1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.2705 OF 2020
(arising out of SLP (Civil) No. 28548 of 2014)
United India Insurance Co. Ltd. …Appellant
versus
Satinder Kaur @ Satwinder Kaur & Ors. …Respondents
WITH
CIVIL APPEAL NO.2706 OF 2020
(arising out of SLP (Civil) No. 12520 of 2015)
Satinder Kaur @ Satwinder Kaur & Ors. …Appellants
versus
United India Insurance Co. Ltd. …Respondent
J U D G M E N T
INDU MALHOTRA, J.
Leave granted.
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1. The deceased – Satpal Singh was residing in Doha, Qatar
since 1984. The Employment Contract Form of the deceased
dated 21.08.1984 revealed that he was engaged as a labourer
initially for a period of one year on a salary of 750 Qatari
Riyal p.m., and continued to live in Qatar where he was
employed, till he passed away in a motor vehicle accident in
India in 1998.
2. Satpal Singh was visiting India in November, 1998. On
18.11.1998, he was riding a scooter, with his wife as the
pillion rider, when he met with an accident with a Maruti car
bearing No. CH-01-M-6284 coming from the opposite
direction.
FIR No. 204 dated 18.11.1998 was lodged u/S. 304A,
279, 337, 427 IPC at P.S. Sadar, Rajpura against the driver
and owner of the offending car.
The FIR was lodged on the statement of Satinder Kaur –
widow of the deceased, wherein she had stated that the
accident had occurred due to the rash and negligent driving
of the driver of the Maruti car. It was further stated that the
accident took place while her husband was over-taking a
tractor-trolley, when the Maruti car was coming at a high
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speed from the opposite side. This led to the accident, and
caused the death of Satpal Singh on the spot.
The Claimant No. 1 i.e. wife of the deceased was also
seriously injured. Her right leg and jaw were fractured. The
Claimant No. 1 remained in hospital for over a month. A rod
was inserted in her leg, and remained in plaster for about 7
to 8 months. The accident led to 25% permanent disability,
which is borne out from the Disability Certificate issued by
the Civil Surgeon, Patiala.
3. Claim Petition bearing M.A.C. Application No. 152 was filed
before the MACT, Patiala (Punjab) on 24.12.1998 u/S. 166 of
the Motor Vehicles Act, 1988 by the widow of the deceased,
on behalf of herself and her 3 minor children for
compensation on the death of her husband. The Claimants
prayed for compensation of Rs. 50 lacs, alongwith Interest
@18% p.a. to be paid jointly and severally by the Insurance
Company, and the driver and owner of the Maruti car.
3.1. A copy of the FIR was placed before the MACT, as also
the Post Mortem Report which recorded the serious
head injuries caused by the road accident on the
deceased.
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3.2. The Claimants filed a photocopy of the Employment
Contract Form dated 10.07.1984 certified by the
Indian Embassy at Doha, which records the
engagement of the deceased as a labourer by the firm
Ali Al Fayyad Trading Contracting Est., Doha on a
salary of 750 Qatari Riyal p.m., when he first shifted to
Qatar.
3.3. The Claimants also placed on record a letter dated
27.06.1997 purported to have been issued by his
employer – the High Speed Group to the Counsellor,
New Zealand Consulate for issuance of a visa. It was
stated that the General Manager of their company, Mr.
Satpal Harbans Singh was intending to spend his
annual vacation during June – August 1997 in New
Zealand, and had been employed by this organization
since 1984, and was now drawing a salary of $ 6,700
p.m.
It is relevant to note that this letter was not
attested by the Indian Embassy at Doha.
3.4. The Claimants placed on record the Passport of the
deceased, which reveals his date of birth as
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10.08.1958. The deceased was a little over 40 years of
age at the time of the accident.
The passport entries reveal frequent foreign travel
during the period 1986 till 1998 when he expired.
4. The MACT vide Award dated 30.03.2001 held that a perusal
of the first statement made by Claimant No. 1 – widow of the
deceased in the FIR, revealed that her husband was overtaking a tractor–trolley when the accident occurred, because
the Maruti car was coming at a high speed from the opposite
side. Consequently, the MACT held that it was a case of
contributory negligence on the part of the deceased Satpal
Singh, as also on the part of the driver of the Maruti car.
4.1. The MACT applied the multiplier of 13, since the
deceased was a little over 40 years of age at the time of
his death.
4.2. With respect to the income of the deceased, the MACT
held that the letter dated 27.06.1997 issued by the
High Speed Group, had not been proved by the
Claimants, nor was it attested by the Indian Embassy
at Doha, and therefore refused to take it into
consideration.
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4.3. The MACT assumed that the income of the deceased
Satpal Singh should be assessed just as an ordinary
skilled worker, and assessed his income at Rs. 4,000
p.m. The amount of dependency was taken as Rs.
2,500 p.m. x 12 x 13 = Rs. 3.90 lacs. Since it was a
case of contributory negligence, the compensation was
reduced by 50%, which worked out to Rs. 1.80 lacs. An
amount of Rs. 10,000 was awarded towards funeral
expenses.
The compensation of Rs. 1,90,000 would carry
Interest @9% p.a. from the date of filing the claim, till
the date of payment.
4.4. The MACT held all three respondents i.e. the driver of
the Maruti car, the owner of the car, and the Insurance
Company liable to pay the compensation awarded,
jointly and severally.
5. Aggrieved by the aforesaid Judgment, the Claimants filed an
Appeal being F.A.O. No. 2294/2001 before the High Court for
further enhancement.
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5.1. The High Court vide the impugned Judgment and
Order dated 10.03.2014 upheld the findings of the
MACT regarding contributory negligence.
5.2. With respect to the income of the deceased, the High
Court proceeded on the basis of the letter dated
27.06.1997 issued by the High Speed Group, , wherein
it was stated that Satpal Singh was working as a
General Manager, and drawing a salary of $ 6,700 p.m.
which would be equivalent to Rs. 2,68,000 p.m. at the
time when the claim was filed.
5.3. The High Court assessed the compensation on the
basis of the income at Rs. 2,68,000 p.m. and adopted
the multiplier of 12.
The contribution to the family was fixed at 50% of
his income, which would approximately be Rs.
1,34,000 p.m.
Rs. 50,000 was awarded towards loss of estate,
and Rs. 10,000 towards funeral expenses.
On this basis, the total compensation payable to
the Claimants was computed at Rs. 96,78,000 after
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making a partial abatement of 50% towards
contributory negligence.
The High Court held that since 50% of the income
was provided to the wife and children, it was not
necessary to provide for loss of consortium, and loss of
love and affection.
5.4. The High Court held the Insurance Company to be
liable to pay the compensation, which would be
distributed equally between the widow and children of
the deceased. The enhanced amount of compensation
would carry Interest @7.5% p.a. from the date of filing
the claim, till realization.
6. The Appellant – Insurance Company filed SLP (Civil) No.
28548/2014 to challenge the impugned Judgment.
The Claimants also filed an SLP bearing SLP (Civil) No.
12520/2015 claiming further enhancement of compensation.
7. We have perused the pleadings and the documentary
evidence placed on record before the Courts below, and have
considered the oral submissions made by the Counsel for the
parties.
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We are of the view that the judgments of both the MACT
and the High Court are liable to be set aside, and the
compensation is required to be awarded in accordance with
the law expounded by this Court in various decisions.
8. Relevant principles for assessment of compensation in
cases of death as evolved by judicial dicta.
The criteria which are to be taken into consideration for
assessing compensation in the case of death, are : (i) the age
of the deceased at the time of his death; (ii) the number of
dependants left behind by the deceased; and (iii) the income
of the deceased at the time of his death.
In Sarla Verma & Ors. v. Delhi Transport Corporation &
Anr.,
1 this Court held that to arrive at the loss of dependency,
the tribunal ought to take into consideration three factors :–
i) Additions/deductions to be made for arriving at the
income;
ii) The deduction 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.
1 (2009) 6 SCC 121.
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In order to provide uniformity and consistency in
awarding compensation, the following steps are required to be
followed :–
“Step 1 (Ascertaining the multiplicand)
The income of the deceased per annum should be determined.
Out of the said income a deduction should be made in regard to
the amount which the deceased would have spent on himself
by way of personal and living expenses. The balance, which is
considered to be the contribution to the dependant family,
constitutes the multiplicand.
Step 2 (Ascertaining the multiplier)
Having regard to the age of the deceased and period of active
career, the appropriate multiplier should be selected. This does
not mean ascertaining the number of years he would have lived
or worked but for the accident. Having regard to several
imponderables in life and economic factors, a table of
multipliers with reference to the age has been identified by this
Court. The multiplier should be chosen from the said table with
reference to the age of the deceased.
Step 3 (Actual calculation)
The annual contribution to the family (multiplicand) when
multiplied by such multiplier gives the 'loss of dependency' to
the family. Thereafter, a conventional amount in the range of
Rs. 5,000/- to Rs. 10,000/- may be added as loss of estate.
Where the deceased is survived by his widow, another
conventional amount in the range of 5,000/- to 10,000/- should
be added under the head of loss of consortium. But no amount
is to be awarded under the head of pain, suffering or hardship
caused to the legal heirs of the deceased.
The funeral expenses, cost of transportation of the body (if
incurred) and cost of any medical treatment of the deceased
before death (if incurred) should also added.”
(emphasis supplied)
(a) Deduction for personal and living expenses
The personal and living expenses of the deceased should
be deducted from the income, to arrive at the contribution to
the family. In Sarla Verma (supra) (paras 30, 31 and 32), this
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Court took the view that it was necessary to standardize the
deductions to be made under the head personal and living
expenses of the deceased.
Accordingly, it was held that :
where the deceased was married, the deduction
towards personal and living expenses should be 1/3rd
if the number of dependant family members is two to
three;
1/4th if the number of dependant family members is
four to six; and
1/5th if the number of dependant family members
exceeds six.
If the deceased was a bachelor, and the claim was
filed by the parents, the deduction would normally be
50% as personal and living expenses of the bachelor.
Subject to evidence to the contrary, the father was
likely to have his own income, and would not be
considered to be a dependant. Hence, the mother
alone will be considered to be a dependant.
In the absence of any evidence to the contrary,
brothers and sisters of the deceased bachelor would
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not be considered to be dependants, because they
would usually either be independent and earning, or
married, or dependant on the father.
Thus, even if the deceased was survived by
parents and siblings, only the mother would be
considered to be a dependant. The deduction towards
personal expenses of a bachelor would be 50%, and
50% would be the contribution to the family.
However, in a case where the family of the bachelor
was large and dependant on the income of the
deceased, as in a case where he had a widowed
mother, and a large number of younger non-earning
sisters or brothers, his personal and living expenses
could be restricted to 1/3rd, and contribution to the
family be taken as 2/3rd.
A three-judge bench in Reshma Kumari & Ors. v. Madan
Mohan & Anr.,
2 affirmed the standards fixed in Sarla Verma
(supra) with respect to the deduction for personal and living
expenses, and held that these standards must ordinarily be
2 (2013) 9 SCC 65.
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followed, unless a case for departure is made out. The Court
held :
“41. 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.
42. In our view, the standards fixed by this Court in Sarla
Verma 2009 (6) SCC 121 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.”
43. In what we have discussed above, we sum up our
conclusions as follows:
…
43.6. 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 Sarla Verma 2009 (6) SCC 121 subject to the
observations made by us in para 38 above. …”
(emphasis supplied)
A Constitution Bench of this Court in National Insurance
Co. Ltd. v. Pranay Sethi & Ors.,
3 held that the standards fixed
in Sarla Verma (supra) would provide guidance for
appropriate deduction towards personal and living expenses,
and affirmed the conclusion in para 43.6 of Reshma Kumari
(supra).
3 (2017) 16 SCC 680.
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(b) Determination of Multiplier
With respect to the multiplier, the Court in Sarla Verma
(supra), prepared a chart for fixing the applicable multiplier
in accordance with the age of the deceased, after considering
the judgments in General Manager, Kerala S.R.T.C.,
Trivandrum v. Susamma Thomas & Ors.,
4 U.P.S.R.T.C. & Ors.
v. Trilok Chandra & Ors.,
5 and New India Assurance Co. Ltd.
v. Charlie & Ors.
6
The relevant extract from the said chart i.e. Column 4
has been set out hereinbelow for ready reference :–
Age of the deceased Multiplier (Column 4)
Upto 15 years -
15 to 20 years 18
21 to 25 years 18
26 to 30 years 17
31 to 35 years 16
36 to 40 years 15
41 to 45 years 14
46 to 50 years 13
51 to 55 years 11
56 to 60 years 9
61 to 65 years 7
Above 65 years 5
The Court in Sarla Verma (supra) held :–
“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),
4 (1994) 2 SCC 176.
5 (1996) 4 SCC 362.
6 (2005) 10 SCC 720.
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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.”
(emphasis supplied)
In Reshma Kumari (supra), this Court affirmed Column 4
of the chart prepared in Sarla Verma (supra), and held that
this would provide uniformity and consistency in determining
the multiplier to be applied. The Constitution Bench in
Pranay Sethi (supra) affirmed the chart fixing the multiplier
as expounded in Sarla Verma (supra), and held :–
“44. At this stage, we must immediately say that insofar as the
aforesaid multiplicand/multiplier is concerned, it has to be
accepted on the basis of income established by the legal
representatives of the deceased. Future prospects are to be
added to the sum on the percentage basis and “income” means
actual income less than the tax paid. The multiplier has already
been fixed in Sarla Verma which has been approved in Reshma
Kumari with which we concur.
…
59.6. The selection of multiplier shall be as indicated in the
Table in Sarla Verma read with paragraph 42 of that
judgment.”
(emphasis supplied)
(c) Age of the deceased must be the basis for determining
the multiplier even in case of a bachelor.
In Sarla Verma (supra), this Court held that the
multiplier should be determined with reference to the age of
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the deceased. This was subsequently affirmed in Reshma
Kumari (supra), and followed in a line of decisions.
A three-judge bench in Munna Lal Jain & Ors. v. Vipin
Kumar Sharma & Ors.,
7 held that the issue had been decided
in Reshma Kumari (supra), wherein this Court held that the
multiplier must be with reference to the age of the deceased.
The decision in Munna Lal Jain (supra) was followed by
another three-judge bench of this Court in Sube Singh & Ors.
v. Shyam Singh (dead) & Ors.8
The Constitution Bench in National Insurance Company
Limited v. Pranay Sethi & Ors.,
9 affirmed the view taken in
Sarla Verma (supra) and Reshma Kumari (supra), and held
that the age of the deceased should be the basis for applying
the multiplier.
Another three-judge bench in Royal Sundaram Alliance
Insurance Co. Ltd. v. Mandala Yadagari Goud & Ors.,
10 traced
out the law on this issue, and held that the compensation is
to be computed based on what the deceased would have
contributed to support the dependants. In the case of the
death of a married person, it is an accepted norm that the
7 (2015) 6 SCC 347.
8 (2018) 3 SCC 18.
9 (2017) 16 SCC 680.
10 (2019) 5 SCC 554.
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age of the deceased would be taken into account. Thus, even
in the case of a bachelor, the same principle must be applied.
The aforesaid legal position has recently been re-affirmed
by this Court in Sunita Tokas and Ors. v. New India
Insurance Co. Ltd. and Ors.11
(d) Future Prospects
In the wake of increased inflation, rising consumer
prices, and general standards of living, future prospects have
to be taken into consideration, not only with respect to the
status or educational qualifications of the deceased, but also
other relevant factors such as higher salaries and perks
which are being offered by private companies these days. The
dearness allowance and perks from which the family would
have derived monthly benefit, are required to be taken into
consideration for determining the loss of dependency.
In Sarla Verma (supra), this Court held :
“24. In Susamma Thomas, this Court increased the income by
nearly 100%, in Sarla Dixit, the income was increased only by
50% and in Abati Bezbaruah the income was increased by a
mere 7%. In view of 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
11 2019 (11) SCALE 24.
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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 calculations 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.”
(emphasis supplied)
In Pranay Sethi (supra), the Constitution Bench
evaluated all the judicial precedents on the issue of future
prospects including Sarla Verma (supra), and devised a fixed
standard for granting future prospects. It was held :
“57. Having bestowed our anxious consideration, we are
disposed to think when we accept the principle of
standardization, there is really no rationale not to apply the
said principle to the self-employed or a person who is on a fixed
salary. To follow the doctrine of actual income at the time of
death and not to add any amount with regard to future
prospects to the income for the purpose of determination of
multiplicand would be unjust. The determination of income
while computing compensation has to include future prospects
so that the method will come within the ambit and sweep of just
compensation as postulated Under Section 168 of the Act. In
case of a deceased who had held a permanent job with inbuilt
grant of annual increment, there is an acceptable certainty. But
to state that the legal representatives of a deceased who was
on a fixed salary would not be entitled to the benefit of future
prospects for the purpose of computation of compensation
would be inapposite. It is because the criterion of distinction
between the two in that event would be certainty on the one
hand and staticness on the other. One may perceive that the
comparative measure is certainty on the one hand and
uncertainty on the other but such a perception is fallacious. It is
because the price rise does affect a self-employed person; and
that apart there is always an incessant effort to enhance one's
income for sustenance. The purchasing capacity of a salaried
person on permanent job when increases because of grant of
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increments and pay revision or for some other change in service
conditions, there is always a competing attitude in the private
sector to enhance the salary to get better efficiency from the
employees. Similarly, a person who is self-employed is bound to
garner his resources and raise his charges/fees so that he can
live with same facilities. To have the perception that he is likely
to remain static and his income to remain stagnant is contrary
to the fundamental concept of human attitude which always
intends to live with dynamism and move and change with the
time. Though it may seem appropriate that there cannot be
certainty in addition of future prospects to the existing income
unlike in the case of a person having a permanent job, yet the
said perception does not really deserve acceptance. We are
inclined to think that there can be some degree of difference as
regards the percentage that is meant for or applied to in respect
of the legal representatives who claim on behalf of the deceased
who had a permanent job than a person who is self-employed
or on a fixed salary. But not to apply the principle of
standardization on the foundation of perceived lack of certainty
would tantamount to remaining oblivious to the marrows of
ground reality. And, therefore, degree-test is imperative. Unless
the degree-test is applied and left to the parties to adduce
evidence to establish, it would be unfair and inequitable. The
degree-test has to have the inbuilt concept of percentage.
Taking into consideration the cumulative factors, namely,
passage of time, the changing society, escalation of price, the
change in price index, the human attitude to follow a particular
pattern of life, etc., an addition of 40% of the established
income of the deceased towards future prospects and where
the deceased was below 40 years an addition of 25% where
the deceased was between the age of 40 to 50 years would be
reasonable.
59. The controversy does not end here. The question still
remains whether there should be no addition where the age of
the deceased is more than 50 years. Sarla Verma thinks it
appropriate not to add any amount and the same has been
approved in Reshma Kumari. Judicial notice can be taken of the
fact that salary does not remain the same. When a person is in
a permanent job, there is always an enhancement due to one
reason or the other. To lay down as a thumb Rule that there
will be no addition after 50 years will be an unacceptable
concept. We are disposed to think, there should be an addition
of 15% if the deceased is between the age of 50 to 60 years and
there should be no addition thereafter. Similarly, in case of selfemployed or person on fixed salary, the addition should be 10%
between the age of 50 to 60 years. The aforesaid yardstick has
been fixed so that there can be consistency in the approach by
the tribunals and the courts.
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59. In view of the aforesaid analysis, we proceed to record our
conclusions:
…
59.3. While determining the income, an addition of 50%
of actual salary to the income of the deceased towards
future prospects, where the deceased had a permanent
job and was below the age of 40 years, should be made.
The addition should be 30%, if the age of the deceased
was between 40 to 50 years. In case the deceased was
between the age of 50 to 60 years, the addition should be
15%. Actual salary should be read as actual salary less
tax.
59.4. In case the deceased was self-employed or on a
fixed salary, an addition of 40% of the established
income should be the warrant where the deceased was
below the age of 40 years. An addition of 25% where the
deceased was between the age of 40 to 50 years and 10%
where the deceased was between the age of 50 to 60
years should be regarded as the necessary method of
computation. The established income means the income
minus the tax component. …”
(emphasis supplied)
(e) Three Conventional Heads
In Pranay Sethi (supra), the Constitution Bench held that
in death cases, compensation would be awarded only under
three conventional heads viz. loss of estate, loss of
consortium and funeral expenses.
The Court held that the conventional and traditional
heads, cannot be determined on percentage basis, because
that would not be an acceptable criterion. Unlike
determination of income, the said heads have to be
quantified, which has to be based on a reasonable
foundation. It was observed that factors such as price index,
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fall in bank interest, escalation of rates, are aspects which
have to be taken into consideration. The Court held that
reasonable figures on conventional heads, namely, loss of
estate, loss of consortium and funeral expenses should be
Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively.
The Court was of the view that the amounts to be awarded
under these conventional heads should be enhanced by 10%
every three years, which will bring consistency in respect of
these heads.
a) Loss of Estate – Rs. 15,000 to be awarded
b) Loss of Consortium
Loss of Consortium, in legal parlance, was historically
given a narrow meaning to be awarded only to the spouse
i.e. the right of the spouse to the company, care, help,
comfort, guidance, society, solace, affection and sexual
relations with his or her mate. The loss of companionship,
love, care and protection, etc., the spouse is entitled to get,
has to be compensated appropriately. The concept of nonpecuniary damage for loss of consortium is one of the
major heads for awarding compensation in various
jurisdictions such as the United States of America,
22
Australia, etc. English courts have recognised the right of
a spouse to get compensation even during the period of
temporary disablement.
In Magma General Insurance Co. Ltd. v. Nanu Ram &
Ors.,
12 this Court interpreted “consortium” to be a
compendious term, which encompasses spousal
consortium, parental consortium, as well as filial
consortium. The right to consortium would include the
company, care, help, comfort, guidance, solace and
affection of the deceased, which is a loss to his family.
With respect to a spouse, it would include sexual relations
with the deceased spouse.
Parental consortium is granted to the child upon the
premature death of a parent, for loss of parental aid,
protection, affection, society, discipline, guidance and
training.
Filial consortium is the right of the parents to
compensation in the case of an accidental death of a child.
An accident leading to the death of a child causes great
shock and agony to the parents and family of the
deceased. The greatest agony for a parent is to lose their
12 (2018) 18 SCC 130.
23
child during their lifetime. Children are valued for their
love and affection, and their role in the family unit.
Modern jurisdictions world-over have recognized that
the value of a child’s consortium far exceeds the economic
value of the compensation awarded in the case of the
death of a child. Most jurisdictions permit parents to be
awarded compensation under loss of consortium on the
death of a child. The amount awarded to the parents is the
compensation for loss of love and affection, care and
companionship of the deceased child.
The Motor Vehicles Act, 1988 is a beneficial legislation
which has been framed with the object of providing relief
to the victims, or their families, in cases of genuine claims.
In case where a parent has lost their minor child, or
unmarried son or daughter, the parents are entitled to be
awarded loss of consortium under the head of Filial
Consortium.
Parental Consortium is awarded to the children who
lose the care and protection of their parents in motor
vehicle accidents.
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The amount to be awarded for loss consortium will be
as per the amount fixed in Pranay Sethi (supra).
At this stage, we consider it necessary to provide
uniformity with respect to the grant of consortium, and
loss of love and affection. Several Tribunals and High
Courts have been awarding compensation for both loss of
consortium and loss of love and affection. The
Constitution Bench in Pranay Sethi (supra), has recognized
only three conventional heads under which compensation
can be awarded viz. loss of estate, loss of consortium and
funeral expenses.
In Magma General (supra), this Court gave a
comprehensive interpretation to consortium to include
spousal consortium, parental consortium, as well as filial
consortium. Loss of love and affection is comprehended in
loss of consortium.
The Tribunals and High Courts are directed to award
compensation for loss of consortium, which is a legitimate
conventional head. There is no justification to award
compensation towards loss of love and affection as a
separate head.
25
c) Funeral Expenses – Rs. 15,000 to be awarded
The aforesaid conventional heads are to be revised every
three years @10%.
9. We will now apply the law laid down by this Court in the
aforesaid judgments, to compute the compensation payable
to the dependants of the deceased Satpal Singh in the
present case.
9.1. We will first deal with the issue of assessing the
income of the deceased. The MACT assumed that the
deceased was a skilled worker, and fixed his income at
Rs. 4,000 p.m.
It is pertinent to note that the income of the
deceased in 1984 as per his Employment Contract
Form dated 21.08.1984, was 750 Qatari Riyal p.m.
This document was duly certified by the Indian
Embassy at Doha.
The accident occurred on 18.11.1998, which is 15
years after he shifted to Doha. The MACT could not
have assumed the income of the deceased to have
remained at Rs. 4,000 p.m. after having worked for
over 14 years in Doha.
26
The High Court has also erroneously awarded
compensation on the basis of the letter dated
27.06.1997 purported to have been written by the High
Speed Group to the Counselor, New Zealand Consulate
for issuance of a visa to the deceased Satpal Singh who
was engaged by their organization since 1984, and was
drawing a salary of $ 6,700 p.m.
The Insurance Company has seriously disputed
the authenticity of this letter.
We have perused the said letter, and are inclined
to accept the submission made on behalf of the
Insurance Company, that the said document was not
attested by the Indian Embassy at Doha, as per the
Diplomatic & Consular Offices Oaths and Fees Act,
1948.
The said document was not proved by the
Claimants, and cannot form the basis of computing the
income of the deceased.
The letter dated 27.06.1997 seems to be
suspicious for two other grounds. One, as per the
Employment Contract Form dated 21.08.1984 certified
27
by the Indian Embassy at Doha, the deceased was
engaged by the firm Ali Al Fayyad Trading Contracting
Est., Doha in 1984. The letter dated 27.06.1997 issued
by the High Speed Group, stated that the deceased was
employed with them since 1984. This leads to a serious
doubt about the authenticity of the letter.
Furthermore, the salary is mentioned in U.S. Dollars,
rather than Qatari Riyal, even though the High Speed
Group is a local company in Qatar.
Second, the letter dated 27.06.1997 was addressed
to the Counselor, New Zealand Consulate for a visa to
be issued to the deceased for his annual vacation to
New Zealand during the period June – August, 1997.
The passport entries however, do not show that the
deceased travelled to New Zealand.
Consequently, we have serious doubts about the
authenticity and veracity of the letter dated
27.06.1997, and decline to make it the basis for
computing the income of the deceased at the time of
his death.
28
The High Court by relying on the letter dated
27.06.1997, awarded an amount of Rs. 1,93,56,000 to
the Claimants, which after reducing by 50% on
account of contributory negligence, worked out to Rs.
96,78,000. It is pertinent to note that the Claimants
had prayed for an amount of Rs. 50 lacs as
compensation in their claim petition before the MACT.
The High Court has committed an error in awarding
such an exorbitant amount on the basis of an
unverified document, the authenticity of which was
seriously disputed.
In the absence of any other evidence being
produced by the Claimants, the income of the deceased
would be required to be computed by taking his base
salary at 750 Qatari Riyal p.m. in 1984 as a skilled
labourer, as reflected in his Employment Contract
Form.
A perusal of the passport entries of the deceased
reveal that he had continued to remain in employment
for a period of over 14 years in Qatar till he passed
away in 1998. He was evidently doing fairly well, since
29
there are numerous entries of foreign travel in his
passport during the 14 years of his stay in Doha. By
taking an increment of 10% per annum from 1984 till
1998, the notional income of the deceased could be
fixed at 2590 Qatari Riyal p.m., which can be rounded
off to 2600 Qatari Riyal p.m. As per the exchange rate
prevailing in 1998, 1 Qatari Riyal was equivalent to
12.41 INR. Accordingly, the income of the deceased
would work out to 2600 x 12.41 = Rs. 32,266 p.m. i.e.
Rs. 3,87,192 p.a.
9.2. Even though in Sarla Verma (supra), it was held that
the deduction towards personal and living expenses
should be 1/4th, if the number of dependant family
members is four, in the present case, we feel that 50%
of the income of the deceased would be required to be
deducted, since he was living in a foreign country.
The deceased had to maintain an establishment
there, and incur expenditure for the same in
commensurate with the high cost of living in a foreign
country. Therefore, we are of the view that the High
30
Court rightly deducted 50% of his income towards
personal and living expenses.
9.3. In the present case, the courts below failed to award
any amount towards future prospects. The deceased
Satpal Singh was just over 40 years of age at the time
of his death. As per the judgment of the Constitution
Bench in Pranay Sethi (supra), future prospects @30%
are to be awarded for computing the compensation
payable to the Claimants.
9.4. The multiplicand for computing the compensation
would therefore, work out to Rs. 3,87,192 – 50% + 30%
= Rs. 2,51,675.
9.5. The deceased Satpal Singh was 40 years of age at the
time of his death. Accordingly, the multiplier of 15
would be the appropriate multiplier as per the table set
out in Sarla Verma (supra).
9.6. Multiplying the multiplicand of Rs. 2,51,675 by the
multiplier of 15, the loss of dependency payable to the
Claimants would work out to Rs. 37,75,125.
9.7. Insofar as the conventional heads are concerned, the
deceased Satpal Singh left behind a widow and three
31
children as his dependants. On the basis of the
judgments in Pranay Sethi (supra) and Magma General
(supra), the following amounts are awarded under the
conventional heads :-
i) Loss of Estate: Rs. 15,000
ii) Loss of Consortium:
a) Spousal Consortium: Rs. 40,000
b) Parental Consortium: 40,000 x 3 = Rs. 1,20,000
iii) Funeral Expenses : Rs. 15,000
9.8. We affirm the deduction of 50% made by the MACT
and the High Court towards contributory negligence.
10. In light of the aforesaid discussion, the Claimants are
awarded compensation as follows :
i) Income : Rs. 3,87,192 p.a.
ii) Deduction towards
Personal Expenses : 50%
iii) Future Prospects : 30%
iv) Multiplicand : Rs. 2,51,675
(3,87,192-50%+30%)
v) Multiplier : 15
vi) Loss of Dependency : Rs. 37,75,125
(2,51,675 x 15)
vii) Funeral Expenses : Rs. 15,000
viii) Loss of Estate : Rs. 15,000
ix) Loss of Spousal Consortium : Rs. 40,000
x) Loss of Parental Consortium to
each of the 3 children : Rs. 1,20,000
32
xi) Total compensation : Rs. 39,65,125
xii) Deduction on account
of contributory negligence : 50%
Total compensation to
be paid : Rs. 19,82,563
11. This Court vide Order dated 13.10.2014 had stayed the
operation of the impugned judgment subject to the Appellant
– Insurance Company depositing a sum of Rs. 10 lacs before
the Trial Court. The Claimants were granted liberty to
withdraw the same.
12. The Appellant – Insurance Company is directed to pay the
balance amount of compensation within a period of twelve
weeks’ from the date of this judgment.
13. The deceased Satpal Singh had died on 18.11.1998. His
dependants have been pursuing legal proceedings for grant of
compensation since the past 22 years. As a consequence, we
deem it appropriate to direct that Interest @12% p.a. be paid
on the total compensation awarded, from the date of filing
the claim petition, till realization.
14. The Claimant No. 1 i.e. widow of the deceased has suffered
permanent disability of 25% in this accident. She has single-
33
handedly raised her three minor children, and eked out her
livelihood through agricultural activity.
We direct that 50% of the total compensation (inclusive
of interest) be given to the Claimant No. 1 i.e. widow of the
deceased, and the balance 50% be divided equally between
the three children.
15. The Civil Appeals are disposed of in the aforesaid terms.
...…...............………………J.
(S. ABDUL NAZEER)
...…...............………………J.
(INDU MALHOTRA)
...…...............………………J.
(ANIRUDDHA BOSE)
June 30, 2020.
New Delhi.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.2705 OF 2020
(arising out of SLP (Civil) No. 28548 of 2014)
United India Insurance Co. Ltd. …Appellant
versus
Satinder Kaur @ Satwinder Kaur & Ors. …Respondents
WITH
CIVIL APPEAL NO.2706 OF 2020
(arising out of SLP (Civil) No. 12520 of 2015)
Satinder Kaur @ Satwinder Kaur & Ors. …Appellants
versus
United India Insurance Co. Ltd. …Respondent
J U D G M E N T
INDU MALHOTRA, J.
Leave granted.
2
1. The deceased – Satpal Singh was residing in Doha, Qatar
since 1984. The Employment Contract Form of the deceased
dated 21.08.1984 revealed that he was engaged as a labourer
initially for a period of one year on a salary of 750 Qatari
Riyal p.m., and continued to live in Qatar where he was
employed, till he passed away in a motor vehicle accident in
India in 1998.
2. Satpal Singh was visiting India in November, 1998. On
18.11.1998, he was riding a scooter, with his wife as the
pillion rider, when he met with an accident with a Maruti car
bearing No. CH-01-M-6284 coming from the opposite
direction.
FIR No. 204 dated 18.11.1998 was lodged u/S. 304A,
279, 337, 427 IPC at P.S. Sadar, Rajpura against the driver
and owner of the offending car.
The FIR was lodged on the statement of Satinder Kaur –
widow of the deceased, wherein she had stated that the
accident had occurred due to the rash and negligent driving
of the driver of the Maruti car. It was further stated that the
accident took place while her husband was over-taking a
tractor-trolley, when the Maruti car was coming at a high
3
speed from the opposite side. This led to the accident, and
caused the death of Satpal Singh on the spot.
The Claimant No. 1 i.e. wife of the deceased was also
seriously injured. Her right leg and jaw were fractured. The
Claimant No. 1 remained in hospital for over a month. A rod
was inserted in her leg, and remained in plaster for about 7
to 8 months. The accident led to 25% permanent disability,
which is borne out from the Disability Certificate issued by
the Civil Surgeon, Patiala.
3. Claim Petition bearing M.A.C. Application No. 152 was filed
before the MACT, Patiala (Punjab) on 24.12.1998 u/S. 166 of
the Motor Vehicles Act, 1988 by the widow of the deceased,
on behalf of herself and her 3 minor children for
compensation on the death of her husband. The Claimants
prayed for compensation of Rs. 50 lacs, alongwith Interest
@18% p.a. to be paid jointly and severally by the Insurance
Company, and the driver and owner of the Maruti car.
3.1. A copy of the FIR was placed before the MACT, as also
the Post Mortem Report which recorded the serious
head injuries caused by the road accident on the
deceased.
4
3.2. The Claimants filed a photocopy of the Employment
Contract Form dated 10.07.1984 certified by the
Indian Embassy at Doha, which records the
engagement of the deceased as a labourer by the firm
Ali Al Fayyad Trading Contracting Est., Doha on a
salary of 750 Qatari Riyal p.m., when he first shifted to
Qatar.
3.3. The Claimants also placed on record a letter dated
27.06.1997 purported to have been issued by his
employer – the High Speed Group to the Counsellor,
New Zealand Consulate for issuance of a visa. It was
stated that the General Manager of their company, Mr.
Satpal Harbans Singh was intending to spend his
annual vacation during June – August 1997 in New
Zealand, and had been employed by this organization
since 1984, and was now drawing a salary of $ 6,700
p.m.
It is relevant to note that this letter was not
attested by the Indian Embassy at Doha.
3.4. The Claimants placed on record the Passport of the
deceased, which reveals his date of birth as
5
10.08.1958. The deceased was a little over 40 years of
age at the time of the accident.
The passport entries reveal frequent foreign travel
during the period 1986 till 1998 when he expired.
4. The MACT vide Award dated 30.03.2001 held that a perusal
of the first statement made by Claimant No. 1 – widow of the
deceased in the FIR, revealed that her husband was overtaking a tractor–trolley when the accident occurred, because
the Maruti car was coming at a high speed from the opposite
side. Consequently, the MACT held that it was a case of
contributory negligence on the part of the deceased Satpal
Singh, as also on the part of the driver of the Maruti car.
4.1. The MACT applied the multiplier of 13, since the
deceased was a little over 40 years of age at the time of
his death.
4.2. With respect to the income of the deceased, the MACT
held that the letter dated 27.06.1997 issued by the
High Speed Group, had not been proved by the
Claimants, nor was it attested by the Indian Embassy
at Doha, and therefore refused to take it into
consideration.
6
4.3. The MACT assumed that the income of the deceased
Satpal Singh should be assessed just as an ordinary
skilled worker, and assessed his income at Rs. 4,000
p.m. The amount of dependency was taken as Rs.
2,500 p.m. x 12 x 13 = Rs. 3.90 lacs. Since it was a
case of contributory negligence, the compensation was
reduced by 50%, which worked out to Rs. 1.80 lacs. An
amount of Rs. 10,000 was awarded towards funeral
expenses.
The compensation of Rs. 1,90,000 would carry
Interest @9% p.a. from the date of filing the claim, till
the date of payment.
4.4. The MACT held all three respondents i.e. the driver of
the Maruti car, the owner of the car, and the Insurance
Company liable to pay the compensation awarded,
jointly and severally.
5. Aggrieved by the aforesaid Judgment, the Claimants filed an
Appeal being F.A.O. No. 2294/2001 before the High Court for
further enhancement.
7
5.1. The High Court vide the impugned Judgment and
Order dated 10.03.2014 upheld the findings of the
MACT regarding contributory negligence.
5.2. With respect to the income of the deceased, the High
Court proceeded on the basis of the letter dated
27.06.1997 issued by the High Speed Group, , wherein
it was stated that Satpal Singh was working as a
General Manager, and drawing a salary of $ 6,700 p.m.
which would be equivalent to Rs. 2,68,000 p.m. at the
time when the claim was filed.
5.3. The High Court assessed the compensation on the
basis of the income at Rs. 2,68,000 p.m. and adopted
the multiplier of 12.
The contribution to the family was fixed at 50% of
his income, which would approximately be Rs.
1,34,000 p.m.
Rs. 50,000 was awarded towards loss of estate,
and Rs. 10,000 towards funeral expenses.
On this basis, the total compensation payable to
the Claimants was computed at Rs. 96,78,000 after
8
making a partial abatement of 50% towards
contributory negligence.
The High Court held that since 50% of the income
was provided to the wife and children, it was not
necessary to provide for loss of consortium, and loss of
love and affection.
5.4. The High Court held the Insurance Company to be
liable to pay the compensation, which would be
distributed equally between the widow and children of
the deceased. The enhanced amount of compensation
would carry Interest @7.5% p.a. from the date of filing
the claim, till realization.
6. The Appellant – Insurance Company filed SLP (Civil) No.
28548/2014 to challenge the impugned Judgment.
The Claimants also filed an SLP bearing SLP (Civil) No.
12520/2015 claiming further enhancement of compensation.
7. We have perused the pleadings and the documentary
evidence placed on record before the Courts below, and have
considered the oral submissions made by the Counsel for the
parties.
9
We are of the view that the judgments of both the MACT
and the High Court are liable to be set aside, and the
compensation is required to be awarded in accordance with
the law expounded by this Court in various decisions.
8. Relevant principles for assessment of compensation in
cases of death as evolved by judicial dicta.
The criteria which are to be taken into consideration for
assessing compensation in the case of death, are : (i) the age
of the deceased at the time of his death; (ii) the number of
dependants left behind by the deceased; and (iii) the income
of the deceased at the time of his death.
In Sarla Verma & Ors. v. Delhi Transport Corporation &
Anr.,
1 this Court held that to arrive at the loss of dependency,
the tribunal ought to take into consideration three factors :–
i) Additions/deductions to be made for arriving at the
income;
ii) The deduction 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.
1 (2009) 6 SCC 121.
10
In order to provide uniformity and consistency in
awarding compensation, the following steps are required to be
followed :–
“Step 1 (Ascertaining the multiplicand)
The income of the deceased per annum should be determined.
Out of the said income a deduction should be made in regard to
the amount which the deceased would have spent on himself
by way of personal and living expenses. The balance, which is
considered to be the contribution to the dependant family,
constitutes the multiplicand.
Step 2 (Ascertaining the multiplier)
Having regard to the age of the deceased and period of active
career, the appropriate multiplier should be selected. This does
not mean ascertaining the number of years he would have lived
or worked but for the accident. Having regard to several
imponderables in life and economic factors, a table of
multipliers with reference to the age has been identified by this
Court. The multiplier should be chosen from the said table with
reference to the age of the deceased.
Step 3 (Actual calculation)
The annual contribution to the family (multiplicand) when
multiplied by such multiplier gives the 'loss of dependency' to
the family. Thereafter, a conventional amount in the range of
Rs. 5,000/- to Rs. 10,000/- may be added as loss of estate.
Where the deceased is survived by his widow, another
conventional amount in the range of 5,000/- to 10,000/- should
be added under the head of loss of consortium. But no amount
is to be awarded under the head of pain, suffering or hardship
caused to the legal heirs of the deceased.
The funeral expenses, cost of transportation of the body (if
incurred) and cost of any medical treatment of the deceased
before death (if incurred) should also added.”
(emphasis supplied)
(a) Deduction for personal and living expenses
The personal and living expenses of the deceased should
be deducted from the income, to arrive at the contribution to
the family. In Sarla Verma (supra) (paras 30, 31 and 32), this
11
Court took the view that it was necessary to standardize the
deductions to be made under the head personal and living
expenses of the deceased.
Accordingly, it was held that :
where the deceased was married, the deduction
towards personal and living expenses should be 1/3rd
if the number of dependant family members is two to
three;
1/4th if the number of dependant family members is
four to six; and
1/5th if the number of dependant family members
exceeds six.
If the deceased was a bachelor, and the claim was
filed by the parents, the deduction would normally be
50% as personal and living expenses of the bachelor.
Subject to evidence to the contrary, the father was
likely to have his own income, and would not be
considered to be a dependant. Hence, the mother
alone will be considered to be a dependant.
In the absence of any evidence to the contrary,
brothers and sisters of the deceased bachelor would
12
not be considered to be dependants, because they
would usually either be independent and earning, or
married, or dependant on the father.
Thus, even if the deceased was survived by
parents and siblings, only the mother would be
considered to be a dependant. The deduction towards
personal expenses of a bachelor would be 50%, and
50% would be the contribution to the family.
However, in a case where the family of the bachelor
was large and dependant on the income of the
deceased, as in a case where he had a widowed
mother, and a large number of younger non-earning
sisters or brothers, his personal and living expenses
could be restricted to 1/3rd, and contribution to the
family be taken as 2/3rd.
A three-judge bench in Reshma Kumari & Ors. v. Madan
Mohan & Anr.,
2 affirmed the standards fixed in Sarla Verma
(supra) with respect to the deduction for personal and living
expenses, and held that these standards must ordinarily be
2 (2013) 9 SCC 65.
13
followed, unless a case for departure is made out. The Court
held :
“41. 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.
42. In our view, the standards fixed by this Court in Sarla
Verma 2009 (6) SCC 121 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.”
43. In what we have discussed above, we sum up our
conclusions as follows:
…
43.6. 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 Sarla Verma 2009 (6) SCC 121 subject to the
observations made by us in para 38 above. …”
(emphasis supplied)
A Constitution Bench of this Court in National Insurance
Co. Ltd. v. Pranay Sethi & Ors.,
3 held that the standards fixed
in Sarla Verma (supra) would provide guidance for
appropriate deduction towards personal and living expenses,
and affirmed the conclusion in para 43.6 of Reshma Kumari
(supra).
3 (2017) 16 SCC 680.
14
(b) Determination of Multiplier
With respect to the multiplier, the Court in Sarla Verma
(supra), prepared a chart for fixing the applicable multiplier
in accordance with the age of the deceased, after considering
the judgments in General Manager, Kerala S.R.T.C.,
Trivandrum v. Susamma Thomas & Ors.,
4 U.P.S.R.T.C. & Ors.
v. Trilok Chandra & Ors.,
5 and New India Assurance Co. Ltd.
v. Charlie & Ors.
6
The relevant extract from the said chart i.e. Column 4
has been set out hereinbelow for ready reference :–
Age of the deceased Multiplier (Column 4)
Upto 15 years -
15 to 20 years 18
21 to 25 years 18
26 to 30 years 17
31 to 35 years 16
36 to 40 years 15
41 to 45 years 14
46 to 50 years 13
51 to 55 years 11
56 to 60 years 9
61 to 65 years 7
Above 65 years 5
The Court in Sarla Verma (supra) held :–
“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),
4 (1994) 2 SCC 176.
5 (1996) 4 SCC 362.
6 (2005) 10 SCC 720.
15
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.”
(emphasis supplied)
In Reshma Kumari (supra), this Court affirmed Column 4
of the chart prepared in Sarla Verma (supra), and held that
this would provide uniformity and consistency in determining
the multiplier to be applied. The Constitution Bench in
Pranay Sethi (supra) affirmed the chart fixing the multiplier
as expounded in Sarla Verma (supra), and held :–
“44. At this stage, we must immediately say that insofar as the
aforesaid multiplicand/multiplier is concerned, it has to be
accepted on the basis of income established by the legal
representatives of the deceased. Future prospects are to be
added to the sum on the percentage basis and “income” means
actual income less than the tax paid. The multiplier has already
been fixed in Sarla Verma which has been approved in Reshma
Kumari with which we concur.
…
59.6. The selection of multiplier shall be as indicated in the
Table in Sarla Verma read with paragraph 42 of that
judgment.”
(emphasis supplied)
(c) Age of the deceased must be the basis for determining
the multiplier even in case of a bachelor.
In Sarla Verma (supra), this Court held that the
multiplier should be determined with reference to the age of
16
the deceased. This was subsequently affirmed in Reshma
Kumari (supra), and followed in a line of decisions.
A three-judge bench in Munna Lal Jain & Ors. v. Vipin
Kumar Sharma & Ors.,
7 held that the issue had been decided
in Reshma Kumari (supra), wherein this Court held that the
multiplier must be with reference to the age of the deceased.
The decision in Munna Lal Jain (supra) was followed by
another three-judge bench of this Court in Sube Singh & Ors.
v. Shyam Singh (dead) & Ors.8
The Constitution Bench in National Insurance Company
Limited v. Pranay Sethi & Ors.,
9 affirmed the view taken in
Sarla Verma (supra) and Reshma Kumari (supra), and held
that the age of the deceased should be the basis for applying
the multiplier.
Another three-judge bench in Royal Sundaram Alliance
Insurance Co. Ltd. v. Mandala Yadagari Goud & Ors.,
10 traced
out the law on this issue, and held that the compensation is
to be computed based on what the deceased would have
contributed to support the dependants. In the case of the
death of a married person, it is an accepted norm that the
7 (2015) 6 SCC 347.
8 (2018) 3 SCC 18.
9 (2017) 16 SCC 680.
10 (2019) 5 SCC 554.
17
age of the deceased would be taken into account. Thus, even
in the case of a bachelor, the same principle must be applied.
The aforesaid legal position has recently been re-affirmed
by this Court in Sunita Tokas and Ors. v. New India
Insurance Co. Ltd. and Ors.11
(d) Future Prospects
In the wake of increased inflation, rising consumer
prices, and general standards of living, future prospects have
to be taken into consideration, not only with respect to the
status or educational qualifications of the deceased, but also
other relevant factors such as higher salaries and perks
which are being offered by private companies these days. The
dearness allowance and perks from which the family would
have derived monthly benefit, are required to be taken into
consideration for determining the loss of dependency.
In Sarla Verma (supra), this Court held :
“24. In Susamma Thomas, this Court increased the income by
nearly 100%, in Sarla Dixit, the income was increased only by
50% and in Abati Bezbaruah the income was increased by a
mere 7%. In view of 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
11 2019 (11) SCALE 24.
18
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 calculations 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.”
(emphasis supplied)
In Pranay Sethi (supra), the Constitution Bench
evaluated all the judicial precedents on the issue of future
prospects including Sarla Verma (supra), and devised a fixed
standard for granting future prospects. It was held :
“57. Having bestowed our anxious consideration, we are
disposed to think when we accept the principle of
standardization, there is really no rationale not to apply the
said principle to the self-employed or a person who is on a fixed
salary. To follow the doctrine of actual income at the time of
death and not to add any amount with regard to future
prospects to the income for the purpose of determination of
multiplicand would be unjust. The determination of income
while computing compensation has to include future prospects
so that the method will come within the ambit and sweep of just
compensation as postulated Under Section 168 of the Act. In
case of a deceased who had held a permanent job with inbuilt
grant of annual increment, there is an acceptable certainty. But
to state that the legal representatives of a deceased who was
on a fixed salary would not be entitled to the benefit of future
prospects for the purpose of computation of compensation
would be inapposite. It is because the criterion of distinction
between the two in that event would be certainty on the one
hand and staticness on the other. One may perceive that the
comparative measure is certainty on the one hand and
uncertainty on the other but such a perception is fallacious. It is
because the price rise does affect a self-employed person; and
that apart there is always an incessant effort to enhance one's
income for sustenance. The purchasing capacity of a salaried
person on permanent job when increases because of grant of
19
increments and pay revision or for some other change in service
conditions, there is always a competing attitude in the private
sector to enhance the salary to get better efficiency from the
employees. Similarly, a person who is self-employed is bound to
garner his resources and raise his charges/fees so that he can
live with same facilities. To have the perception that he is likely
to remain static and his income to remain stagnant is contrary
to the fundamental concept of human attitude which always
intends to live with dynamism and move and change with the
time. Though it may seem appropriate that there cannot be
certainty in addition of future prospects to the existing income
unlike in the case of a person having a permanent job, yet the
said perception does not really deserve acceptance. We are
inclined to think that there can be some degree of difference as
regards the percentage that is meant for or applied to in respect
of the legal representatives who claim on behalf of the deceased
who had a permanent job than a person who is self-employed
or on a fixed salary. But not to apply the principle of
standardization on the foundation of perceived lack of certainty
would tantamount to remaining oblivious to the marrows of
ground reality. And, therefore, degree-test is imperative. Unless
the degree-test is applied and left to the parties to adduce
evidence to establish, it would be unfair and inequitable. The
degree-test has to have the inbuilt concept of percentage.
Taking into consideration the cumulative factors, namely,
passage of time, the changing society, escalation of price, the
change in price index, the human attitude to follow a particular
pattern of life, etc., an addition of 40% of the established
income of the deceased towards future prospects and where
the deceased was below 40 years an addition of 25% where
the deceased was between the age of 40 to 50 years would be
reasonable.
59. The controversy does not end here. The question still
remains whether there should be no addition where the age of
the deceased is more than 50 years. Sarla Verma thinks it
appropriate not to add any amount and the same has been
approved in Reshma Kumari. Judicial notice can be taken of the
fact that salary does not remain the same. When a person is in
a permanent job, there is always an enhancement due to one
reason or the other. To lay down as a thumb Rule that there
will be no addition after 50 years will be an unacceptable
concept. We are disposed to think, there should be an addition
of 15% if the deceased is between the age of 50 to 60 years and
there should be no addition thereafter. Similarly, in case of selfemployed or person on fixed salary, the addition should be 10%
between the age of 50 to 60 years. The aforesaid yardstick has
been fixed so that there can be consistency in the approach by
the tribunals and the courts.
20
59. In view of the aforesaid analysis, we proceed to record our
conclusions:
…
59.3. While determining the income, an addition of 50%
of actual salary to the income of the deceased towards
future prospects, where the deceased had a permanent
job and was below the age of 40 years, should be made.
The addition should be 30%, if the age of the deceased
was between 40 to 50 years. In case the deceased was
between the age of 50 to 60 years, the addition should be
15%. Actual salary should be read as actual salary less
tax.
59.4. In case the deceased was self-employed or on a
fixed salary, an addition of 40% of the established
income should be the warrant where the deceased was
below the age of 40 years. An addition of 25% where the
deceased was between the age of 40 to 50 years and 10%
where the deceased was between the age of 50 to 60
years should be regarded as the necessary method of
computation. The established income means the income
minus the tax component. …”
(emphasis supplied)
(e) Three Conventional Heads
In Pranay Sethi (supra), the Constitution Bench held that
in death cases, compensation would be awarded only under
three conventional heads viz. loss of estate, loss of
consortium and funeral expenses.
The Court held that the conventional and traditional
heads, cannot be determined on percentage basis, because
that would not be an acceptable criterion. Unlike
determination of income, the said heads have to be
quantified, which has to be based on a reasonable
foundation. It was observed that factors such as price index,
21
fall in bank interest, escalation of rates, are aspects which
have to be taken into consideration. The Court held that
reasonable figures on conventional heads, namely, loss of
estate, loss of consortium and funeral expenses should be
Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively.
The Court was of the view that the amounts to be awarded
under these conventional heads should be enhanced by 10%
every three years, which will bring consistency in respect of
these heads.
a) Loss of Estate – Rs. 15,000 to be awarded
b) Loss of Consortium
Loss of Consortium, in legal parlance, was historically
given a narrow meaning to be awarded only to the spouse
i.e. the right of the spouse to the company, care, help,
comfort, guidance, society, solace, affection and sexual
relations with his or her mate. The loss of companionship,
love, care and protection, etc., the spouse is entitled to get,
has to be compensated appropriately. The concept of nonpecuniary damage for loss of consortium is one of the
major heads for awarding compensation in various
jurisdictions such as the United States of America,
22
Australia, etc. English courts have recognised the right of
a spouse to get compensation even during the period of
temporary disablement.
In Magma General Insurance Co. Ltd. v. Nanu Ram &
Ors.,
12 this Court interpreted “consortium” to be a
compendious term, which encompasses spousal
consortium, parental consortium, as well as filial
consortium. The right to consortium would include the
company, care, help, comfort, guidance, solace and
affection of the deceased, which is a loss to his family.
With respect to a spouse, it would include sexual relations
with the deceased spouse.
Parental consortium is granted to the child upon the
premature death of a parent, for loss of parental aid,
protection, affection, society, discipline, guidance and
training.
Filial consortium is the right of the parents to
compensation in the case of an accidental death of a child.
An accident leading to the death of a child causes great
shock and agony to the parents and family of the
deceased. The greatest agony for a parent is to lose their
12 (2018) 18 SCC 130.
23
child during their lifetime. Children are valued for their
love and affection, and their role in the family unit.
Modern jurisdictions world-over have recognized that
the value of a child’s consortium far exceeds the economic
value of the compensation awarded in the case of the
death of a child. Most jurisdictions permit parents to be
awarded compensation under loss of consortium on the
death of a child. The amount awarded to the parents is the
compensation for loss of love and affection, care and
companionship of the deceased child.
The Motor Vehicles Act, 1988 is a beneficial legislation
which has been framed with the object of providing relief
to the victims, or their families, in cases of genuine claims.
In case where a parent has lost their minor child, or
unmarried son or daughter, the parents are entitled to be
awarded loss of consortium under the head of Filial
Consortium.
Parental Consortium is awarded to the children who
lose the care and protection of their parents in motor
vehicle accidents.
24
The amount to be awarded for loss consortium will be
as per the amount fixed in Pranay Sethi (supra).
At this stage, we consider it necessary to provide
uniformity with respect to the grant of consortium, and
loss of love and affection. Several Tribunals and High
Courts have been awarding compensation for both loss of
consortium and loss of love and affection. The
Constitution Bench in Pranay Sethi (supra), has recognized
only three conventional heads under which compensation
can be awarded viz. loss of estate, loss of consortium and
funeral expenses.
In Magma General (supra), this Court gave a
comprehensive interpretation to consortium to include
spousal consortium, parental consortium, as well as filial
consortium. Loss of love and affection is comprehended in
loss of consortium.
The Tribunals and High Courts are directed to award
compensation for loss of consortium, which is a legitimate
conventional head. There is no justification to award
compensation towards loss of love and affection as a
separate head.
25
c) Funeral Expenses – Rs. 15,000 to be awarded
The aforesaid conventional heads are to be revised every
three years @10%.
9. We will now apply the law laid down by this Court in the
aforesaid judgments, to compute the compensation payable
to the dependants of the deceased Satpal Singh in the
present case.
9.1. We will first deal with the issue of assessing the
income of the deceased. The MACT assumed that the
deceased was a skilled worker, and fixed his income at
Rs. 4,000 p.m.
It is pertinent to note that the income of the
deceased in 1984 as per his Employment Contract
Form dated 21.08.1984, was 750 Qatari Riyal p.m.
This document was duly certified by the Indian
Embassy at Doha.
The accident occurred on 18.11.1998, which is 15
years after he shifted to Doha. The MACT could not
have assumed the income of the deceased to have
remained at Rs. 4,000 p.m. after having worked for
over 14 years in Doha.
26
The High Court has also erroneously awarded
compensation on the basis of the letter dated
27.06.1997 purported to have been written by the High
Speed Group to the Counselor, New Zealand Consulate
for issuance of a visa to the deceased Satpal Singh who
was engaged by their organization since 1984, and was
drawing a salary of $ 6,700 p.m.
The Insurance Company has seriously disputed
the authenticity of this letter.
We have perused the said letter, and are inclined
to accept the submission made on behalf of the
Insurance Company, that the said document was not
attested by the Indian Embassy at Doha, as per the
Diplomatic & Consular Offices Oaths and Fees Act,
1948.
The said document was not proved by the
Claimants, and cannot form the basis of computing the
income of the deceased.
The letter dated 27.06.1997 seems to be
suspicious for two other grounds. One, as per the
Employment Contract Form dated 21.08.1984 certified
27
by the Indian Embassy at Doha, the deceased was
engaged by the firm Ali Al Fayyad Trading Contracting
Est., Doha in 1984. The letter dated 27.06.1997 issued
by the High Speed Group, stated that the deceased was
employed with them since 1984. This leads to a serious
doubt about the authenticity of the letter.
Furthermore, the salary is mentioned in U.S. Dollars,
rather than Qatari Riyal, even though the High Speed
Group is a local company in Qatar.
Second, the letter dated 27.06.1997 was addressed
to the Counselor, New Zealand Consulate for a visa to
be issued to the deceased for his annual vacation to
New Zealand during the period June – August, 1997.
The passport entries however, do not show that the
deceased travelled to New Zealand.
Consequently, we have serious doubts about the
authenticity and veracity of the letter dated
27.06.1997, and decline to make it the basis for
computing the income of the deceased at the time of
his death.
28
The High Court by relying on the letter dated
27.06.1997, awarded an amount of Rs. 1,93,56,000 to
the Claimants, which after reducing by 50% on
account of contributory negligence, worked out to Rs.
96,78,000. It is pertinent to note that the Claimants
had prayed for an amount of Rs. 50 lacs as
compensation in their claim petition before the MACT.
The High Court has committed an error in awarding
such an exorbitant amount on the basis of an
unverified document, the authenticity of which was
seriously disputed.
In the absence of any other evidence being
produced by the Claimants, the income of the deceased
would be required to be computed by taking his base
salary at 750 Qatari Riyal p.m. in 1984 as a skilled
labourer, as reflected in his Employment Contract
Form.
A perusal of the passport entries of the deceased
reveal that he had continued to remain in employment
for a period of over 14 years in Qatar till he passed
away in 1998. He was evidently doing fairly well, since
29
there are numerous entries of foreign travel in his
passport during the 14 years of his stay in Doha. By
taking an increment of 10% per annum from 1984 till
1998, the notional income of the deceased could be
fixed at 2590 Qatari Riyal p.m., which can be rounded
off to 2600 Qatari Riyal p.m. As per the exchange rate
prevailing in 1998, 1 Qatari Riyal was equivalent to
12.41 INR. Accordingly, the income of the deceased
would work out to 2600 x 12.41 = Rs. 32,266 p.m. i.e.
Rs. 3,87,192 p.a.
9.2. Even though in Sarla Verma (supra), it was held that
the deduction towards personal and living expenses
should be 1/4th, if the number of dependant family
members is four, in the present case, we feel that 50%
of the income of the deceased would be required to be
deducted, since he was living in a foreign country.
The deceased had to maintain an establishment
there, and incur expenditure for the same in
commensurate with the high cost of living in a foreign
country. Therefore, we are of the view that the High
30
Court rightly deducted 50% of his income towards
personal and living expenses.
9.3. In the present case, the courts below failed to award
any amount towards future prospects. The deceased
Satpal Singh was just over 40 years of age at the time
of his death. As per the judgment of the Constitution
Bench in Pranay Sethi (supra), future prospects @30%
are to be awarded for computing the compensation
payable to the Claimants.
9.4. The multiplicand for computing the compensation
would therefore, work out to Rs. 3,87,192 – 50% + 30%
= Rs. 2,51,675.
9.5. The deceased Satpal Singh was 40 years of age at the
time of his death. Accordingly, the multiplier of 15
would be the appropriate multiplier as per the table set
out in Sarla Verma (supra).
9.6. Multiplying the multiplicand of Rs. 2,51,675 by the
multiplier of 15, the loss of dependency payable to the
Claimants would work out to Rs. 37,75,125.
9.7. Insofar as the conventional heads are concerned, the
deceased Satpal Singh left behind a widow and three
31
children as his dependants. On the basis of the
judgments in Pranay Sethi (supra) and Magma General
(supra), the following amounts are awarded under the
conventional heads :-
i) Loss of Estate: Rs. 15,000
ii) Loss of Consortium:
a) Spousal Consortium: Rs. 40,000
b) Parental Consortium: 40,000 x 3 = Rs. 1,20,000
iii) Funeral Expenses : Rs. 15,000
9.8. We affirm the deduction of 50% made by the MACT
and the High Court towards contributory negligence.
10. In light of the aforesaid discussion, the Claimants are
awarded compensation as follows :
i) Income : Rs. 3,87,192 p.a.
ii) Deduction towards
Personal Expenses : 50%
iii) Future Prospects : 30%
iv) Multiplicand : Rs. 2,51,675
(3,87,192-50%+30%)
v) Multiplier : 15
vi) Loss of Dependency : Rs. 37,75,125
(2,51,675 x 15)
vii) Funeral Expenses : Rs. 15,000
viii) Loss of Estate : Rs. 15,000
ix) Loss of Spousal Consortium : Rs. 40,000
x) Loss of Parental Consortium to
each of the 3 children : Rs. 1,20,000
32
xi) Total compensation : Rs. 39,65,125
xii) Deduction on account
of contributory negligence : 50%
Total compensation to
be paid : Rs. 19,82,563
11. This Court vide Order dated 13.10.2014 had stayed the
operation of the impugned judgment subject to the Appellant
– Insurance Company depositing a sum of Rs. 10 lacs before
the Trial Court. The Claimants were granted liberty to
withdraw the same.
12. The Appellant – Insurance Company is directed to pay the
balance amount of compensation within a period of twelve
weeks’ from the date of this judgment.
13. The deceased Satpal Singh had died on 18.11.1998. His
dependants have been pursuing legal proceedings for grant of
compensation since the past 22 years. As a consequence, we
deem it appropriate to direct that Interest @12% p.a. be paid
on the total compensation awarded, from the date of filing
the claim petition, till realization.
14. The Claimant No. 1 i.e. widow of the deceased has suffered
permanent disability of 25% in this accident. She has single-
33
handedly raised her three minor children, and eked out her
livelihood through agricultural activity.
We direct that 50% of the total compensation (inclusive
of interest) be given to the Claimant No. 1 i.e. widow of the
deceased, and the balance 50% be divided equally between
the three children.
15. The Civil Appeals are disposed of in the aforesaid terms.
...…...............………………J.
(S. ABDUL NAZEER)
...…...............………………J.
(INDU MALHOTRA)
...…...............………………J.
(ANIRUDDHA BOSE)
June 30, 2020.
New Delhi.
