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IN THE SUPREME COURT OF INDIA

CIVIL  APPELLATE  JURISDICTION

CIVIL APPEAL NO. 4497 OF 2015 (Arising from S.L.P. (C) No. 8362/2013)

Munna Lal Jain and another  … Appellant (s)   

Versus

Vipin Kumar Sharma and others … Respondent (s)

J U D G M E N T  

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

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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

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v.  National  Insurance  Company  Limited1.  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 another2, 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 %

1  (2012) 6 SCC 421 2  (2009) 6 SCC 121

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was approved recently by a three-Judge Bench decision in Reshma

Kumari and others v. Madan Mohan and another3, 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  himself  does.  The  percentage  of deduction  on  account  of  personal  and  living expenses may vary with reference to the number of  dependent members in the family and the personal living  expenses  of  the  deceased  need  not  exactly correspond to the number of dependants.”

10. In  the  case  before  us,  there  are  no  such  exceptional

circumstances or compelling reasons for deviation on the basis of

evidence and therefore deduction of 50% towards the personal and

living expenses is not to be disturbed.  

11. As far  as  future  prospects  are  concerned,  in  Rajesh and

others v.  Rajbir Singh and others4, a three-Judge Bench of this

3  (2013) 9 SCC 65 4  (2013) 9 SCC 54

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Court  held  that  in  case  of  self-employed  persons  also,  if  the

deceased victim is below 40 years, there must be addition of 50% to

the  actual  income  of  the  deceased  while  computing  future

prospects. To quote:

“8. Since, the Court in Santosh Devi case actually intended  to  follow  the  principle  in  the  case  of salaried persons as laid down in  Sarla Verma case and to make it applicable also to the self-employed and persons on fixed wages, it is clarified that the increase  in  the  case  of  those  groups  is  not  30% always; it will  also have a reference to the age. In other words, in the case of self-employed or persons with fixed wages, in case, the deceased victim was below 40 years, there must be an addition of 50% to the actual income of the deceased while computing future  prospects.  Needless  to  say  that  the  actual income should be income after paying the tax, if any. Addition should be 30% in case the deceased was in the age group of 40 to 50 years.”

The deceased being of the age of 30 years, 50% is the required

addition.

12. The remaining question is only on multiplier. The High Court

following  Santosh  Devi (supra),  has  taken  13  as  the  multiplier.

Whether the multiplier should depend on the age of the dependants

or that of the deceased, has been hanging fire for sometime; but

that  has  been  given  a  quietus  by  another  three-Judge  Bench

decision in Reshma Kumari (supra). It was held that the multiplier

is to be used with reference to the age of the deceased. One reason

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appears to be that there is certainty with regard to the age of the

deceased but as far as that of dependants is concerned, there will

always be room for dispute as to whether the age of the eldest or

youngest or even the average, etc., is to be taken. To quote:  

“36. In  Sarla  Verma,  this  Court  has endeavoured  to  simplify  the  otherwise  complex exercise of  assessment of  loss  of  dependency and determination  of  compensation  in  a  claim  made under Section 166. It has been rightly stated in Sarla Verma that the claimants in case of death claim for the purposes of compensation must establish (a) age of the deceased; (b) income of the deceased; and (c) the number of dependants. To arrive at the loss of dependency,  the  Tribunal  must  consider  (i) additions/deductions to be made for arriving at the income; (ii) the deductions 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. We do not think it is necessary for us to revisit the law on the point as we are in full agreement with the view in Sarla Verma.”

13. In  Sarla  Verma (supra),  at  paragraph-19,  a  two-Judge

Bench dealt with this aspect in Step 2. To quote:

“19.  xxxxxx xxx 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

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of the deceased.”

14. The  multiplier,  in  the  case  of  the  age  of  the  deceased

between 26 to 30 years is 17. There is no dispute or grievance on

fixation of monthly income as Rs.12,000.00 by the High Court.  

15. Thus,  the  appellants  are  entitled  to  compensation  of

Rs.18,36,000.00 towards loss of dependency, which is calculated as

follows –  

CALCULATION TOTAL (IN RS.)

           Rs.12,000/- (Monthly Income)                        add  [50% of Rs.12,000/-(Future Prospects)]  = 18,000.00

           50% of [Rs.18,000/- (Deductions)]        = 9,000.00

 [Rs.9,000/-] multiply by [12(Annual Income)] = 1,08,000.00

 [Rs.1,08,000/-] multiply by [17(Multiplier)]    = 18,36,000.00

There shall be no change on the amounts awarded by the High Court

on other heads or on rate of interest.

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16. The appeal is allowed as above. There shall be no order as to

costs.

                                  ....…….…..…………J.

                     (ANIL R. DAVE)

     ....…….…..…………J.                      (MADAN B. LOKUR)

...……………………J.                        (KURIAN JOSEPH)

New Delhi; May 15, 2015.    

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