Case Note & Summary
The appeal arises from a judgment and award dated 7.1.2002 passed by the Claims Tribunal, Mumbai in Claim Application No.2518 of 1992. The appellants, legal heirs of deceased Neville Behram Tarapore, filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 seeking compensation of Rs.25 lakhs for his death in a motor vehicular accident on 12.7.1994. The deceased, aged 46, was employed with Central Bank of India and earning Rs.9,000 per month. The offending vehicle was owned by respondent no.1 and insured by respondent no.2. The Tribunal held that the accident was caused due to rash and negligent driving of the offending vehicle. It assessed the income at Rs.9,000 per month, deducted 1/3rd towards personal expenses, applied multiplier of 12, and awarded Rs.9,64,000 for loss of dependency, plus Rs.10,000 for loss of consortium, Rs.10,000 for loss of love and affection, and Rs.2,000 for funeral expenses, totaling Rs.9,61,000 with interest at 6% per annum from January 2000. The appellants challenged the award seeking enhancement. The High Court found that the Tribunal erred in applying multiplier of 12 instead of 16 as per the Second Schedule, and in not granting future prospects. Following the principles in Sarla Verma v. DTC and National Insurance Co. Ltd. v. Pranay Sethi, the Court held that the correct multiplier is 16, 15% should be added for future prospects, deduction for personal expenses should be 1/4th (since there are 5 dependents), and conventional heads should be enhanced to Rs.40,000 for loss of consortium, Rs.15,000 for loss of estate, and Rs.15,000 for funeral expenses. The Court recalculated the compensation: monthly income Rs.9,000 + 15% future prospects = Rs.10,350; annual income Rs.1,24,200; less 1/4th deduction = Rs.93,150; multiplied by 16 = Rs.14,90,400; plus Rs.40,000 + Rs.15,000 + Rs.15,000 = Rs.15,60,400. The Court allowed the appeal, set aside the Tribunal's award, and awarded Rs.15,60,400 with interest at 6% per annum from the date of the claim petition till realization.
Headnote
A) Motor Accident Claims - Compensation - Multiplier - The Tribunal applied multiplier of 12 based on the age of the deceased (46 years) but as per Sarla Verma v. DTC, (2009) 6 SCC 121, the correct multiplier for age 46 is 13, and as per National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, for age 46-50, multiplier is 13. However, the High Court applied multiplier of 16 as per the Second Schedule to the Motor Vehicles Act, 1988, which is applicable for age group 40-50. Held that the multiplier should be 16. (Paras 6-7) B) Motor Accident Claims - Future Prospects - The Tribunal did not grant any addition towards future prospects. As per Pranay Sethi, for a person aged 46 years in a permanent job, 15% addition towards future prospects is warranted. Held that 15% should be added to the income. (Para 8) C) Motor Accident Claims - Deduction for Personal Expenses - The Tribunal deducted 1/3rd towards personal expenses. Since the deceased had 5 dependents (parents, widow, and two children), as per Sarla Verma, deduction should be 1/4th. Held that deduction should be 1/4th. (Para 9) D) Motor Accident Claims - Conventional Heads - The Tribunal awarded Rs.10,000 for loss of consortium, Rs.10,000 for loss of love and affection, and Rs.2,000 for funeral expenses. As per Pranay Sethi, the amounts should be Rs.40,000 for loss of consortium, Rs.15,000 for loss of estate, and Rs.15,000 for funeral expenses. Held that the compensation under conventional heads be enhanced accordingly. (Para 10)
Issue of Consideration
Whether the Claims Tribunal erred in applying multiplier of 12 instead of 16 and in not granting future prospects and adequate compensation under conventional heads.
Final Decision
The appeal is allowed. The impugned judgment and award dated 7.1.2002 is set aside. The appellants are entitled to compensation of Rs.15,60,400 with interest at 6% per annum from the date of the claim petition till realization. The respondent no.2 insurance company is directed to pay the enhanced compensation within eight weeks.
Law Points
- Motor Vehicles Act
- 1988
- Section 166
- Compensation
- Multiplier
- Future Prospects
- Deduction for Personal Expenses
- Loss of Consortium
- Funeral Expenses
