that a mere speculative
possibility of benefit is not sufficient. Question whether there
exists a reasonable expectation of pecuniary advantage is always
a mixed question of fact and law. There are several decided
cases on this point, providing the guidelines for determination
of compensation in such cases but we do not think it necessary
for us to advert, as the claimants had not adduced any materials
on the reasonable expectation of pecuniary benefits, which the
parents expected. In case of a bright and healthy boy, his
performances in the school, it would be easier for the authority
to arrive at the compensation amount, which may be different
from another sickly, unhealthy, rickety child and bad student,
but as has been stated earlier, not an iota of material was
produced before Shri Justice Chandrachud to enable him to arrive
at a just compensation in such cases and, therefore, he has
determined the same on an approximation. Mr Nariman, appearing
for TISCO on his own, submitted that the compensation determined
for the children of all age groups could be doubled, as in his
views also, the determination made is grossly inadequate. Loss
of a child to the parents is irrecoupable, and no amount of
money could compensate the parents. Having regard to the
environment from which these children were brought, their
parents being reasonably well-placed officials of Tata Iron and
Steel Company, and on considering the submission of Mr Nariman,
we would direct that the compensation amount for the children
between the age group of 5 to 10 years should be three times. In
other words, it should be Rs 1.5 lakhs, to which the
conventional figure of Rs 50,000 should be added and thus the
total amount in each case would be Rs 2.00 lakhs. So far as the
children between the age group of 10 to 15 years, they are all
students of Class VI to Class X and are children of employees of
TISCO. TISCO itself has a tradition that every employee can get
one of his children employed in the Company. Having regard to
these facts, in their case, the contribution of Rs 12,000 per
annum appears to us to be on the lower side and in our
considered opinion, the contribution should be Rs 24,000 and
instead of 11 multiplier, the appropriate multiplier would be
15. Therefore, the compensation, so calculated on the aforesaid
basis should be worked out to Rs 3.60 lakhs, to which an
additional sum of Rs 50,000 has to be added, thus making the
total amount payable at Rs 4.10 lakhs for each of the claimants
of the aforesaid deceased children.”

 

 

 
11. In M.S. Grewal v. Deep Chand Sood (2001) 8 SCC 151, a two-Judge Bench
considered issues of negligence resulting in death of 14 students of
Dalhausie Public School. The students died due to drowning in River Beas.
After holding that the teachers of the school were negligent, the Court
referred to the judgment in Lata Wadha’s case as also the judgment in G.M.,
Kerala SRTC v. Susamma Thomas (supra) and proceeded to observe:

 

“In Lata Wadhwa case however, this Court came to a conclusion
that upon acceptability of the multiplier method and depending
upon the fact situation, namely, the involvement of TISCO in its
tradition that every employee can get one of his children
employed in the Company and having regard to the multiplier 15
the compensation was calculated at Rs 3.60 lakhs with an
additional sum of Rs 50,000 as a conventional figure making the
total amount payable at Rs 4.10 lakhs for each of the claimants
of the deceased children.

 

The decision in Lata Wadhwa thus, is definitely a guiding factor
in the matter of award of compensation wherein children died due
to an unfortunate incident as noticed more fully hereinbefore in
this judgment.

 

Having considered the matter in its proper perspective and the
applicability of the multiplier method and without even any
further material on record, we do feel it expedient to note that
though Mr Bahuguna attributed the quantum granted by the High
Court as strangely absurd, we, however, are not in a position to
lend our concurrence therewith. It is not that the award of
compensation at Rs 5 lakhs can be attributed to be the resultant
effect of either emotions or sentiments or the High Court’s
anguish over the incident. The High Court obviously considered
the overall situation as regards social placement of the
students. As stated hereinafter the School presently is one of
the affluent schools in the country and the fee structure and
other incidentals are so high that it would be a well-nigh
impossibility to think of admission in the School at even the
upper middle class level. Obviously the School caters to the
need of the upper strata of the society and if the Second
Schedule of the Motor Vehicles Act can be termed to be any
guide, the compensation could have been a much larger sum. Thus
in the factual situation, award of compensation at Rs 5 lakhs
cannot by any stretch be termed to be excessive. Another
redeeming feature of Mr Bahuguna’s submissions pertains to the
theory of ability to pay: audited accounts have been produced
for the year 1995 depicting a situation, though not of having
stringency but the situation truly cannot but be ascribed to be
otherwise comfortable to pay as directed by the High Court. The
matter, however, was prolonged in the law courts in the usual
manner and it took nearly six years for its final disposal
before this Court — these six years, however, had rendered the
financial stability of the School concerned in a much more
stronger situation than what it was in the year 1995. The School
as of date stands out to be one of the most affluent schools in
the country, as such ability to pay cannot be termed to be an
issue in the matter and in the wake thereto we are not inclined
to deal with the same in any further detail.”

 

 

 
12. At this stage, we may usefully notice the judgment in Arvind Kumar
Mishra v. New India Assurance Company Limited (2010) 10 SCC 254. In that
case, a two-Judge Bench considered the issue relating to award of
compensation to the appellant who had suffered grievous injuries in a road
accident. At the time of the accident, the appellant’s age was 25 years
and he was a student of Bachelor of Engineering (Mechanical). The Tribunal
had awarded compensation of Rs.2,50,000. The High Court enhanced it to
Rs.3,50,000. After noticing the judgments in G.M., Kerala SRTC v. Susamma
Thomas (supra) and Sarla Verma v. DTC (supra), the Bench enhanced the
amount of compensation to Rs.9,06,000. The reasons for this approach are
discernible from paragraphs 13 to 15 of the judgment, which are extracted
below:

 

“13. The appellant at the time of accident was a final year
Engineering (Mechanical) student in a reputed college. He was a
remarkably brilliant student having passed all his semester
examinations in distinction. Due to the said accident he
suffered grievous injuries and remained in coma for about two
months. His studies got interrupted as he was moved to different
hospitals for surgeries and other treatments. For many months
his condition remained serious; his right hand was amputated and
vision seriously affected. These multiple injuries ultimately
led to 70% permanent disablement. He has been rendered
incapacitated and a career ahead of him in his chosen line of
Mechanical Engineering got dashed for ever. He is now in a
physical condition that he requires domestic help throughout his
life. He has been deprived of pecuniary benefits which he could
have reasonably acquired had he not suffered permanent
disablement to the extent of 70% in the accident.

 

14. On completion of Bachelor of Engineering (Mechanical) from
the prestigious institute like BIT, it can be reasonably assumed
that he would have got a good job. The appellant has stated in
his evidence that in the campus interview he was selected by
Tata as well as Reliance Industries and was offered pay package
of Rs. 3,50,000 per annum. Even if that is not accepted for want
of any evidence in support thereof, there would not have been
any difficulty for him in getting some decent job in the private
sector. Had he decided to join government service and got
selected, he would have been put in the pay scale for Assistant
Engineer and would have at least earned Rs. 60,000 per annum.
Wherever he joined, he had a fair chance of some promotion and
remote chance of some high position. But uncertainties of life
cannot be ignored taking relevant factors into consideration. In
our opinion, it is fair and reasonable to assess his future
earnings at Rs. 60,000 per annum taking the salary and
allowances payable to an Assistant Engineer in public employment
as the basis. Since he suffered 70% permanent disability, the
future earnings may be discounted by 30% and, accordingly, we
estimate upon the facts that the multiplicand should be Rs.
42,000 per annum.

 

15. The appellant at the time of accident was about 25 years.
As per the decision of this Court in Sarla Verma v. DTC the
operative multiplier would be 18. The loss of future earnings by
multiplying the multiplicand of Rs. 42,000 by a multiplier of 18
comes to Rs. 7,56,000. The damages to compensate the appellant
towards loss of future earnings, in our considered judgment,
must be Rs. 7,56,000. The Tribunal awarded him Rs. 1,50,000
towards treatment including the medical expenses. The same is
maintained as it is and, accordingly, the total amount of
compensation to which the appellant is entitled is Rs.
9,06,000.”

 

 

 

13. In Lata Wadhwa’s case, the accident had occurred on 03.03.1989 and
this Court awarded compensation of Rs.4,10,000 to the parents of the
deceased children who were students of Classes VI to X. In M.S. Grewal’s
case, the accident had occurred on 28.5.1995. This Court awarded
compensation of Rs.5,00,000 to the parents of the children who were
students of IV, V and VI classes. In Anil Kumar Mishra’s case, the
accident had occurred on 23.6.1993 and the victim of accident, who was a
student of final year Engineering was awarded compensation of Rs.9,06,000.

 

14. In the present case, the accident occurred on 20.1.2003. The
deceased was 19 years old and was a student of Engineering course. The
Tribunal determined the compensation by taking his annual income to be
Rs.15,000 and deducted 1/3rd towards personal expenses. In Arvind Kumar
Mishra’s case, the Bench proceeded on the assumption that after completion
of the Engineering course, the appellant could have been appointed as
Assistant Engineer and earn Rs.60,000 per annum. However, keeping in view
the degree of disability, his estimated earning was taken as Rs.42,000 per
annum and accordingly the amount of compensation was awarded. By applying
the same yardstick and having regard to the age of the parents of the
deceased, i.e., 45 and 42 respectively, we feel that ends of justice will
be served by awarding a lump sum compensation of Rs.7,00,000 to the
appellants.

 

15. In the result, the appeal is partly allowed. The impugned judgment
is modified and it is declared that the appellants shall be entitled to
compensation of Rs.7,00,000 with interest at the rate of 6% per annum on
the enhanced amount with effect from the date of filing petition under
Section 166 of the Act.

 

16. Respondent No.3 is directed to pay the amount of enhanced
compensation and interest within a period of three months by getting
prepared two demand drafts of equal amount in the names of appellant Nos.1
and 2. It will be open to respondent No.3 to recover from respondent Nos.1
and 2 their respective shares of the compensation.

 

……………………………..….J.
[G.S. SINGHVI]

 

 

 

New Delhi, …….……..…..………………..J.
October 31, 2013. [GYAN SUDHA MISRA]

 

 

 

 

 

———————–
15

 

 

 

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