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Monday, January 22, 2018

The High Court has partly allowed the appeal of the insurer and reduced the award of compensation by the Motor Accident Claims Tribunal from Rs 61,55,000/- to Rs 26,45,000/-.= In terms of the judgment of the Constitution Bench of this Court in National Insurance Company Limited v Pranay Sethi1 and the judgment in Sarla Verma v Delhi Transport Corporation2 , the correct multiplier to be applied in the present case would be 17 having regard to the age of the deceased. As regards future prospects, an addition of 50 per cent would be warranted. On the above basis and making a deduction of 50 per cent towards personal expenses (the deceased being a bachelor), the total compensation would stand quantified at Rs 61,20,000/-. After making an addition on account of conventional heads, the total compensation would stand computed at Rs 61,90,000/-. The aforesaid amount shall carry interest @ 9% p.a. from the date of the filing of the claim petition. Apportionment shall be carried out in terms of the award of the Tribunal. RAMRAO LALA BORSE AND ANR ..Appellants VERSUS NEW INDIA ASSURANCE COMPANY LTD. AND ANR ..Respondents

1

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO 418 OF 2018
[Arising out of SLP(C) No.7375 of 2017]
RAMRAO LALA BORSE AND ANR ..Appellants
VERSUS
NEW INDIA ASSURANCE COMPANY
LTD. AND ANR ..Respondents
J U D G M E N T
Dr D Y CHANDRACHUD, J
1 The present appeal arises from a judgment and order of a Division
Bench of the High Court of Judicature at Bombay dated 23 October 2015.
The High Court has partly allowed the appeal of the insurer and reduced the
award of compensation by the Motor Accident Claims Tribunal from Rs
61,55,000/- to Rs 26,45,000/-.
2 The claim before the Tribunal arose thus:
On 19 February 2006, Deepak was travelling as a passenger in a luxury bus
on Mumbai-Agra road and was occupying a seat on the driver’s side. When
the bus was at Atgaon in Nashik district, a truck bearing Registration
No.RJ-01-G-6386 came from the opposite direction and collided with the bus
REPORTABLE
2
resulting in grievous injuries to the passengers including Deepak. Deepak
was shifted to the Government hospital at Nashik where he succumbed to his
injuries.
3 At the time of the accident, the deceased was serving as an Assistant
Teacher in Dadasaheb Dandekar Vidyalaya, a school run by Shishu Vihar
Education Society. The claimants, who were his parents, filed a claim under
Section 166 of the Motor Vehicles Act 1988 seeking compensation against the
owner of the offending truck and the insurer. The Tribunal held that the
accident was caused due to the rash and negligent act of the driver of the
offending truck. The Tribunal accepted the evidence adduced by the
Claimants that had the deceased survived, he would have been made
permanent and would have been entitled to the benefit of 6th Pay Commission
wages of at least Rs 40,000 per month. Adopting a multiplier of 17, the
Tribunal awarded compensation of Rs 61,20,000/- to which it added a further
sum of Rs 35,000/- under conventional heads. Interest was awarded @9%
p.a.
4 The High Court, on an analysis of the evidence, confirmed the finding of
negligence arrived at by the Tribunal. On compensation, the High Court noted
that the salary certificate (Exh.42) dated 18 March 2013 indicated that the
deceased was working as an Assistant Teacher on a temporary basis in the
secondary section of Shishu Vihar Education Society between June 2001 and
3
February 2006. The income certificate indicated that in February 2006 the
deceased was in receipt of a salary of Rs 2,800 per month. Another
certificate issued by the Headmaster on 20 March 2006 (Exh.47) indicated the
same position.
5 The case of the claimants rested on the premise that the deceased was
likely to be made permanent in which event, he would be entitled to a higher
salary. PW 3, who was the Secretary of the Trust, deposed that though the
strength of the students had increased, and the workload had increased,
persons such as the deceased continued in service on a contract basis for
want of sanction from the government for the post. The High Court observed
that the evidence of PW 3 was that if the government were to sanction the
post, considering the seniority and experience of the deceased, the Trust
would have appointed him as a permanent teacher in which event his salary,
according to the scales of the 6th Pay Commission, would have been Rs
40,000 per month. The finding was that the deceased at the relevant time was
29 years of age; that he had completed his B.Ed. from the University of
Mumbai and was an Assistant Teacher employed on a temporary/contract
basis for teaching English from 2001 to 2006. The High Court adverted to the
provisions contained in the Maharashtra Employees of Private Schools
(Conditions of Service) Regulation Act, 1977. In this background, the High
Court arrived at the finding that if the deceased were to be alive, he would
have been regularized and would have drawn a salary of Rs 40,000/- per
4
month. The High Court held that an addition of 50 per cent on account of
future prospects ought to have been made. However, the High Court held
that the Tribunal erred in applying a multiplier of 17. Having regard to the fact
that the father of the deceased was 65 years old in 2006 and his mother was
50 years old, the High Court came to the conclusion that a multiplier of 7
should be adopted, taking the average age of the parents as 61 years. The
High Court held that since the deceased was a bachelor, a deduction of 50
per cent should be made on account of personal expenses. On the above
basis, the High Court computed the yearly income of the deceased at Rs
4,80,000; enhanced the income by 50% on the ground of future prospects to
Rs 7,20,000, deducted a sum of Rs 3,60,000 towards personal expenses and
on the basis of a multiplier of 7 arrived at a total compensation of
Rs 25,20,000. The amount payable to each of the two claimants for loss of
love and affection was enhanced to Rs 50,000 and funeral expenses of Rs
25,000 were allowed. The High Court has, accordingly, awarded a total
compensation of Rs 26,45,000 together with interest @ 9% p.a.
6 The principal ground which has been urged in support of the appeal is
that the High Court erred in applying a multiplier of 7. Since the age of the
deceased at the time of the accident was 29 years, it was urged that the
correct multiplier to be applied would be 17.
5
7 The insurer had challenged the judgment of the High Court before this
Court in Special Leave Petition (C ) No 7717 of 2016. The Special Leave
Petition was dismissed on 25 April 2016. The challenge of the insurer to the
judgment of High Court has hence failed. Consequently, for the purpose of
the present appeal, we will have to proceed on the basis of the income as
accepted by the High Court. The finding of fact in regard to the income of the
deceased would not be challenged in the present appeal, at the behest of the
insurer in view of the above background.
8 In terms of the judgment of the Constitution Bench of this Court in
National Insurance Company Limited v Pranay Sethi1 and the judgment in
Sarla Verma v Delhi Transport Corporation2
, the correct multiplier to be
applied in the present case would be 17 having regard to the age of the
deceased. As regards future prospects, an addition of 50 per cent would be
warranted. On the above basis and making a deduction of 50 per cent
towards personal expenses (the deceased being a bachelor), the total
compensation would stand quantified at Rs 61,20,000/-. After making an
addition on account of conventional heads, the total compensation would
stand computed at Rs 61,90,000/-. The aforesaid amount shall carry interest
@ 9% p.a. from the date of the filing of the claim petition. Apportionment shall
be carried out in terms of the award of the Tribunal.
1 (2017) 13 SCALE 12
2 (2009) 6 SCC 121
6
9 The appeal shall accordingly stand allowed. There shall be no order as
to costs.
...........................................CJI
 [DIPAK MISRA]
 ...........................................J
 [A M KHANWILKAR]
 ...........................................J
 [Dr D Y CHANDRACHUD]
New Delhi;
January 19, 2018 

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