1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.1754 OF 2018
(Arising out of SLP (Civil) No.12416 of 2016)
Munusamy & Ors. …. Appellants
Versus
The Managing Director, Tamil Nadu State ….Respondent
Transport Corporation (Villupuram) Ltd.
J U D G M E N T
A.M. Khanwilkar, J.
1. This appeal emanates from the judgment and order
passed by the High Court of Judicature at Madras dated
16.04.2013 in C.M.A. No.2819 of 2012. The High Court
allowed the prayer for grant of enhanced compensation
amount in favour of the appellants. The appellants seek
further enhancement of compensation amount on the ground
2
that the High Court has not provided for future prospects,
while computing the compensation amount. The appellants
rely upon the recent decision of the Constitution Bench of this
Court in the case of National Insurance Company Ltd. Vs.
Pranay Sethi and Ors.1
, to buttress their submission.
2. Before we deal with the grievance of the appellants, it is
apposite to reproduce the relevant extract of the impugned
judgment which reads thus:
“7. We have heard the learned counsel for the respondent
on the above submission.
8. In the absence of specific proof of employment, the
Tribunal rightly has taken the earning of the deceased at
Rs.4,000/ per month and deducted 50% towards personal
expenses since the deceased were bachelors. However, the
proper multiplier to be adopted in the case must be 18, since
the deceased were 21 and 20 years respectively. A sum of
Rs.20,000/ to each of the claimants towards loss of love
and affection and a further sum of Rs.5,000/ towards
transport expenses were granted.
9. Accordingly, in C.M.A. No.2819 of 2012 compensation
payable would be as follows:
(a) Loss of Dependency Rs.4,32,000/
(Rs.4,000/×12×18)
(b) Loss of love and affection Rs. 60,000/
(c) Transport Rs. 5,000/
(d) Funeral Rs. 2,000/
1 AIR 2017 SC 5157
3
(e) Loss of estate Rs. 2,500/
Total = Rs.5,01,500/”
3. On perusal of the judgment under appeal, it is evident
that the High Court has not provided for future prospects
while computing the compensation amount under the head
‘loss of dependency’. The necessity to provide future prospects
has been expounded by the Constitution Bench of this Court
in National Insurance Company Ltd. (supra). It will be
useful to reproduce paragraph No.59 of the said judgment,
which reads thus:
“59. 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 selfemployed or a person who is
on a fixed 44 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
4
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 selfemployed
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
increments and pay revision or for some other change in
service conditions, there is always a 45 competing
attitude in the private sector to enhance the salary to get
better efficiency from the employees. Similarly, a person
who is selfemployed 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 selfemployed 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, degreetest is imperative.
Unless the degreetest is applied and left to the parties to
adduce evidence to establish, it would be unfair and
inequitable. The degreetest has to have the inbuilt
concept of 46 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
5
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.”
Again, in the concluding paragraph No.61 the Court observed
thus:
“61. In view of the aforesaid analysis, we proceed to
record our conclusions:
* * *
(iii) 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 48 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.
(iv) In case the deceased was selfemployed 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.”
4. On 03.03.2007, the deceased (Palani), who was only
around 21 years of age at the time, was riding a motorcycle
bearing Registration No. TN22 AP 5092 along with his friend,
6
one Haridass as a pillion rider, from Tambaram to
Chengalpattu on GST Road, Maraimalai Nagar, opposite
Vikram Hotel, when they collided with a bus bearing
Registration No. TN21 N 0943 belonging to the respondent
Transport Corporation, which was driven in a rash and
negligent manner. The deceased was unmarried and working
as a contract worker in Hyundai Car Company,
Sriperumbudur. Applying the dictum of the Constitution
Bench referred to above, the appellants are justified in
insisting for grant of future prospects at the rate of 40% of the
established income. The High Court has held that the earning
of the deceased at the relevant time can be taken as
Rs.4,000/ per month. The High Court did not provide 40%
towards future prospects on the established income of the
deceased. Thus, the monthly loss of dependency, in the facts
of the present case would be Rs.4,000 + 1,600 = Rs.5,600/.
5. In other words, instead of amount awarded by the High
Court towards loss of dependency in the sum of Rs.4,32,000/,
the same will stand modified to Rs.6,04,800/ (Rupees six
7
lakh four thousand eight hundred only) along with interest at
the rate of 9% (nine percent) per annum. We are not
disturbing the other directions given by the High Court in
respect of other heads.
6. Accordingly, the respondent Transport Corporation must
deposit the additional amount of compensation of
Rs.1,72,800/ (Rupees one lakh seventy two thousand eight
hundred only) along with interest, as awarded in the preceding
paragraph, within a period of eight weeks from the date of
receipt of the copy of this judgment in the Court of Additional
District & Sessions Judge, Fast Track CourtIV, Chennai
(Motor Accident Claims Tribunal, Chennai).
7. In other words, the compensation payable to the
appellants would be as follows:
(a) Loss of Dependency Rs.6,04,800/
[Rs.5,600 – 50% of 5600)×12×18]
(b) Loss of love and affection Rs. 60,000/
(c) Transport Rs. 5,000/
(d) Funeral Rs. 2,000/
(e) Loss of estate Rs. 2,500/
Total = Rs.6,74,300/
8
8. As a result, the Appeal stands allowed. The compensation
awarded by the High Court is enhanced from Rs.5,01,500/ to
Rs.6,74,300/ [Rupees six lakh seventy four thousand three
hundred only]. The respondent Transport Corporation is
directed to deposit the entire award amount as indicated above
with interest at 9% (nine percent) per annum less the amount
already deposited if any, within a period of eight weeks from
the date of receipt of a copy of this judgment and the
appellants shall be entitled to the compensation in the
proportion specified by the Tribunal. The first and second
appellants are entitled to withdraw the amount deposited
upon verification of due application and the share of the third
appellant (minor) shall be deposited in any of the nationalised
banks till she attains majority and the second
claimant/mother is entitled to withdraw interest thereon once
in three months towards meeting the needs of the minor. Upon
turning 18, the minor appellant is entitled to withdraw her
respective share.
9
9. Accordingly, the appeal is allowed in the
aforementioned terms with no order as to costs.
.………………………….CJI.
(Dipak Misra)
…………………………..….J.
(A.M. Khanwilkar)
…………………………..….J.
(Dr. D.Y. Chandrachud)
New Delhi;
February 09, 2018.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.1754 OF 2018
(Arising out of SLP (Civil) No.12416 of 2016)
Munusamy & Ors. …. Appellants
Versus
The Managing Director, Tamil Nadu State ….Respondent
Transport Corporation (Villupuram) Ltd.
J U D G M E N T
A.M. Khanwilkar, J.
1. This appeal emanates from the judgment and order
passed by the High Court of Judicature at Madras dated
16.04.2013 in C.M.A. No.2819 of 2012. The High Court
allowed the prayer for grant of enhanced compensation
amount in favour of the appellants. The appellants seek
further enhancement of compensation amount on the ground
2
that the High Court has not provided for future prospects,
while computing the compensation amount. The appellants
rely upon the recent decision of the Constitution Bench of this
Court in the case of National Insurance Company Ltd. Vs.
Pranay Sethi and Ors.1
, to buttress their submission.
2. Before we deal with the grievance of the appellants, it is
apposite to reproduce the relevant extract of the impugned
judgment which reads thus:
“7. We have heard the learned counsel for the respondent
on the above submission.
8. In the absence of specific proof of employment, the
Tribunal rightly has taken the earning of the deceased at
Rs.4,000/ per month and deducted 50% towards personal
expenses since the deceased were bachelors. However, the
proper multiplier to be adopted in the case must be 18, since
the deceased were 21 and 20 years respectively. A sum of
Rs.20,000/ to each of the claimants towards loss of love
and affection and a further sum of Rs.5,000/ towards
transport expenses were granted.
9. Accordingly, in C.M.A. No.2819 of 2012 compensation
payable would be as follows:
(a) Loss of Dependency Rs.4,32,000/
(Rs.4,000/×12×18)
(b) Loss of love and affection Rs. 60,000/
(c) Transport Rs. 5,000/
(d) Funeral Rs. 2,000/
1 AIR 2017 SC 5157
3
(e) Loss of estate Rs. 2,500/
Total = Rs.5,01,500/”
3. On perusal of the judgment under appeal, it is evident
that the High Court has not provided for future prospects
while computing the compensation amount under the head
‘loss of dependency’. The necessity to provide future prospects
has been expounded by the Constitution Bench of this Court
in National Insurance Company Ltd. (supra). It will be
useful to reproduce paragraph No.59 of the said judgment,
which reads thus:
“59. 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 selfemployed or a person who is
on a fixed 44 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
4
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 selfemployed
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
increments and pay revision or for some other change in
service conditions, there is always a 45 competing
attitude in the private sector to enhance the salary to get
better efficiency from the employees. Similarly, a person
who is selfemployed 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 selfemployed 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, degreetest is imperative.
Unless the degreetest is applied and left to the parties to
adduce evidence to establish, it would be unfair and
inequitable. The degreetest has to have the inbuilt
concept of 46 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
5
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.”
Again, in the concluding paragraph No.61 the Court observed
thus:
“61. In view of the aforesaid analysis, we proceed to
record our conclusions:
* * *
(iii) 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 48 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.
(iv) In case the deceased was selfemployed 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.”
4. On 03.03.2007, the deceased (Palani), who was only
around 21 years of age at the time, was riding a motorcycle
bearing Registration No. TN22 AP 5092 along with his friend,
6
one Haridass as a pillion rider, from Tambaram to
Chengalpattu on GST Road, Maraimalai Nagar, opposite
Vikram Hotel, when they collided with a bus bearing
Registration No. TN21 N 0943 belonging to the respondent
Transport Corporation, which was driven in a rash and
negligent manner. The deceased was unmarried and working
as a contract worker in Hyundai Car Company,
Sriperumbudur. Applying the dictum of the Constitution
Bench referred to above, the appellants are justified in
insisting for grant of future prospects at the rate of 40% of the
established income. The High Court has held that the earning
of the deceased at the relevant time can be taken as
Rs.4,000/ per month. The High Court did not provide 40%
towards future prospects on the established income of the
deceased. Thus, the monthly loss of dependency, in the facts
of the present case would be Rs.4,000 + 1,600 = Rs.5,600/.
5. In other words, instead of amount awarded by the High
Court towards loss of dependency in the sum of Rs.4,32,000/,
the same will stand modified to Rs.6,04,800/ (Rupees six
7
lakh four thousand eight hundred only) along with interest at
the rate of 9% (nine percent) per annum. We are not
disturbing the other directions given by the High Court in
respect of other heads.
6. Accordingly, the respondent Transport Corporation must
deposit the additional amount of compensation of
Rs.1,72,800/ (Rupees one lakh seventy two thousand eight
hundred only) along with interest, as awarded in the preceding
paragraph, within a period of eight weeks from the date of
receipt of the copy of this judgment in the Court of Additional
District & Sessions Judge, Fast Track CourtIV, Chennai
(Motor Accident Claims Tribunal, Chennai).
7. In other words, the compensation payable to the
appellants would be as follows:
(a) Loss of Dependency Rs.6,04,800/
[Rs.5,600 – 50% of 5600)×12×18]
(b) Loss of love and affection Rs. 60,000/
(c) Transport Rs. 5,000/
(d) Funeral Rs. 2,000/
(e) Loss of estate Rs. 2,500/
Total = Rs.6,74,300/
8
8. As a result, the Appeal stands allowed. The compensation
awarded by the High Court is enhanced from Rs.5,01,500/ to
Rs.6,74,300/ [Rupees six lakh seventy four thousand three
hundred only]. The respondent Transport Corporation is
directed to deposit the entire award amount as indicated above
with interest at 9% (nine percent) per annum less the amount
already deposited if any, within a period of eight weeks from
the date of receipt of a copy of this judgment and the
appellants shall be entitled to the compensation in the
proportion specified by the Tribunal. The first and second
appellants are entitled to withdraw the amount deposited
upon verification of due application and the share of the third
appellant (minor) shall be deposited in any of the nationalised
banks till she attains majority and the second
claimant/mother is entitled to withdraw interest thereon once
in three months towards meeting the needs of the minor. Upon
turning 18, the minor appellant is entitled to withdraw her
respective share.
9
9. Accordingly, the appeal is allowed in the
aforementioned terms with no order as to costs.
.………………………….CJI.
(Dipak Misra)
…………………………..….J.
(A.M. Khanwilkar)
…………………………..….J.
(Dr. D.Y. Chandrachud)
New Delhi;
February 09, 2018.
