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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.5373-5375 OF 2013 (Arising  out of SLP (C) Nos. 7407-7409 of 2012)

REKHA JAIN & ANR.     ... APPELLANTS VS.

NATIONAL INSURANCE CO.LTD.       ... RESPONDENT

J U D G M E N T

V. Gopala Gowda, J.

 Leave granted by this Court vide order dated  

02.07.2013 after condoning the delay in filing the  

special leave petitions.

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2. These appeals are filed by the claimants namely  

Rekha Jain and T.A. Sebastian. They have questioned  

the correctness of the judgment and award and order  

dated 24.2.2011 passed by the High Court of Orissa,  

Cuttack in MACA No. 579 of 2007 and order dated  

10/03/2011 in MC No. 385 of 2011 in MACA No. 579 of  

2007 in the aforesaid appeal and final order dated  

24.11.2011 in M.A.C.A. No.844 of 2007 urging rival  

facts and legal contentions.

3. The daughter and the husband of the deceased  

have  filed  these  appeals  seeking  just  and  

reasonable compensation on account of the death of  

the  deceased  in  a  motor  vehicle  accident,  which  

took  place  on  17.08.2001.   The  deceased  was  

traveling  alongwith  her  daughter,  the  first  

appellant in her Maruti Car bearing Regn. No. OR 15  

D-9005. The accident took place on account of rash  

and  negligent  driving  of  the  offending  truck  

bearing Regn. No. MP 23 D-0096. The deceased Dr.  

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Grace Jain died on the spot, as she had sustained  

grievous injuries on account of the said accident.  

It is stated by the appellants that the deceased  

was  a  renowned  doctor  serving  as  a  lecturer  in  

Odisha  College  of  Homeopathy  and  Research,  

Sambalpur and had private practice as well.  

4. It is stated in the claim petition and in the  

evidence  that  the  salary  of  the  deceased  was  

Rs.12,000/- per month.  The appellants herein filed  

claim petition i.e. Misc.(A) Case No.118 of 2002  

claiming compensation of Rs.27,00,000/- before the  

Second  Motor  Accidents  Claims  Tribunal,  Northern  

Division,  Sambalpur  (hereinafter  referred  to  as  

‘the Tribunal’).      

5. The owner of the truck (since deleted from the  

array  of  parties)  appeared  and  filed  identical  

written statement in the claim petition as that of  

the written statement filed in Rekha Jain’s claim  

petition.   According to him, the driver of the  

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truck had valid driving licence and the same was  

insured  with  Respondent  -  National  Insurance  

Company  Limited  (hereinafter  referred  to  as  the  

‘Insurance Company’).  The owner of the offending  

vehicle has further stated that his driver was not  

negligent. A motor cyclist suddenly came in front  

of the truck overtaking him from its left side and  

hence the driver had to move to the right side in  

order to avoid accident with the motor cyclist. In  

that process the truck hit the Maruti car causing  

death of the deceased.

6. The respondent-Insurance Company had also filed  

similar  written  statement  in  both  the  claim  

petitions denying its liability on the ground that  

the driver of the offending truck was negligent and  

that the accident occurred due to the negligence of  

the driver of the Maruti Car. On behalf of Rekha  

Jain, the first appellant herself was examined as a  

witness  PW  3  and  two  other  eye  witnesses  were  

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examined as PW 1 and PW 2 to prove the occurrence  

of the accident.  On the basis of documentary and  

oral evidence particularly eye witnesses’ evidence,  

the finding of fact was recorded on issue Nos. 2  

and 3 that the accident took place on account of  

rash and negligent driving of the offending truck  

driver  and  it  was  also  answered  that  the  claim  

petition filed by the appellants is maintainable.  

The Tribunal held that the appellant’s mother died  

and the first appellant was grievously injured due  

to the accident involving offending vehicle. The  

Tribunal also recorded the finding of fact holding  

that the accident took place on account of rash and  

negligent driving by the driver of the offending  

vehicle.  Consequently, issue No.4 was answered by  

awarding compensation at Rs.10,62,000/-  with 6%  

interest per annum by accepting the pleading of the  

appellants that the deceased was a renowned doctor  

practicing in Government Hospital.

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7. The claim petition Misc.(A) Case  No. 118/2002  

was allowed with interest @ 6% per annum from the  

date on which the claim petition was filed and the  

respondents  were  directed  by  the  Tribunal  to  

deposit Rs.5,00,000/- each for both the appellants  

for a period of five years with quarterly interest  

payable to them.  The Tribunal also directed the  

payment  of  balance  amount  and  interest  on  the  

compensation  in  equal  proportion  to  both  the  

appellants in cash.    

8. Aggrieved by the above said judgment and award  

both  the  Insurance  Company  as  well  as  the  

appellants filed appeals before the High Court of  

Orissa, which were numbered as M.A.C.A. No. 579 of  

2007 and M.A.C.A. No.844 of 2007. as the Insurance  

Company is aggrieved by fastening of liability and  

quantum  of  compensation  and  the  appellants  have  

prayed for just and reasonable compensation. The  

High  Court  after  examining  the  appeal  of  the  

Insurance  Company,  found  fault  with  the  

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compensation  awarded  by  the  Tribunal  at  

Rs.10,62,000/-  in favour of the appellants taking  

monthly earnings of the deceased at Rs. 12,000/-,  

in  the  absence  of  material  evidence  produced  on  

record regarding the proof of her monthly salary.  

The  Tribunal  calculated  the  compensation  by  

deducting 1/3rd out of the monthly salary towards  

her personal expenses and her contribution to the  

appellants’ family. The same is taken as Rs.8,000/-  

per month. Hence, her annual income was assessed at  

Rs.96,000/-.  The age of the deceased is recorded  

at about 51 years. Hence, a multiplier of 11 was  

used for calculating the loss of dependency of the  

appellants and Rs.10,62,000/- was awarded by the  

Tribunal, which included Rs.6,000/- towards general  

damages.   The High Court however, arrived at the  

conclusion and recorded the finding of fact stating  

that  a  compensation  of  Rs.10,62,000/-  is  on  the  

higher side and hence, the same was reduced by the  

High Court to Rs.8,00,000/-.  

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9. Aggrieved by the same, the appeal was filed by  

the  appellants  for  modification  of  the  impugned  

judgment  for  grant  of  just  and  reasonable  

compensation to them.  It is urged that the appeal  

of the appellants was dismissed by the High Court  

without  examining  the  case  independently  and  

appreciating  the  pleadings,  legal  evidence  on  

record  and  law  on  the  question  and  without  

following  the  criteria  for  awarding  just  and  

reasonable  compensation.  The  correctness  of  the  

judgment, awards and order passed on 10.3.2011 in  

Misc. Case No.385 of 2011 modifying the order dated  

24.2.2011  is  challenged  wherein  the  modification  

was only to the extent of the direction given by  

the High Court that out of the awarded amount, an  

amount equivalent to 60% shall be kept in fixed  

deposit  in  the  name  of  appellants  in  any  

nationalized bank for a period of five years and  

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the  balance  amount  should  be  disbursed  to  the  

appellants.  

10. However, the High Court has taken Rs.12,000/-  

per month as the monthly income of the deceased for  

the  purpose  of  determining  the  compensation  in  

favour of the appellants.  It is urged that this  

approach  of  the  High  Court  in  reducing  the  

compensation awarded by the Tribunal is erroneous  

in law.  Further, the multiplier applied by both  

the Tribunal as well as the High Court is contrary  

to the multiplier mentioned in the schedule which  

is applicable for special reasons having regard to  

the  facts  and  circumstances  of  the  case  placing  

reliance upon the judgment of this Court in the  

case of United India Insurance Co. Ltd. & Ors.  v.  Patricia  Jean  Mahajan  &  Ors.1 The  relevant  paragraph of the judgment reads as under:

“13. We may refer to the decision in G.M., Kerala SRTC v.  Susamma Thomas. In this case while considering the law  

1 2002(6) SCC 281

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on the subject, it was observed in para 13 of the Report as  follows: (SCC p. 183) “The choice of the multiplier is determined by the age of  the deceased (or that of the claimants whichever is higher)  and by the calculation as to what capital sum, if invested  at  a  rate  of  interest  appropriate  to  a  stable  economy,  would yield the multiplicand by way of annual interest. In  ascertaining this, regard should also be had to the fact that  ultimately  the  capital  sum should  also  be  consumed up  over the period for which the dependency is expected to  last.”

11. The Tribunal and the High Court have erred in  

not awarding just and reasonable compensation in  

favour  of  the  appellants  keeping  in  view  the  

principles  laid  down  by  this  Court  in  various  

judgments in the matters of motor accidents claims  

keeping in view the object of compensation which  

will  be  the  source  of  the  maintenance  for  them  

particularly, in respect of the claimant, appellant  

no.1.  The  High  Court  instead  of  enhancing  the  

compensation though the case is made out in the  

appeal filed by the appellants for enhancement, has  

erroneously  exercised  its  jurisdiction  and  has  

reduced  the  compensation  from  Rs.10,62,000/-  to  

Rs.8,00,000/- without taking into consideration the  

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facts of the case that the deceased was a renowned  

doctor serving in Odisha College of Homeopathy and  

Research,  Sambalpur,  and  she  also  had  private  

practice  and  had  earned  good  reputation  in  the  

area.

12. The above said important aspect of the matter  

had been ignored both by the Tribunal as well as  

the High Court in not awarding just and reasonable  

compensation  in  favour  of  the  appellants.  

Therefore,  Mr.  Sukumar  Pattjoshi,  the  learned  

Senior Counsel for the appellants has sought for  

enhancement of compensation as claimed in the claim  

petition by the appellants.   

13. On the other hand, Mr. S.L. Gupta, the learned  

counsel for the Insurance Company sought to justify  

the impugned judgment passed by the High Court in  

its appeal and the appeal filed by the appellants  

contending  that  the  High  Court  has  rightly  

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considered the facts and legal evidence on record  

and  has  modified  the  impugned  judgment  of  the  

Tribunal and awarded compensation of Rs.8,00,000/-  

with 6% interest per annum and giving direction as  

contained in the impugned judgment passed in the  

appeal of the Insurance Company and modifying the  

same  vide  order  dated  10.3.2011  in  the  instant  

appeal  regarding  60%  of  deposit  of  the  awarded  

amount including the interests. Therefore, he has  

prayed for dismissal of the appeals as there is no  

merit.   

14. In  view  of  the  aforesaid  rival  factual  and  

legal contentions, the following points would fall  

for our consideration:

1. Whether the High Court is justified in  

reducing  the  compensation  from  

Rs.10,62,000/- to Rs.8,00,000/-  with  

6% interest per annum?

2. Whether  the  appellants  are  entitled  

for enhanced compensation?

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3. What award?

15. We  have  perused  the  impugned  judgment  and  

evidence on record particularly the evidence of PW  

3,  the  first  appellant  who  is  the  daughter  of  

deceased.  It  should  have  been  taken  into  

consideration that the employment of the deceased  

was a public employment. Therefore, it was a stable  

employment for a period of another seven years and  

there  could  have  been  revision  of  wages  and  

promotional benefits accrued in her favour if she  

was alive.  Therefore, for determining the annual  

income of the deceased, the principles laid down in  

Sarla Verma & Ors. v. Delhi Transport Corp. & Anr2  

should  have  been  applied  to  the  case  of  the  

appellants by taking into consideration the monthly  

salary of the deceased at Rs.12,000/- to which 30%  

should  have  been  added  as  future  prospects  of  

income  as  mentioned  above  and  that  much  amount  

could  have  been  taken  as  monthly  income  of  the  2 2009 (6) SCC 121

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deceased  for  the  purpose  of  determining  the  

compensation towards the loss of dependency of the  

appellants.  The  relevant  paragraph  of  the  case  

reads as under:

“24. 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 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.”

This aspect of the matter is not taken into  

consideration  by  the  Tribunal  while  awarding  

compensation.  Nonetheless,  it  has  accepted  the  

claim made by the appellants that the salary of the  

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deceased  was  Rs.12,000/-  per  month  and  the  

multiplier 11 was applied and awarded compensation  

of Rs.10,62,000/-.  The same has been interfered  

with by the High Court in the Appeal filed by the  

Insurance  Company  though  it  has  no  right  to  

challenge the quantum of compensation as it has got  

limited defence as provided under Section 149(2) of  

the Motor Vehicles Act in the absence of permission  

from the Tribunal to avail the defence on behalf of  

the insurer as required under Section 170(b) of the  

Act.  This principle has been laid down by three  

judge  Bench  decision  of  this  Court  in  National  Insurance Co. Ltd. vs.  Nicolletta Rohtagi & Ors.3  

The  relevant  paragraphs  of  the  judgment  read  as  

under:

“15. It  is  relevant  to  note that  Parliament,  while  enacting  sub-section  (2)  of  Section  149  only  specified  some of  the  defences  which are  based on conditions  of  the policy  and,  therefore, any other breach of conditions of the policy by the  insured which does not find place in sub-section (2) of Section  149  cannot  be  taken  as  a  defence  by  the  insurer.  If  Parliament  had  intended  to  include  the  breach  of  other  conditions  of  the  policy  as  a  defence,  it  could  have easily  provided any breach of conditions of insurance policy in sub-

3 (2002) 7 SCC 456

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section (2) of Section 149. If we permit the insurer to take  any other defence other than those specified in sub-section  (2)  of  Section  149,  it  would  mean  we  are  adding  more  defences to the insurer in the statute which is neither found in  the Act nor was intended to be included. 16. For the aforesaid reasons, we are of the view that the  statutory  defences  which  are  available  to  the  insurer  to  contest  a claim are  confined to  what  are provided in sub- section (2) of Section 149 of the 1988 Act and not more and  for that reason if an insurer is to file an appeal, the challenge  in the appeal would confine to only those grounds.”

16.  In our considered view the Tribunal and the  

High  Court  have  erred  in  not  following  the  

principles laid down in  Sarla Verma’ case (supra)  in fixing the monthly income at Rs.12,000/- in the  

absence of documentary evidence having regard to  

the fact that the deceased was employed as Lecturer  

in  Odisha  College  of  Homeopathy  and  Research,  

Sambalpur and she also had private practice.  The  

Tribunal in exercise of its original jurisdiction  

has taken Rs.12,000/- as her monthly income and has  

deducted 1/3rd out of the monthly salary towards her  

personal  expenses  and  computed  the  compensation  

both  on  the  loss  of  dependency  as  well  as  the  

conventional heads and has awarded Rs.10,62,000/-.  

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The same should not have been interfered with by  

the  High  Court  in  exercise  of  its  appellate  

jurisdiction.  Hence, the impugned judgment, award  

and order passed in the Misc. Case no. 385/2011 in  

M.A.C.A No. 579/2007 is required to be interfered  

with. So also the order dated 10.3.2011 in Misc.  

Case No.385 of 2011 modifying the earlier direction  

issued by the High Court to deposit 60% of the  

awarded amount in any of the Nationalized Bank, is  

required to be interfered with.  Accordingly, both  

the  impugned  judgment,  award  and  orders  dated  

24.2.2011 and 10.03.2011 are hereby set aside by  

allowing the civil appeals.

17. Having regard to the facts, circumstances and  

the  finding  recorded  by  the  Tribunal  in  its  

judgment,  we  restore  the  same  in  awarding  

compensation  in  favour  of  the  appellants  at  

Rs.10,62,000/- with interest at the rate of 6% per  

annum. The appeal of the appellants for enhancement  

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is disposed of in the above terms.  We further keep  

the order of the Tribunal dated 20.3.2007 in so far  

as  the  directions  issued  by  it  for  deposit  of  

awarded  amount  in  M.A.C.  No.  118  of  2002  are  

concerned.

18. The appeals are disposed of accordingly.  There  

will be no order as to costs.

………………………………………………J.     [G.S.  SINGHVI]

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

 [V. GOPALA GOWDA]

New Delhi, August 1, 2013.

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