Case Note & Summary
The appellants, widow and minor children of deceased Maruti Alhat, filed a claim petition under Section 166 of the Motor Vehicles Act, 1988, seeking compensation for his death in a motor vehicle accident on 08/07/1988. The deceased was 27 years old, employed as a driver at Mahindra and Mahindra Co., earning Rs.2,000 per month plus bonus. The Tribunal held that the accident was caused due to rash and negligent driving by the driver of the ST bus, but awarded compensation of Rs.1,60,000 with interest at 12% p.a., applying a multiplier of 10 and deducting 1/3rd for personal expenses. The appellants appealed, contending that the multiplier should be 17 as per Sarla Verma v. DTC, and that future prospects should be added. The High Court allowed the appeal, holding that the appropriate multiplier for a 27-year-old is 17, and that 40% future prospects should be added as per Pranay Sethi. The court recalculated the compensation: monthly income Rs.2,000, plus 40% future prospects = Rs.2,800, minus 1/3rd personal expenses = Rs.1,867, annual dependency = Rs.22,404, multiplied by 17 = Rs.3,80,868, rounded to Rs.3,81,000. The court also reduced the interest rate to 9% p.a. from the date of petition till realization. The impugned award was modified accordingly.
Headnote
A) Motor Accident Claims - Compensation - Multiplier - The Tribunal applied multiplier of 10 for deceased aged 27 years, which is contrary to the settled law in Sarla Verma v. DTC, (2009) 6 SCC 121, where the appropriate multiplier for age group 26-30 is 17. - Held that the multiplier should be 17. (Paras 6-7) B) Motor Accident Claims - Future Prospects - The Tribunal failed to add future prospects to the income of the deceased, who was 27 years old and had a permanent job. - As per National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, 40% addition towards future prospects is warranted for a self-employed or permanent employee below 40 years. - Held that 40% future prospects should be added. (Paras 8-9) C) Motor Accident Claims - Deduction for Personal Expenses - The Tribunal deducted 1/3rd towards personal expenses, which is correct as per Sarla Verma for a married person with dependents. - No interference required. (Para 10) D) Motor Accident Claims - Interest Rate - The Tribunal awarded interest at 12% p.a., which is on the higher side. - Held that interest at 9% p.a. is appropriate. (Para 11)
Issue of Consideration
Whether the Tribunal erred in applying a multiplier of 10 instead of 17 as per the Sarla Verma case, and whether future prospects should be added to the income of the deceased.
Final Decision
The appeal is allowed. The impugned award is modified. The compensation is enhanced to Rs.3,81,000 with interest at 9% p.a. from the date of petition till realization. The respondent no.2 (owner of the bus) is directed to pay the enhanced amount within eight weeks.
Law Points
- Motor Vehicles Act
- 1988
- Section 166
- Compensation
- Multiplier
- Future Prospects
- Deduction for Personal Expenses
- Interest Rate
