REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.1923-1924 OF 2011
(Arising out of SLP (Civil) No.16406-16407 of 2010)
Sri. K.R. Madhusudhan & Ors. ...Appellant(s)
Versus
The Administrative Officer & Anr. ...Respondent(s)
J U D G M E N T
GANGULY, J.
1. Delay condoned.
2. Leave granted.
3. On 4.10.1998, at about 8.55 a.m., V.
Rajagopalaiah was crossing the road near Ashraya
Hotel, B.M. Road, Channapatna, when a Maruti Van
(owned by the first respondent) bearing
registration No. KA-05-A-2535 came at a high
speed and dashed against the deceased, causing
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severe injuries. He was taken to hospital, but
he succumbed to his injuries.
4. The deceased was of 53 years of age and was
survived by his wife and three sons, the present
appellants. They filed a claim petition under
Section 166 of the Motor Vehicles Act, 1988
claiming Rs.20,00,000/- as compensation. It was
contested by the respondents.
5. Motor Accident Claims Tribunal (hereinafter
"MACT") found that the death of V. Rajagopalaiah
was due to the rash and negligent driving of the
van driver (the second respondent). The deceased
was working as Senior Assistant in Karnataka
Electricity Board (hereinafter "KEB") and his
last drawn gross monthly salary was Rs.15,642/-
i.e. Rs.1,87,704/- annually. 1/3rd was deducted
for personal expenses, after which the amount
came to Rs.1,25,136/-. As deceased was 53 years
of age, a multiplier of 11 was applied. The
Tribunal also awarded funeral and transport
expenses amounting to Rs.10,000/-, medical
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expenses prior to death was Rs.6,000 and
compensation for loss and affection at
Rs.25,000/-. Accordingly, total compensation
awarded was Rs.14,27,496/- along with interest
of 9% p.a.
6. The appellants and the respondents both appealed
against the award of the Tribunal to the High
Court of Karnataka. The appellants appeared for
enhancement and the respondents for reduction of
the amount awarded. The High Court, in its
impugned judgment, reduced the compensation
awarded by the Tribunal to the appellants to
Rs.11,82,000/-. The relevant portion of High
Court order reads as follows:
"The deceased was working as Senior
Assistant in KEB getting a salary of
Rs.15,642/-. After effecting
deductions towards income tax, the net
salary of the deceased would be
Rs.14,000/-. The mother and sons of
the deceased have filed claim
petition. 1/5 is to be deducted
towards personal expenses. Rs.11,200/-
would enure to the benefit of the
dependants. The deceased was aged
about 52 years. The deceased would
have retired by 58 years. After
superannuation, the deceased would get
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pensionary income in a sum of
Rs.6000/-. 1/5 is to be deducted
towards personal expenses. Rs.4800/-
would enure to the benefit of the
dependants. Split multiplier would
apply. After superannuation,
multiplier 6 would apply. Therefore,
the total loss of dependency before
superannuation would be Rs.8,06,400/-
(Rs.11200 (income) X 12 (months) X 6
(multiplier). The total loss of
dependency from the pensionary income
would be Rs.3,45,600/- (Rs.4800/-
(income) X 12 (months) X 6
(multiplier). The total loss of
dependency would be Rs.11,52,000/- The
petitioners are entitled for a sum of
Rs.25,000/- towards loss of expectancy
and Rs.10,000/- towards funeral
expenses. In all the petitioners are
entitled for a total sum of
Rs.11,82,000/- as against
Rs.14,27,496/- awarded by the
Tribunal. The petitioners are entitled
for interest at 6% p.a."
7. Assailing the same, the appellants contend that
the future prospects of the deceased and
revision in salary were not taken into
consideration by the High Court and a split
multiplier should not have been adopted.
8. The law regarding addition in income for future
prospects has been clearly laid down in Sarla
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Varma (Smt.) & Others v. Delhi Transport
Corporation & Another [(2009) 6 SCC 121] and the
relevant portion reads as follows:
"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 deceased is more than 50 years.
Though the evidence may indicate a
different percentage of increase, it
is necessary to standardize 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."
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9. In the Sarla Verma (supra) judgment the Court
has held that there should be no addition to
income for future prospects where the age of the
deceased is more than 50 years. The learned
Bench called it a rule of thumb and it was
developed so as to avoid uncertainties in the
outcomes of litigation. However, the Bench held
that a departure can be made in rare and
exceptional cases involving special
circumstances. We are of the opinion that the
rule of thumb evolved in Sarla Verma (supra) is
to be applied to those cases where there was no
concrete evidence on record of definite rise in
income due to future prospects. Obviously, the
said rule was based on assumption and to avoid
uncertainties and inconsistencies in the
interpretation of different courts, and to
overcome the same.
10. The present case stands on different factual
basis where there is clear and incontrovertible
evidence on record that the deceased was
entitled and in fact bound to get a rise in
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income in the future, a fact which was
corroborated by evidence on record. Thus, we are
of the view that the present case comes within
the `exceptional circumstances' and not within
the purview of rule of thumb laid down by the
Sarla Verma (supra) judgment. Hence, even though
the deceased was above 50 years of age, he shall
be entitled to increase in income due to future
prospects.
11. We base our conclusion on our findings from the
records of the case. The evidence of PW.1, the
son of the deceased, is that there are four
claimants, three of them are the sons of the
deceased and the other claimant is paternal
grand-mother. Therein, he stated that the
deceased was the only bread earner of the
family. It was stated by PW.1 that if his
father, the deceased, would have been alive he
could have got promotion and could have received
the salary of Rs.20,000/- per month.
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12. PW.3, who was the Senior Assistant in KEB, in
his evidence also stated that the deceased was
52 years of age at the time of his death and he
was having six years of service left. The annual
increment is Rs.350/-. In the year 2003 (which
would have been year of retirement), the basic
pay of the deceased would have been around
Rs.16,000/- and in all he would have obtained
gross salary of Rs.20,000/- per month. PW.3
deposed that as per the Board Agreement for
every five years their pay revision is
compulsory. Both the witnesses were cross-
examined before the Tribunal but the evidence
leading to pay revision was not assailed.
13. Therefore, the consistent evidence before the
Tribunal was that if the deceased would have
been alive he would have reached the gross
salary of Rs.20,000/- per month.
14. In view of this evidence the Tribunal should
have considered the prospect of future income
while computing compensation but the Tribunal
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has not done that. In the appeal, which was
filed by the appellants before the High Court,
the High Court instead of maintaining the amount
of compensation, granted by the Tribunal,
reduced the same. In doing so, the High Court
had not given any reason. The High Court
introduced the concept of split multiplier and
departed from the multiplier used by the
Tribunal without disclosing any reason
therefore. The High Court has also not
considered the clear and corroborative evidence
about the prospect of future increment of the
deceased. When the age of the deceased is
between 51 and 55 years the multiplier is 11,
which is specified in the II Column in the II
Schedule in the Motor Vehicles Act, and the
Tribunal has not committed any error by
accepting the said multiplier. This Court also
fails to appreciate why the High Court chose to
apply the multiplier of 6.
15. We are, thus, of the opinion that the judgment
of the High Court deserves to be set aside for
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it is perverse and clearly contrary to the
evidence on record, for having not considered
the future prospects of the deceased and also
for adopting a split multiplier method.
16. The income of the deceased will be taken to be
Rs.20,000/- p.m. which amounts to Rs.2,40,000/-
p.a. After deduction of 1/3rd amount for personal
expenses, the loss of notional income will be
Rs.1,60,000/-. The multiplier of 11 will be
applied, from which the loss of dependency will
amount to Rs.17,60,000/-. We also award
Rs.10,000/- for funeral and transport expenses,
Rs.6,000/- for medical expenses prior to death
and Rs.25,000/- for loss of love and affection.
Thus, the total compensation awarded amounts to
Rs.18,01,000/- which we round off to
Rs.18,00,000/-.
17. The amount of compensation would thus be
Rs.18,00,000/- with the rate of interest as
granted by the Tribunal. The amount is to be
deposited with the Tribunal within six weeks
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from date after deducting any amount, if already
deposited.
18. The appeals are, thus, allowed. No costs.
.....................J.
(G.S. SINGHVI)
.....................J.
(ASOK KUMAR GANGULY)
New Delhi
February 18, 2011
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