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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4646 OF 2009

Reshma Kumari and Ors. …  Appellants

         Vs.

Madan Mohan and Anr.                     …  Respondents

WITH

CIVIL APPEAL NO. 4647 OF 2009

JUDGMENT

R.M. LODHA,J.

A  two-Judge  Bench  (S.B.  Sinha  and  Cyriac  Joseph,  JJ.)  

proceeded  to hear these appeals on two common questions, namely,  

(1) Whether multiplier specified in the Second Schedule appended to  

the Motor  Vehicles Act,  1988 (for  short  “the 1988 Act”)   should  be  

scrupulously  applied in all cases? and (2) Whether for determination  

of the multiplicand, the 1988 Act provides for any criterion, particularly  

as regards determination of future prospect.  In the course of hearing  

few  decisions  of  this  Court,  General  Manager,  Kerala  State  Road  

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Transport Corporation, Trivandrum  v. Susamma Thomas (Mrs.) and   

Ors1.,  Sarla Dixit (Smt.) and Anr. v. Balwant Yadav and Ors2.,  U.P.  

State  Road Transport  Corporation  and Ors.  V.  Trilok  Chandra  and   

Ors.3,  Kaushnuma Begum (Smt.)  and Ors.  V. New India Assurance   

Co. Ltd. and Ors.4,  United India Insurance Co. Ltd. & Ors. v. Patricia   

Jean Mahajan & Ors.5, Jyoti Kaul & Ors. v. State of M.P. & Anr.6, Abati   

Bezbaruah v. Dy. Director General, Geological Survey of India & Anr.7,   

New India Assurance Co. Ltd. v. Shanti Pathak (Smt.) & Ors.8,  were  

cited.    The attention of the Bench was also invited to Sections 163A  

and 166 of  the 1988 Act.   The Bench was of  the opinion  that  the  

question,  whether  the  multiplier  specified  in  the  Second  Schedule  

should  be  taken  to  be   guide   for  calculation  of  amount  of  

compensation payable in a case falling under Section 166 of the 1988  

Act needed to be decided by a larger Bench.  The reasons for referring  

the  above issue to  the larger  Bench indicated  in  the referral  order  

dated 23.07.2009 read as under:  

“39. We  have  noticed  hereinbefore  that  in  Patricia  Jean  Mahajan5 and  Abati  Bezbaruah7and  the  other  cases  following them multiplier specified in the Second Schedule  has been taken to be guiding factor  for calculation of the  

1 1994 (2) SCC 176 2 1996 (3) SCC 179  3 1996 (4) SCC 362 4 2001 (2) SCC 9 5 2002 (6) SCC 281  6  2002 (6) SCC 306   7 2003 (3) SCC 148  8  2007 (10) SCC 1

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amount of compensation even in a case under Section 166  of the Act.  However, in Shanti Pathak8 this Court advocated  application  of  lesser  multiplier,  although no legal  principle  has been laid therein.  40.  In  Trilok  Chandra3 this  Court  has  pointed  out  certain  purported calculation mistakes in the Second Schedule.  It,  however,   appears to  us that  there is no mistake therein.  Amount of compensation specified in the Second Schedule  only is required to be paid even if a higher or lower amount  can  be  said  to  be  the  quantum  of  compensation  upon  applying the multiplier system.  41.  Section  163-A  of  the  1988  Act  does  not  speak  of  application of any multiplier.  Even the Second Schedule, so  far as the same applies to fatal accident, does not say so.  The multiplier, in terms of the Second Schedule, is required  to  be  applied  in  a  case  of  disability  in  nonfatal  accident.  Consideration for payment of compensation in the case of  death in a “no fault liability” case vis-à-vis the  amount of  compensation payable in a case of permanent total disability  and  permanent  partial  disability  in  terms  of  the  Second  Schedule is to be applied by different norms.  Whereas in  the case of fatal accident the amount specified in the Second  Schedule  depending  upon  the  age  and  income  of  the  deceased is required to be paid where for the multiplier is  not to be applied at all  but in a case involving permanent  total disability or permanent partial disability the amount of  compensation  payable  is  required  to  be  arrived  at  by  multiplying  the  annual  loss  of  income  by  the  multiplier  applicable  to  the  age  of  the  injured  as  on  the  date  of  determining the compensation and in the case of permanent  partial disablement such percentage of compensation which  would  have  been payable  in  the  case  of  permanent  total  disablement   as  specified  under  item  (a)  of  the  Second  Schedule.  42.  The Parliament in its wisdom thought to provide for a  higher amount of compensation in case of permanent total  disablement and proportionate amount of  compensation in  case of permanent partial disablement depending upon the  percentage of disability.  43.   Thus,  prima  facie,  it  appears  that  the  multiplier  mentioned  in  the  Second  Schedule,  although  in  a  given  case,  may  be  taken  to  be  a  guide  but  the  same  is  not  decisive.   To  our  mind,  although  a  probable  amount  of  compensation as specified in the Second Schedule in the  event the age of  victim is  17 or 20 years and his annual  income is Rs. 40,000/-, his heirs/legal representatives is to  

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receive a sum of Rs.7,60,000/-, however, if an application for  grant of compensation is filed in terms of Section 166 of the  1988 Act that much amount may not be paid, although in the  former case the amount of compensation is to be determined  on the basis  of  ‘no fault  liability’  and in  the later  on ‘fault   liability’.   In  the  aforementioned  situation  the  Courts,  we  opine, are required to lay down certain principles.  44.We are not unmindful  of  the Statement of Objects and  Reasons to Act 54 of 1994 for introducing Section 163-A so  as to provide for a new predetermined formula for payment  of  compensation  to  road accident  victims on the  basis  of  age/income; which is more liberal and rational.  That may be  so, but  it  defies logic as to why in a similar situation, the  injured  claimant  or  his  heirs/legal  representatives,  in  the  case of  death,  on  proof  of  negligence  on the  part  of  the  driver of a motor vehicle would get a lesser amount than the  one specified in the Second Schedule. The Courts,  in our  opinion, should also bear that factor in mind.  45. Having regard to divergence of opinion and this aspect of  the  matter  having  not  been  considered   in  the  earlier  decisions, particularly in the absence of any clarification from  the Parliament despite the recommendations made by this  Court in  Trilok Chandra3, the issue, in our opinion, shall be  decided by a Larger Bench.  It is directed accordingly.”  

 2. We are concerned with the above reference.  Before we refer  

to the provisions contained in Sections 163A and 166 of the 1988 Act,  

it  is  of  some  relevance  to  notice  the  background  in  which  the  

Parliament considered it necessary to bring in the provisions of no fault  

liability on the statute. It so happened that in Minu B. Mehta and Anr.   

v. Balkrishna Ramchandra Nayan and Anr.9 , a three-Judge Bench of  

this Court while considering the question whether  the fact of injury  

resulting from the accident involving the use of a vehicle on the public  

road is the basis of a liability and that it is not necessary to prove any  9 1977 (2) SCC 441

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negligence on the part of the driver, held that the liability of the owner  

of  the  car  to  compensate  the  victim  in  a  car  accident  due  to  the  

negligent driving of his servant is based on the law of tort and before  

the  master  could  be  made  liable  it  is  necessary  to  prove  that  the  

servant was acting during the course of his employment and that he  

was negligent.   This Court  held that the concept  of  owner’s  liability  

without any negligence is opposed to the basic principles of law. The  

mere fact that a person died or a party received an injury  arising out of  

the use of a vehicle in a public place cannot justify fastening liability on  

the owner. This Court noticed a judgment of Madras High Court in M/s  

Ruby Insurance Co. v. Govindaraj, (A.A.O. Nos. 607 of 1973 and 296  

of  1974) decided on December 13,  1976  wherein the necessity of  

having social insurance to provide cover for the claimants irrespective  

of proof of negligence to a limited extent  was suggested.  This Court  

said “unless these ideas are accepted by the legislature and embodied  

in appropriate enactments Courts are bound to administer  and give  

effect to the  law as it exists today.  We conclude by stating that the  

view of the learned Judges of the High Court has no support in law  

and hold that proof of negligence is necessary before the owner or the  

insurance  company  could  be  held  to  be  liable  for  the  payment  of  

compensation in a motor accident claim case”.

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3. The Parliament having regard to the above view of this Court  

and the recommendation of the Law Commission of India, amended  

the  Motor  Vehicles  Act,  1939  (for  short,  “1939  Act”)  and  inserted  

Section 92A therein which provided that in any claim for compensation  

under  sub-section  (1)  of  Section  92-A,  the  claimant  shall  not  be  

required  to  plead  and  establish  that  the  death  or  permanent  

disablement in respect of which the claim has been made was due to  

any wrongful  act,  neglect  or  default  of  the owner  or  owners  of  the  

vehicles concerned or of any other  person.

4. In  Gujarat State Road Transport Corporation, Ahmedabad v.  

Ramanbhai Prabhatbhai and Another10, a two-Judge Bench held that  

the compensation awardable under Section 92-A was without proof of  

any negligence on the part of the owner of the vehicle or any other  

person which was clearly a departure from the  usual  common law  

principle that a claimant should establish negligence on the part of the  

owner or driver of the motor vehicle before claiming any compensation  

for the death or permanent disablement caused on account of a motor  

vehicle accident.  Certain observations made in Minu B. Mehta9  were  

held to be obiter  in Ramanbhai  Prabhatbhai10 .

5. The 1988 Act replaced the 1939 Act.  Chapter X of the 1988  

Act deals with liability without fault in certain cases. Sub-section (3) of  10  1987 (3) SCC 234

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Section 140 provides that in any claim for compensation under sub-

section (1) the claimant shall not be required   to plead and establish  

that the death or  permanent disablement in respect of which the claim  

has been made was due to any wrongful act, neglect or default of the  

owner or  owners of the vehicle  or vehicles concerned or of any other  

person.   Chapter XI  of the 1988 Act deals with insurance of motor  

vehicles against third party risks.   Chapter XII deals with the claims  

tribunals.   Section  166  makes  a  provision  for  application  for  

compensation arising out of an accident which after few amendments  

reads as under:   

“Section 166 - Application for compensation

(1)  An  application  for  compensation  arising  out  of  an  accident of the nature specified in sub-section (1) of section  165 may be made-

(a) by the person who has sustained the injury; or

(b) by the owner of the property; or

(c) where death has resulted from the accident, by all or any  of the legal representatives of the deceased; or

(d) by any agent duly authorised by the person injured or all  or any of the legal representatives of the deceased, as the  case may be:

Provided  that  where  all  the  legal  representatives  of  the  deceased  have  not  joined  in  any  such  application  for  compensation, the application shall be made on behalf of or  for  the  benefit  of  all  the  legal  representatives  of  the  deceased and the  legal  representatives  who  have  not  so  joined, shall be impleaded as respondents to the application.

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(2) Every application under sub-section (1) shall be made,  at the option of the claimant, either to the Claims Tribunal  having  jurisdiction  over  the  area  in  which  the  accident  occurred or to the Claims Tribunal within the local limits of  whose  jurisdiction  the  claimant  resides  or  carries  on  business or within the local limits of whose jurisdiction the  defendant  resides,  and shall  be in such form and contain  such particulars as may be prescribed:

Provided  that  where  no  claim  for  compensation  under  section 140 is made in such application, the application shall  contain  a  separate  statement  to  that  effect  immediately  before the signature of the applicant.

(4) The Claims Tribunal shall treat any report of accidents  forwarded to it under sub-section (6) of section 158 as an  application for compensation under this Act.”

6. By Act 54 of  1994,  Section 163A was brought  in  the  

1988  Act w.e.f. 14.11.1994.  Section 163A may be reproduced which  

reads as under:-  

“163-A.  Special provisions as to payment of compensation   on structured formula basis.—(1) Notwithstanding anything  contained in this Act or in any other law for the time being in  force or instrument having the force of law, the owner of the  motor vehicle or the authorised insurer shall be liable to pay  in  the  case  of  death  or  permanent  disablement  due  to  accident  arising  out  of  the  use  of  motor  vehicle,  compensation, as indicated in the Second Schedule, to the  legal heirs or the victim, as the case may be. Explanation.—For  the  purposes  of  this  sub-section,  ‘permanent  disability’  shall  have  the  same  meaning  and  extent as in the Workmen's Compensation Act, 1923 (8 of  1923). (2) In any claim for compensation under sub-section (1), the  claimant shall not be required to plead or establish that the  death  or  permanent  disablement  in  respect  of  which  the  claim has been made was due to any wrongful act or neglect  or default of the owner of the vehicle or vehicles concerned  or of any other person.

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(3) The Central Government may, keeping in view the cost  of living by notification in the Official Gazette, from time to  time amend the Second Schedule.”

7. Along with Section 163A Second Schedule was inserted in the  

1988 Act.  Sub- section (3) of  Section 163A empowers the central  

government  to  amend   the  Second  Schedule   from  time  to  time  

keeping in  view the cost of living.  

8. Consequent upon the insertion of Section 163A in the 1988  

Act, certain amendments were brought in the 1988 Act.  Sub-section  

(5) which was inserted in Section 140 reads as follows:  

“Notwithstanding  anything  contained  in  sub-section  (2)  regarding death or bodily injury to any person, for which the  owner of the vehicle is liable to   give compensation for relief,  he is also liable to pay compensation under any other law for  the time being in force. Provided that the amount of such compensation to be given  under any other law shall  be reduced from the amount of  compensation payable under this section or under section  163A.”  

9. Section 163B was also brought  in  the 1988 Act  along with  

Section 163A. Section 163B reads as follows:  

“163B.  Option  to  file  claim  in  certain  cases.  –  Where  a  person is entitled to claim compensation under section 140  and section 163A, he shall file the claim under either of the  said sections and not under both.”  

10. The   1988  Act  gives  choice  to  the   claimants  to  seek  

compensation on structured formula basis as provided in Section 163A  

or make an application for compensation arising out of an accident of  

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the nature specified in sub-section (1) of Section 165 under Section  

166.  The claimants have to elect one of the two remedies provided in  

Section 163A and Section 166.  The remedy provided in Section 163A  

is not a remedy in addition to the remedy provided in Section 166 but it  

provides  for  an alternative  course  to  Section 166.  By incorporating  

Section 163A in the 1988 Act, the Parliament has provided the remedy  

for  payment  of  compensation notwithstanding  anything  contained in  

the  1988  Act  or  in  any  other  law  for  the  time  being   in  force  or  

instrument  having the force of law, that the owner of a motor vehicle  

or authorised insurer shall be liable to pay compensation on structured  

formula  basis  as  indicated  in  the  Second  Schedule  in  the  case of  

death or permanent disablement due to accident arising out of the use  

of  motor  vehicle.  The peculiar  feature of  Section 163A is that for a  

claim made  thereunder,  the  claimants  are  not  required  to  plead or  

establish  that the death or permanent disablement in respect of which  

the claim  has been made was due to  any wrongful act or neglect or  

default of the owner or owners of the vehicle concerned.  The scheme  

of Section 163A is a departure from the general principle of law of tort  

that the liability of the owner of the vehicle to compensate the victim or  

his heirs in a motor accident arises only on the proof of negligence on  

the  part  of  the  driver.   Section  163A  has  done  away  with  the  

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requirement of the proof of negligence on the part of the driver of the  

vehicle  where the victim of  an accident  or  his  dependants  elect  to  

apply for compensation under Section 163A.  When an application for  

compensation is made under Section 163A the compensation is paid  

as  indicated  in  the  Second  Schedule.   The  table  in  the  Second  

Schedule has been found by this Court to be defective to which we  

shall refer at a little later stage.  

11. On  the  other  hand,  by  making  an  application  for  

compensation  arising  out  of  an  accident  under  Section  166  it  is  

necessary for a claimant to prove negligence on the part of the driver  

or owner of the vehicle. The burden is on the claimant to establish the  

negligence on the part of the driver or owner of the vehicle and on  

proof  thereof,  the  claimant  is  entitled  to  compensation.  We  are  

confronted with the question, whether while considering an application  

for compensation made under Section 166, the multiplier specified in  

the Second Schedule can be taken to be guide for determination of  

amount of the compensation.  

12. In  Susamma  Thomas1,  this  Court  noticed  the  two  

decisions  of  House  of  Lords,  (1)  Davies  &  Anr.  v.  Powell  Duffryn   

Associated Collieries Ltd.11  and (2) Nance v. British Columbia Electric   

11 1942 (1) All ER 657

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Railway Co. Ltd.12  wherein two different methods – lump sum method  

and  multiplier  method  -  were  adopted  for  determination  and  for  

calculation of compensation in fatal accident actions.  This Court has  

preferred  the  multiplier  method  adopted  in  Davies  case11.  While  

holding so, this Court also referred to another decision of House of  

Lords in Mallett v. Mc Monagle13. It has been laid down in Susamma  

Thomas1 that multiplier method was logically sound and legally well  

established. The multiplier represented the number of year’s purchase  

on which the loss of dependency is capitalized. The multiplier method  

involves  the  ascertainment  of  the  loss  of  dependency  or  the  

multiplicand  having  regard  to  the  circumstances  of  the  case  and  

capitalizing the multiplicand by an appropriate multiplier.  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,  the Court  said that  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.   In Susamma Thomas1  

12  1951 (2) All ER 448  13 1969 (2) All ER 178

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this Court  noticed that  English Courts have rarely  applied operative  

multiplier exceeding 16.

13. The award of compensation in a motor accident case  

based on the multiplier method is an established norm in India now. A  

three-Judge Bench in  Trilok Chandra3 reiterated what was stated in  

Susamma  Thomas1 as  regards  determination  of  compensation  in  

accident cases on the basis of multiplier method.  In Trilok Chandra3,  

the Court considered Section 163A and the Second Schedule which  

was not under consideration in Susamma Thomas1   as Section 163A  

was not on the statute when the judgment in Susamma Thomas1  was  

delivered. It was observed that by incorporation of Sections 163A and  

163B in the 1988 Act the situation had undergone a change. Under the  

Second Schedule, the maximum multiplier could be upto 18 and not 16  

as was held in Susamma Thomas1.  In Trilok Chandra3, the maximum  

multiplier was fixed at 18 but the Court did find several defects in the  

calculation of compensation and the amount worked out in the Second  

Schedule.   Importantly  this  Court  stated  in  Trilok  Chandra3 that  

Tribunals  and  the  Courts  cannot  go  by  the  ready  reckoner;  the  

Schedule can only be used as a guide.  This is what this Court said in  

paras 17 and 18 of the Report:

“17.  The situation has now undergone a change with the  enactment of the Motor Vehicles Act, 1988, as amended by  

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Amendment  Act  54  of  1994.  The  most  important  change  introduced  by  the  amendment  insofar  as  it  relates  to  determination of compensation is the insertion of Sections  163-A and 163-B in Chapter XI entitled “Insurance of Motor  Vehicles against  Third Party Risks”.  Section 165-A begins  with  a  non  obstante  clause  and  provides  for  payment  of  compensation, as indicated in the Second Schedule, to the  legal representatives of the deceased or injured, as the case  may be. Now if we turn to the Second Schedule, we find a  table fixing the mode of calculation of compensation for third  party accident injury claims arising out of fatal accidents. The  first column gives the age group of the victims of accident,  the  second  column  indicates  the  multiplier  and  the  subsequent  horizontal  figures  indicate  the  quantum  of  compensation  in  thousand  payable  to  the  heirs  of  the  deceased victim. According to this table the multiplier varies  from 5 to 18 depending on the age group to which the victim  belonged. Thus, under this Schedule the maximum multiplier  can  be  up  to  18  and  not  16  as  was  held  in  Susamma  Thomas case [(1994) 2 SCC 176]. 18. We  must  at  once  point  out  that  the  calculation  of  compensation and the amount worked out in the Schedule  suffer  from several  defects.  For  example,  in  Item 1  for  a  victim aged 15 years, the multiplier is shown to be 15 years  and  the  multiplicand  is  shown  to  be  Rs.  3000.  The  total  should be 3000x15=45,000 but the same is worked out at  Rs. 60,000. Similarly, in the second item the multiplier is 16  and the annual income is Rs. 9000; the total  should have  been Rs. 1,44,000 but is shown to be Rs. 1,71,000. To put it  briefly,  the  table  abounds  in  such  mistakes.  Neither  the  tribunals nor the courts can go by the ready reckoner. It can  only be used as a guide. Besides, the selection of multiplier  cannot in all cases be solely dependant on the age of the  deceased. For example, if the deceased, a bachelor, dies at  the age of 45 and his dependants are his parents, age of the  parents would also be relevant in the choice of the multiplier.  But these mistakes are limited to actual calculations only and  not in respect of other items. What we propose to emphasise  is  that  the  multiplier  cannot  exceed  18  years’  purchase  factor. This is the improvement over the earlier position that  ordinarily it should not exceed 16. We thought it necessary  to state the correct legal position as courts and tribunals are  using  higher  multiplier  as  in  the  present  case  where  the  Tribunal  used  the  multiplier  of  24  which  the  High  Court  raised  to  34,  thereby  showing  lack  of  awareness  of  the  background of the multiplier system in Davies case”.   

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                                          (Emphasis supplied   by us)

14. A three-Judge Bench in Supe Dei (Smt) and others v. National   

Insurance Company Limited and another14 [Civil Appeal No. 2753 of   

2002;  decided on April  16,  2002]  considered the question,  whether  

Second Schedule to the 1988 Act can be made applicable in deciding  

the application for compensation made under Section 166 or not? This  

Court held that the Second Schedule under Section 163A of the 1988  

Act which gives the amount of compensation to be determined for the  

purpose of claim under that Section can be taken as a guideline while  

determining the compensation under Section 166 of the 1988 Act. The  

Second  Schedule  in  terms  does  not  apply  to  a  claim made  under  

Section 166 of the 1988 Act.

15. In  Patricia  Jean  Mahajan5,  this  Court  had  an  occasion  to  

consider  Sections  163A  and  166  of  the  1988  Act.  With  regard  to  

Section  163A,  the  Court  stated,  “the  noticeable  features  of  this  

provision are that it provides for  compensation in the case of death or  

permanent disablement due to  accident arising out of use of motor  

vehicle.  The amount of compensation would be as indicated in the  

Second Schedule.  The claimant is not required to plead or establish  

that the death or permanent disablement was due to any wrongful act  

14  (2009) 4 SCC 513

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or  negligence  or  default  of  the  owner  of  the  vehicle  or  any  other  

person.”   

16.  Then the Court referred to Sections 165 and 166 of the 1988  

Act and observed that a claim under Section 166 did not provide for  

the  amount  of  compensation  according  to  the  Second  Schedule;  

rather Section 168 makes it clear that it is for the tribunal to arrive at  

an amount of compensation which it may consider to be just in the  

facts and circumstances of the case. However, the Court did observe  

that structured formula as provided under Second Schedule would be  

a safe guide to calculate the compensation while dealing with a claim  

made under Section 166.   

17. In  Patricia  Jean  Mahajan5, in  light  of  the  facts  which  

were obtaining in that case, this Court held in paragraphs 19 and 20 of  

the Report (pgs. 294 and 295) as under:

“19.  In  the  present  case  we  find  that  the  parents  of  the  deceased were 69/73 years. Two daughters were aged 17  and 19 years. The main question, which strikes us in this  case  is  that  in  the  given  circumstances  the  amount  of  multiplicand also assumes relevance.  The total  amount  of  dependency as found by the learned Single Judge and also  rightly  upheld  by  the  Division  Bench  comes  to  2,26,297  dollars.  Applying multiplier  of  10,  the amount with  interest  and the conversion rate of Rs 47, comes to Rs 10.38 crores  and with multiplier of 13 at the conversion rate of Rs 30 the  amount  comes  to  Rs  16.12  crores  with  interest.  These  amounts are huge indeed. Looking to the Indian economy,  fiscal  and  financial  situation,  the  amount  is  certainly  a  fabulous  amount  though  in  the  background  of  American  

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conditions it  may not  be so.  Therefore,  where there is so  much of disparity in the economic conditions and affluence  of the two places viz. the place to which the victim belongs  and  the  place  where  the  compensation  is  to  be  paid,  a  golden balance must be struck somewhere,  to arrive at  a  reasonable and fair mesne. Looking by the Indian standards  they may not be much too overcompensated and similarly  not very much undercompensated as well, in the background  of  the country  where most  of  the dependent  beneficiaries  reside. Two of the dependants, namely, parents aged 69/73  years live in India, but four of them are in the United States.  Shri  Soli  J.  Sorabjee  submitted  that  the  amount  of  multiplicand shall surely be relevant and in case it is a high  amount, a lower multiplier can appropriately be applied. We  find force in this submission. Considering all  the facts and  factors as indicated above, to us it appears that application  of  multiplier  of  7  is  definitely  on  the  lower  side.  Some  deviation in the figure of multiplier would not mean that there  may be a wide difference between the multiplier applied and  the  scheduled  multiplier  which  in  this  case  is  13.  The  difference  between  7  and  13  is  too  wide.  As  observed  earlier, looking to the high amount of multiplicand and the  ages of the dependants and the fact  that  the parents are  residing in India, in our view application of multiplier of 10  would be reasonable and would provide a fair compensation  i.e. a purchase factor of 10 years. We accordingly hold that  multiplier  of  10  as  applied  by  the  learned  Single  Judge  should be restored instead of multiplier of 13 as applied by  the Division Bench. We find no force in the submission made  on  behalf  of  the  claimants  that  in  no  circumstances  the  amount of multiplicand would be a relevant consideration for  application of appropriate multiplier. We have already given  our reasons in the discussion held above. 20. The court cannot be totally oblivious to the realities. The  Second  Schedule  while  prescribing  the  multiplier,  had  maximum  income  of  Rs  40,000  p.a.  in  mind,  but  it  is  considered to be a safe guide for applying the prescribed  multiplier in cases of higher income also but in cases where  the gap in income is so wide as in the present case income  is 2,26,297 dollars, in such a situation, it cannot be said that  some  deviation  in  the  multiplier  would  be  impermissible.  Therefore,  a  deviation  from  applying  the  multiplier  as  provided in the Second Schedule may have to be made in  this case. Apart from factors indicated earlier the amount of  multiplicand also becomes a factor to be taken into account  which in this case comes to 2,26,297 dollars, that is to say  

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an amount of around Rs 68 lakhs per annum by converting it  at the rate of Rs 30. By Indian standards it is certainly a high  amount. Therefore, for the purposes of fair compensation, a  lesser  multiplier  can  be  applied  to  a  heavy  amount  of  multiplicand. A deviation would be reasonably permissible in  the figure of multiplier  even according to the observations  made in the case of  Susamma Thomas1 where a specific  example was given about a person dying at the age of 45  leaving no heirs being a bachelor except his parents.”

18. The  noticeable  observations  in  Patricia  Jean  Mahajan5  are  

that, (i) for the purposes of fair compensation, a lesser multiplier can  

be applied to a heavy amount of multiplicand and (2) a deviation would  

be  reasonably  permissible  in  the  figure  of  multiplier  in  appropriate  

cases.  

19. In  Deepal  Girishbhai  Soni  and  others  v.  United  India   

Insurance Co. Ltd., Baroda15, the question that arose for consideration  

before a three-Judge Bench was, whether a proceeding under Section  

163A of the 1988 Act was a final proceeding and the claimant, who  

has been granted compensation under Section 163A, was debarred  

from proceeding with any further claims on the basis of the fault liability  

in terms of Section 166. This Court considered the statutory provisions  

contained  in  the  1988 Act,  including  Sections  163A  and  166.  With  

regard to Section 163A, the Court stated as follows:

“42. Section 163-A was, thus, enacted for grant of immediate  relief to a section of the people whose annual income is not  more than Rs 40,000 having regard to the fact that in terms  

15  (2004) 5 SCC 385

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of Section 163-A of the Act read with the Second Schedule  appended  thereto,  compensation  is  to  be  paid  on  a  structured formula not only having regard to the age of the  victim and  his  income but  also  the  other  factors  relevant  therefor. An award made thereunder, therefore, shall be in  full and final settlement of the claim as would appear from  the  different  columns  contained  in  the  Second  Schedule  appended to the Act. The same is not interim in nature.  . . .  This  together  with  the  other  heads  of  compensation  as  contained in columns 2 to  6 thereof  leaves no manner of  doubt  that  Parliament  intended  to  lay  a  comprehensive  scheme for the purpose of grant of adequate compensation  to  a  section  of  victims  who  would  require  the  amount  of  compensation  without  fighting  any  protracted  litigation  for  proving that the accident occurred owing to negligence on  the part of the driver of the motor vehicle or any other fault  arising out of use of a motor vehicle.

xxx   xxx   xxx

46. Section 163-A which has an overriding effect provides for  special  provisions  as  to  payment  of  compensation  on  structured-formula basis.  Sub-section (1)  of  Section 163-A  contains non obstante clause in terms whereof the owner of  the motor vehicle or the authorised insurer is liable to pay in  the case of death or permanent disablement due to accident  arising out  of  the use of  motor  vehicle,  compensation,  as  indicated in the Second Schedule, to the legal heirs or the  victim, as the case may be. ……..  .  

xxx    xxx   xxx

51.  The  scheme  envisaged  under  Section  163-A,  in  our  opinion, leaves no manner of doubt that by reason thereof  the rights and obligations of the parties are to be determined  finally.  The  amount  of  compensation  payable  under  the  aforementioned provisions is not to be altered or varied in  any  other  proceedings.  It  does  not  contain  any  provision  providing  for  set-off  against  a  higher  compensation  unlike  Section 140. In terms of the said provision, a distinct  and  specified class of citizens, namely, persons whose income  per  annum  is  Rs  40,000  or  less  is  covered  thereunder  whereas  Sections  140  and  166  cater  to  all  sections  of  society. 52. It may be true that Section 163-B provides for an option  to a claimant to either go for a claim under Section 140 or  

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Section 163-A of the Act, as the case may be, but the same  was  inserted  ex  abundanti  cautela so  as  to  remove  any  misconception in the minds of the parties to the lis having  regard to the fact that both relate to the claim on the basis of  no-fault liability. Having regard to the fact that Section 166 of  the Act provides for a complete machinery for laying a claim  on  fault  liability,  the  question  of  giving  an  option  to  the  claimant  to  pursue their  claims both  under  Section  163-A  and Section  166 does not  arise.  If  the  submission  of  the  learned  counsel  is  accepted  the  same  would  lead  to  an  incongruity. xxx xxx xxx”.

20. A two-Judge Bench in  Abati Bezbaruah7  with reference to the  

structured  formula  set  out  in  the  Second  Schedule  in  1988  Act  

observed as follows:-

It is now a well-settled principle of law that the payment of  compensation on the basis of structured formula as provided  for  under  the  Second  Schedule  should  not  ordinarily  be  deviated from. Section 168 of the Motor Vehicles Act lays  down  the  guidelines  for  determination  of  the  amount  of  compensation  in  terms  of  Section  166  thereof.  Deviation  from the structured formula, however, as has been held by  this  Court,  may  be  resorted  to  in  exceptional  cases.  Furthermore,  the  amount  of  compensation  should  be  just  and fair in the facts and circumstances of each case.

21. In  Shanti Pathak8 a three-Judge Bench of this Court in a very  

brief  order  applied  multiplier  of  8  for  a  claim  of  compensation  in  

respect of the deceased who was 25 years at the time of his death.  

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22. In  Oriental Insurance Company Ltd. v. Jashuben and Ors.16,  

two-Judge Bench of this Court applied the multiplier of 13 in a case  

where the age of the deceased was 35 years at the time of accident.    

23. In Sarla Verma (Smt.) and Ors. v. Delhi Transport Corporation   

and Anr.17 , this Court had an occasion to consider the peculiarities of  

Section  163A  of  the  1988  Act  vis-à-vis  Section  166.   The  Court  

reiterated  what  was  stated  in  earlier  decisions  that  the  principles  

relating to determination of liability and quantum of compensation were  

different for claims made under Section 163A and claims made under  

Section  166.   It  was  stated  that  Section  163A  and  the  Second  

Schedule in terms did not apply to determination of compensation in  

applications  under  Section  166.  While  stating  that  Section  163A  

contains a special provision, this Court said:   

“34. . . . . . . Section 163-A of the MV Act contains a special  provision  as  to  payment  of  compensation  on  structured  formula basis, as indicated in the Second Schedule to the  Act. The Second Schedule contains a table prescribing the  compensation to be awarded with reference to the age and  income  of  the  deceased.  It  specifies  the  amount  of  compensation to be awarded with reference to the annual  income range of Rs 3000 to Rs 40,000. It does not specify  the quantum of compensation in case the annual income of  the deceased is more than Rs 40,000. But it provides the  multiplier  to  be  applied  with  reference  to  the  age of  the  deceased. The table starts with a multiplier of 15, goes up  to 18, and then steadily comes down to 5. It also provides  the standard deduction as one-third on account of personal  

16 2008 (4) SCC 162 17 2009 (6) SCC 121

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living  expenses  of  the  deceased.  Therefore,  where  the  application is under Section 163-A of the Act, it is possible  to  calculate  the  compensation  on  the  structured  formula  basis, even where the compensation is not specified with  reference to the annual income of the deceased, or is more  than Rs 40,000, by applying the formula: (2/3 × AI × M),  that  is  two-thirds  of  the  annual  income multiplied  by  the  multiplier applicable to the age of the deceased would be  the compensation. Several principles of tortuous liability are  excluded when the claim is under Section 163-A of the MV  Act.”

24. This  Court,  however,  noticed  discrepancies/errors  in  the  

multiplier scale given in the Second Schedule table and also observed  

that application of table may result in incongruities.  Paras 35 and 36  

(pp. 137) of the Report are as follows:    

“35. There  are  however  discrepancies/errors  in  the  multiplier  scale  given in  the  Second Schedule  table.  It  prescribes  a  lesser  compensation  for  cases  where  a  higher  multiplier  of  18  is  applicable  and  a  larger  compensation  with  reference  to  cases  where  a  lesser  multiplier  of  15,  16,  or  17  is  applicable.  From  the  quantum  of  compensation  specified  in  the  table,  it  is  possible  to  infer  that  a  clerical  error  has  crept  in  the  Schedule and the “multiplier” figures got wrongly typed as  15, 16, 17, 18, 17, 16, 15, 13, 11, 8, 5 and 5 instead of  20, 19, 18, 17, 16, 15, 14, 12, 10, 8, 6 and 5. 36. Another noticeable incongruity is, having prescribed  the notional minimum income of non-earning persons as  Rs  15,000  per  annum,  the  table  prescribes  the  compensation payable even in cases where the annual  income ranges between Rs 3000 and Rs 12,000.  This  leads to an anomalous position in regard to applications  under Section 163-A of the MV Act, as the compensation  will be higher in cases where the deceased was idle and  not  having  any  income,  than  in  cases  where  the  deceased  was  honestly  earning  an  income  ranging  between Rs 3000 and Rs 12,000 per annum. Be that as it  may.”

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25. While  referring  to  the  decisions  of  this  Court  in  New India  

Assurance  Company  Ltd.  v.  Charlie  and  Anr18.,  T.N.  State  Road  

Transport Corporation v. S. Rajapriya and Ors.19  and U.P. State Road  

Transport Corporation  v. Krishna Bala and Ors.20 , this Court in Sarla  

Verma17 in paragraph 39 (pg. 138) of the Report observed as follows:  

“39. In New India Assurance Co. Ltd. v. Charlie this Court  noticed that in respect of claims under Section 166 of the  MV Act, the highest multiplier applicable was 18 and that  the said multiplier should be applied to the age group of 21  to 25 years (commencement of normal productive years)  and the lowest multiplier would be in respect of persons in  the age group of 60 to 70 years (normal retiring age). This  was reiterated in  T.N. State Transport  Corpn. Ltd. v.  S.  Rajapriya and U.P. SRTC v. Krishna Bala.”

26. In  Sarla  Verma17,  this  Court  undertook  the  exercise  of  

comparing  the  multiplier  indicated  in  Susamma Thomas1,  Trilok  

Chandra3 and Charlie18, for claims under Section 166 of the 1988 Act  

with the multiplier mentioned in the Second Schedule  for claims under  

Section 163A (with  appropriate deceleration after 50 years) as follows:  

Age of Deceased Multiplier  Scale as  

envisaged  in  

Susamma  Thomas1

Multiplier  Scale as  adopted  by Trilok  Chandra3

Multiplier  Scale in  Trilok  

Chandra3  as  clarified in  Charlie18

Multiplier  Specified in  

Second Column  in the Table in  

Second  Schedule to the  

Multiplier  actually used in  

Second  Schedule to the  

MV Act (as  seen from the  

18 2005 (10) SCC 720 19 2005(6) SCC 236 20 2006 (6) SCC 249

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MV Act quantum of  compensation)

(1) (2) (3) (4) (5) (6) Upto 15 years - - - 15 20 15 to 20 years 16 18 18 16 19 21 to 25 years 15 17 18 17 18 26 to 30 years 14 16 17 18 17 31 to 35 years 13 15 16 17 16 36 to 40 years 12 14 15 16 15 41 to 45 years 11 13 14 15 14 46 to 50 years 10 12 13 13 12 51 to 55 years 9 11 11 11 10 56 to 60 years 8 10 09 8 8 61 to 65 years 6 08 07 5 6

Above 65 years 5 05 05 5 5

27. In paragraph 42 (pg. 140) of the Report, this Court in  Sarla  

Verma17 laid down that the multiplier shall be used in a given case in  

the following manner:  

      “42.  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,  Trilok Chandra  and Charlie), 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.”   

28. The  above  exercise   was  undertaken   in  Sarla  Verma17 to  

ensure  uniformity and consistency in  the selection of multiplier while  

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awarding compensation in motor accident claims made under Section  

166.    

29. Section 168 of the 1988 Act  provides the  guideline  that the  

amount of compensation shall be awarded by the claims tribunal which  

appears to it to be just.  The expression, ‘just’  means that the amount  

so  determined  is  fair,  reasonable  and  equitable  by  accepted  legal  

standards and not a forensic  lottery.   Obviously ‘just  compensation’  

does  not  mean  ‘perfect’  or  ‘absolute’  compensation.   The  just  

compensation principle requires examination of the particular situation  

obtaining uniquely in an individual case.  

30. Almost a  century back in Taff Vale Railway Co. v. Jenkins21,   

the House of Lords laid down the test that award of damages in fatal  

accident  action  is  compensation  for  the  reasonable  expectation  of  

pecuniary benefit by the deceased’s family. The purpose of award of  

compensation  is  to  put  the  dependants  of  the  deceased,  who had  

been bread-winner of the family, in the same position financially as if  

he  had  lived  his  natural  span  of  life;  it  is  not  designed  to  put  the  

claimants in a better financial position in which they would otherwise  

have been if  the accident  had not  occurred.  At the same time, the  

determination  of  compensation  is  not  an  exact  science  and  the  

exercise involves an assessment based on estimation and conjectures  21  (1913) AC 1

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here  and  there  as  many  imponderable  factors  and  unpredictable  

contingencies have to be taken into consideration.  

31. This Court in C.K. Subramania Iyer and Ors. v. T.Kunhikuttan  

Nair and Ors.22, reiterated the legal philosophy highlighted in Taff Vale  

Railway  21   for award of compensation in claim cases and said that  

there is no exact uniform rule for measuring the value of the human life  

and  the  measure  of  damages  cannot  be  arrived  at  by  precise  

mathematical calculations. Obviously, award of damages in each case  

would depend on the particular facts and circumstances of the case  

but  the  element  of  fairness  in  the  amount  of  compensation  so  

determined is the ultimate guiding factor.

32. In  Susamma Thomas1, this Court – though with reference to  

Section  110B  of  the  Motor  Vehicles  Act,  1939  –  stated  that  the  

multiplier  method  was  the  accepted  norm  of  ensuring  the  just  

compensation  which  will  make  for  uniformity  and  certainty  of  the  

awards.  We  are  of  the  opinion  that  this  statement  in  Susamma  

Thomas1  is equally applicable to the fatal accident claims made under  

Section  166  of  the  1988  Act.   In  our  view,  the  determination  of  

compensation based on multiplier method is the best available means  

and the most satisfactory method and must be followed invariably by  

the tribunals and courts.  22  1970 (2) SCR 688

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33. We have already noticed the table prepared in Sarla Verma17  

for the selection of multiplier. The table has been prepared in  Sarla  

Verma17 having regard to the three decisions of this Court,  namely,  

Susamma  Thomas1,  Trilok  Chandra3   and   Charlie18  for  the  claims  

made under Section 166 of the 1988 Act. The Court said that multiplier  

shown in Column (4) of the table must be used having regard to the  

age of the deceased.  Perhaps the biggest advantage by employing  

the  table  prepared  in  Sarla  Verma17 is  that  the  uniformity  and  

consistency  in  selection  of  the  multiplier  can  be  achieved.  The  

assessment of extent of dependency depends on examination of the  

unique situation of the individual case.  Valuing the dependency or the  

multiplicand  is  to  some  extent  an  arithmetical  exercise.   The  

multiplicand  is  normally  based  on  the  net  annual  value  of  the  

dependency  on  the  date  of  the  deceased’s  death.   Once  the  net  

annual loss (multiplicand) is assessed, taking into account  the age of  

the deceased, such amount is to be multiplied by a ‘multiplier’ to arrive  

at  the  loss  of  dependency.  In  Sarla  Verma17, 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  

Verma17 that  claimants  in  case  of  death  claim for  the  purposes  of  

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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 Verma17.  

34. If the multiplier as indicated in Column (4) of the table read  

with paragraph 42 of the Report in Sarla Verma17 is followed, the wide  

variations in the selection of multiplier in the claims of compensation in  

fatal accident cases can be avoided. A standard method for selection  

of multiplier is surely better than a criss-cross of varying methods. It is  

high time that we move to a standard method of selection of multiplier,  

income  for  future  prospects  and  deduction  for  personal  and  living  

expenses.  The  courts  in   some  of  the  overseas  jurisdictions  have  

made this advance. It is for these reasons, we think we must approve  

the  table  in  Sarla  Verma17  for  the  selection  of  multiplier  in  claim  

applications made under Section 166 in the cases of death.  We do  

accordingly. If for the selection of multiplier, Column (4) of the table in  

Sarla Verma17 is followed, there is no likelihood of the claimants who  

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have chosen to apply under Section 166 being awarded lesser amount  

on proof of negligence on the part of the driver of the motor vehicle  

than those who prefer to apply under Section 163A. As regards the  

cases where the age of the victim happens to be upto 15 years, we are  

of the considered opinion that in such cases irrespective of Section  

163A or Section 166 under which the claim for compensation has been  

made, multiplier of 15 and the assessment as indicated in the Second  

Schedule subject  to correction as pointed out  in  Column (6)  of  the  

table  in  Sarla  Verma17  should  be  followed.  This  is  to  ensure  that  

claimants  in  such cases  are  not  awarded  lesser  amount  when the  

application is made under Section 166 of the 1988 Act. In all  other  

cases of death where the application has been made under Section  

166,  the multiplier  as indicated  in Column (4)  of  the table  in  Sarla  

Verma17 should be followed.   

35. With regard to the addition to income for future prospects, in  

Sarla  Verma17,  this  Court  has  noted  earlier  decisions  in  Susamma  

Thomas1, Sarla Dixit2 and Abati Bezbaruah7 and in paragraph 24 of the  

Report held as under:

“24.……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  

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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.”

36. The standardization of addition to income for future prospects  

shall  help  in  achieving  certainty  in  arriving  at  appropriate  

compensation.   We approve the method  that an addition of 50% of  

actual  salary be made to the actual  salary income of the deceased  

towards future prospects where the deceased had a permanent  job  

and was below 40 years  and the addition should be only 30% if the  

age of the deceased was 40 to 50 years and no addition should be  

made where the age of the deceased is more than 50 years.   Where  

the annual income is in the taxable range, the actual salary shall mean  

actual  salary  less  tax.  In  the  cases  where  the  deceased  was self-

employed  or  was  on  a  fixed  salary  without  provision  for  annual  

increments, the actual income at the time of death without any addition  

to income for future prospects will be appropriate. A departure from the  

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above principle  can only  be justified in  extraordinary  circumstances  

and very exceptional cases.

37. As  regards  deduction  for  personal  and  living  expenses,  in  

Sarla  Verma17,  this  Court  considered  Susamma  Thomas1,  Trilok  

Chandra3  and Fakeerappa23 and finally in paras 30, 31 and 32 of the  

Report held as under:

“30…….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. 31.  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. 32. 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  

23  Fakeerappa and Anr. v. Karnataka Cement Pipe Factory and Others; [(2004) 2 SCC 473]

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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.”

38. 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 dependant members in the  

family  and the  personal  living expenses  of  the  deceased need not  

exactly correspond to the number of dependants.

39. In our view, the standards fixed by this Court in Sarla Verma17  

on the aspect of deduction for personal living expenses in paragraphs  

30, 31 and 32 must ordinarily be followed unless a  case for departure  

in the circumstances noted in the preceding para is made out.

40. In what we have discussed above, we sum up our conclusions  

as follows:

(i) In the applications for compensation made under Section 166  

of the 1988 Act in death cases where the age of the deceased is 15  

years and above,  the Claims Tribunals  shall select the multiplier as  

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indicated in Column (4) of the table prepared in  Sarla Verma17  read  

with para 42 of that judgment.

(ii) In  cases where the age of  the deceased is  upto 15 years,  

irrespective of the Section 166 or Section 163A under which the claim  

for compensation has been made, multiplier of 15 and the assessment  

as indicated in the Second Schedule subject to correction as pointed  

out in Column (6) of the table in Sarla Verma17  should be followed.   

(iii) As  a  result  of  the  above,  while  considering  the  claim  

applications made under Section 166 in death cases where the age of  

the deceased is above 15 years, there is no necessity for the Claims  

Tribunals  to  seek  guidance  or  for  placing  reliance  on  the  Second  

Schedule in the 1988 Act.  

(iv) The  Claims Tribunals  shall  follow the  steps  and  guidelines  

stated in para 19 of Sarla Verma17 for determination of compensation  

in cases of death.  

(v) While  making  addition  to  income  for  future  prospects,  the  

Tribunals shall follow paragraph 24 of the Judgment in Sarla Verma17.  

(vi) Insofar  as  deduction  for  personal  and  living  expenses  is  

concerned, it is directed that the Tribunals shall ordinarily follow the  

standards prescribed in paragraphs 30, 31 and 32 of the judgment in  

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Sarla Verma17  subject to the observations made by us  in para 38  

above.    

(vii) The  above  propositions  mutatis  mutandis shall  apply  to  all  

pending matters where above aspects are under consideration.   

41. The reference is answered accordingly.   Civil  appeals  shall  

now be posted for hearing and disposal before the regular Bench.  

……………………….J.                         (R.M. Lodha)

   ..…..………………...J.          (J. Chelameswar)

                                             .……………………...J.          (Madan B. Lokur)

NEW DELHI APRIL 2, 2013.

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