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Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  4001 OF 2014 [Arising out of S.L.P. [C] No.26135/2013]

Smt. Savita … Appellant

Vs.

Bindar Singh & Ors.      … Respondents

J U D G M E N T

Pinaki Chandra Ghose, J.

1. Leave granted.

2. This  appeal  is  directed  against  the  order  dated  April  16,  

2013 passed by the High Court of Uttrakhand affirming the award  

dated December 3, 2012 passed by the Motor Accidents Claims  

Tribunal, Haridwar in Motor Accident Claim Petition No.75/2011.  

The Tribunal directed the respondent – Oriental Insurance Co. Ltd.

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– to pay a sum of 4,28,000/- to the claimant. Being aggrieved by  

the quantum of compensation, this appeal has been filed by the  

appellant-claimant.

3. Briefly the facts of this case are as follows:  

3.1 One Sandeep Chauhan died in an accident on November 26,  

2010 due to rash and negligent driving by the driver of a truck  

bearing  registration  No.HR-56-6047  between  Ram  Nagar  and  

Dhandhera. The claim petition was filed under Section 166 of the  

Motor  Vehicles  Act,  1988  claiming  compensation  against  the  

respondents.

3.2 In  the  claim  petition,  the  appellant/claimant  asked  for  

compensation of  20,20,000/- along with interest at the rate of  

12%  per  annum  from  the  respondents/opposite  parties.  The  

parties filed their pleadings before the Tribunal and the following  

issues were framed:-

“1. Whether on dated 26.11.2010 the motor cycle of  the  deceased  Sandeep  Chauhan  Chasis  no.  MD2DSPAZZTPE51258, Engine no. IBVBTF91396 Model  Discover, Time: at about 10 PM at Malvia Chowk, then a  driver  of  Truck  bearing  registration  No.  HR-56-6047

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brought  from  the  front  side  with  high  speed  and  careless and hit the motor cycle going on the side, due  to which Sandeep Chauhan received many injuries and  due to that injuries and the motor cycle was damaged  and the  injured  Sandeep Chauhan was died  to  while  taking him to the hospital? (sic)

2. Whether  the  motor  used  while  accidence  was  having  insurance,  D.L.,  Fitness  Registration  etc.  and  was permitted to use?(sic)

3. Whether  the  petition  of  the  claimants  is  contaminated from the required facts?

4. Whether  the  claimants  are  entitled  to  compensation. If so, to what amount and from whom?”  

3.3 The Tribunal held that on November 26, 2010, Driver Binder  

Singh  while  driving  Truck  No.  HR-56-6047  with  speed  and  

carelessness  in  the  centre  of  the  road,  hit  the  motorcycle  of  

Sandeep Chauhan,  as a result  of  which Sandeep Chauhan was  

seriously injured and subsequently succumbed to his injuries. The  

issues were also discussed by the Tribunal which further held that  

accidental  vehicle  was  permitted  to  be  driven  with  legal  and  

effective documents and driving licenses.

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3.4 On the issue of compensation the Tribunal after taking into  

account all the facts and materials placed before it, came to the  

conclusion  that  since  the  claimant  could  not  prove  that  the  

deceased was getting  7,000/- per month as salary the Tribunal  

following the principle enunciated in an order of the Uttarakhand  

High Court, held that notional annual income of the deceased was  

36,000/-.  The Tribunal  also followed the principle laid down in  

Smt. Sarla Verma vs. Delhi Transport Corporation1 and held that  

one third share from the notional income of the deceased should  

be deducted as his personal expenses to calculate compensation  

on the basis of the notional annual income of the deceased. The  

Tribunal further held that the deceased’s father, mother and wife  

were dependents on the deceased and they should be treated as  

dependents of the deceased. The multiplier of 17 was fixed by the  

Tribunal considering the age of the deceased who was 26 years of  

age at  the time of  the accident.   After  taking into  account  all  

these aspects, Tribunal came to the conclusion and assessed the  

compensation amount at 4,08,000/- and further granted  5,000/-  

for cremation,  5,000/- for loss of estate and 10,000/- for loss of  

1 (2009) 6 SCC 121

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consortium  and  thereby  the  compensation  amount  was  

determined at  4,28,000/- and also directed that interest to be  

paid  at  the  rate  of  6% per  annum on  the  total  compensation  

amount  from the  date  of  filing  of  the  petition  till  the  date  of  

decision.  

3.5 Being aggrieved, an appeal was filed before the High Court.  

The High  Court  dismissed  the  said  appeal  on  the  ground that  

there was no illegality in the award passed by the Tribunal. Hence  

this appeal has been filed.

4. We have heard the learned counsel for the parties.  It  has  

been pointed out by the learned counsel for the appellant that the  

said award is wrong on the ground that a salary certificate has  

been  produced  before  the  Tribunal  and  the  Tribunal  has  not  

accepted the  same without  any  reason.  She further  submitted  

that the compensation which has been granted by the Tribunal  

and  affirmed  by  the  High  Court  does  not  include  the  future  

prospects which should have been added to the claim and further  

the  deduction  with  regard  to  the  personal  expenses  could  not  

have been made more than one tenth of the total salary received

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by  the  victim.  In  support  of  such  contention,  she  relied  upon  

Santosh  Devi  v.  National  Insurance  Company  Ltd.  &  Ors.2 and  

further  submitted  that  compensation  under  the  head  ‘loss  of  

consortium’ has not been properly assessed by the said Tribunal  

which has been assessed by this Court in Rajesh vs. Rajbir Singh3  

and  the  compensation  under  the  said  head  should  have  been  

awarded for a sum of  1,00,000/-. She further submitted that the  

compensation  under  the  head  ‘funeral  expenses’  should  have  

been granted as  25,000/- and in support of her such contention,  

she relied upon the aforementioned decisions. On the contrary, it  

has been stated on behalf of the respondents that in Sarla Verma  

(supra), the principles laid down by this Court have been followed  

by the Tribunal and therefore there is no reason to interfere with  

the award passed by the Tribunal and the appeal dismissed by  

the High Court.  

5. This Court in Santosh Devi (supra), held as follows:  

“14. We  find  it  extremely  difficult  to  fathom  any  rationale for the observation made in paragraph 24 of  the  judgment  in  Sarla  Verma's  case  that  where  the  

2 (2012) 6 SCC 421 3 (2013) 9 SCC 54

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deceased was self-employed or was on a fixed salary  without provision for annual increment, etc., the Courts  will usually take only the actual income at the time of  death and a departure from this rule should be made  only  in  rare  and  exceptional  cases  involving  special  circumstances. In our view, it will be nave to say that  the wages or total emoluments/income of a person who  is self-employed or who is employed on a fixed salary  without  provision  for  annual  increment,  etc.,  would  remain the same throughout his life.  

15. The  rise  in  the  cost  of  living  affects  everyone  across  the  board.  It  does  not  make  any  distinction  between rich and poor. As a matter of fact, the effect of  rise in prices which directly impacts the cost of living is  minimal  on the rich  and maximum on those who are  self-employed  or  who  get  fixed  income/emoluments.  They are the worst affected people. Therefore, they put  extra  efforts  to  generate additional  income necessary  for sustaining their families.

*** *** ***

18. Therefore, we do not think that while making the  observations in the last three lines of paragraph 24 of  Sarla Verma's judgment, the Court had intended to lay  down an absolute rule that there will be no addition in  the income of a person who is self-employed or who is  paid fixed wages. Rather, it would be reasonable to say  that  a person who is  self-employed or  is  engaged on  fixed wages will also get 30 per cent increase in his total  income over a period of time and if he / she becomes  victim of accident then the same formula deserves to be  applied for calculating the amount of compensation.”

6. After considering the decisions of this Court in Santosh Devi  

(supra) as well as  Rajesh v. Rajbir Singh (supra),  we are of  the

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opinion that it is the duty of the Court to fix a just compensation.  

At  the time of  fixing such compensation,  the court  should  not  

succumb  to  the  niceties  or  technicalities  to  grant  just  

compensation in favour of the claimant. It is the duty of the court  

to  equate,  as  far  as  possible,  the  misery  on  account  of  the  

accident  with  the  compensation  so  that  the  injured  or  the  

dependants  should  not  face  the  vagaries  of  life  on  account  of  

discontinuance of the income earned by the victim. Therefore, it  

will be the bounden duty of the Tribunal to award just, equitable,  

fair and reasonable compensation judging the situation prevailing  

at that point of time with reference to the settled principles on  

assessment of damages. In doing so, the Tribunal can also ignore  

the  claim  made  by  the  claimant  in  the  application  for  

compensation with the prime object to assess the award based on  

the principle that the award should be just,  equitable,  fair  and  

reasonable compensation.  

7. In the instant case, it appears that the Tribunal and the High  

Court have also failed to consider the fact-situation of this case,  

without  taking  any  pragmatic  view  and  further  without

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considering the price-index prevailing at the moment, assessed  

the compensation ignoring the principle laid down by this Court in  

the recent decisions (see:  Rajesh v. Rajbir Singh (supra) as also  

Santosh Devi (supra)) and without revisiting the present situation,  

came to the conclusion and awarded the total compensation for a  

sum of           4,28,000/-. In our opinion, such award suffers from  

proper assessment of compensation awarded by the Tribunal, and  

High Court on the conventional heads, i.e., ‘loss of consortium’ to  

the spouse,  ‘future prospects of the deceased’  and further  the  

sum awarded under the head ‘funeral expenses’, cannot be said  

to be a just compensation. In our opinion, there should have been  

an endeavour on the part of the Tribunal as well as the High Court  

to  consider  the  inflation  factor  and  further  they  should  have  

considered the amounts fixed by the court several decades ago  

on such heads. Accordingly, as has been pointed out by this Court  

in Rajesh v. Rajbir Singh (supra), we hold that the compensation  

under the head ‘loss of consortium’ to the spouse, loss of love,  

care  and  guidance  to  children  and  funeral  expenses  amounts  

should  have  been  awarded  under  such  heads,  that  is,  for   

1,00,000/-  and  25,000/-  respectively  and  we  award  such

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compensation under the said heads. So far as the head of ‘salary’  

is concerned, we do not express any opinion since we have found  

that the appellant could not prove the salary certificate and for  

such  reason,  we  do  not  intend  to  interfere  with  the  opinion  

expressed by the Tribunal on the established principle of notional  

income  and  accordingly,  we  do  not  want  to  disturb  the  said  

notional  income  while  calculating  the  total  compensation  in  

favour of the appellant.  

8. We have failed to understand why the Tribunal as well as the  

High Court lost its sight to hold that the victim could have had  

future prospects with regard to the amounts the victim used to  

earn  during  his  life-time?  Therefore,  the  notional  income  also  

needs to be increased by at least 30% and thereby the claimant is  

entitled to get the benefit of  900/- being the future prospects;  

the said amount should be added to the notional income of the  

victim. Therefore, it appears that the total salary along with future  

prospects of the victim should have been calculated at   3,000/-  

plus  900/- amounting to  3,900/- per month. The total deduction  

on personal expenses, in our opinion, should have been one third

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of   3,900/-  amounting  to   1,300/-.  Therefore,  salary  after  

deduction would come to   2,600/- and the multiplier should be  

applied at 17, as has been done correctly by the Tribunal after  

taking into account the age of the victim. In this process, the total  

amount of compensation to be paid would be   2,600 x 17 x 12  

amounting to 5,30,400/-.  

9. We modify  and  reassess  the  compensation  in  accordance  

with the Calculation Table set out hereunder:  

CALCULATION TABLE

Salary  (Since  it  is  not  proved  sufficiently  as  per  the  order  of  the Tribunal)

3,000/- per month  

Future prospects (at the rate of  30% as prayed for) (as per para  8)

[30% of  3,000 =  900/-] Salary is (3,000+ 900) =           3,900/-

Deduction  towards  personal  expenses (as  per  Schedule II)

1/3rd  of   3,900 =  1,300/-

Total  salary  after  adding  future  prospects  and  deducting  personal expenses

3,900 –   1,300 =   2,600/-

Multiplier i.e. 17 (as per Schedule  II and Section166)

2,600 x 17 x 12 =    5,30,400/-

Total  amount  of  compensation  (as per para 8)

5,30,400/-

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Compensation under the head of  “loss of consortium” (as per para  7)

1,00,000/-

Compensation under the head of  ‘funeral expense’ (as per para 7)

25,000/-  

Grand Total  6,55,400/- 10. The order of  the High Court and Tribunal  is  modified.  We  

direct  that  the  claimant/appellant  is  entitled  to  a  sum  of   

6,55,400/- plus interest @ 8 per cent per annum from the date of  

filing  of  the  claim  petition  till  the  date  of  payment  as  

compensation. Accordingly, we direct that the enhanced amount  

should  be  paid  to  the  appellant  after  deducting  the  amount  

already paid,  within a period of four weeks from date.  For the  

reasons stated hereinabove, the appeal is partly allowed.  

…....……………………..J. (Gyan Sudha Misra)

New Delhi;                                                         ......... …………………….J. March 25, 2014.                                       (Pinaki Chandra   Ghose)

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