Case Note & Summary
The present appeal under Section 173 of the Motor Vehicles Act, 1988, was filed by the original claimants, being the legal heirs of the deceased Shravankumar Rai, who died in a motor accident on 18.08.1995. The claimants, including the widow and children, sought enhancement of compensation awarded by the Motor Accident Claims Tribunal (Aux.) Bhavnagar in MACP No. 539 of 1995, which had partly allowed the claim petition under Section 166 of the Act, awarding Rs. 5,31,700/- with interest at 7.5% per annum. The claimants had originally claimed Rs. 12 lakhs. The deceased was a self-employed tailor earning Rs. 3,000 per month. The Tribunal assessed the income at Rs. 3,000 per month, applied multiplier of 16, deducted 1/3rd towards personal expenses, and awarded Rs. 5,000 for loss of consortium, Rs. 5,000 for loss of estate, and Rs. 2,000 for funeral expenses. The High Court, relying on National Insurance Co. Ltd. v. Pranay Sethi and Sarla Verma v. Delhi Transport Corporation, held that the Tribunal erred in not adding future prospects. Since the deceased was aged 35 years and self-employed, 40% addition for future prospects was warranted, making the income Rs. 4,200 per month. The appropriate multiplier for age 35 is 18, not 16. Deduction for personal expenses should be 1/4th as there were 5 dependents. Under conventional heads, the amounts were enhanced to Rs. 40,000 for loss of consortium, Rs. 15,000 for loss of estate, and Rs. 15,000 for funeral expenses. The total compensation was recalculated as Rs. 8,56,800/-. The appeal was partly allowed, enhancing the compensation by Rs. 3,25,100/- with interest at 7.5% per annum from the date of claim petition till realization.
Headnote
A) Motor Accident Compensation - Assessment of Income - Deceased was a self-employed tailor earning Rs. 3,000 per month - Tribunal erred in not considering future prospects - As per National Insurance Co. Ltd. v. Pranay Sethi, 40% addition for future prospects is applicable - Held that the income should be assessed at Rs. 4,200 per month after adding 40% (Paras 6-8). B) Motor Accident Compensation - Multiplier - Deceased aged 35 years - Tribunal applied multiplier of 16 - As per Sarla Verma v. Delhi Transport Corporation, multiplier of 18 is applicable for age group 31-35 - Held that multiplier of 18 should be applied (Para 9). C) Motor Accident Compensation - Deduction for Personal Expenses - Deceased was married with 5 dependents - Tribunal deducted 1/3rd towards personal expenses - As per Sarla Verma, deduction should be 1/4th for 4 to 6 dependents - Held that 1/4th deduction is correct (Para 10). D) Motor Accident Compensation - Conventional Heads - Tribunal awarded Rs. 5,000 for loss of consortium, Rs. 5,000 for loss of estate, and Rs. 2,000 for funeral expenses - As per Pranay Sethi, these amounts should be Rs. 40,000, Rs. 15,000, and Rs. 15,000 respectively - Held that enhanced amounts are awarded (Para 11). E) Motor Accident Compensation - Interest Rate - Tribunal awarded interest at 7.5% per annum - No interference warranted as rate is reasonable (Para 12).
Issue of Consideration
Whether the Tribunal erred in assessing the income of the deceased, applying the multiplier, and awarding compensation under various heads, warranting enhancement.
Final Decision
The appeal is partly allowed. The judgment and award dated 29.11.2013 is modified. The claimants are entitled to total compensation of Rs. 8,56,800/- with interest at 7.5% per annum from the date of claim petition till realization. The enhanced amount of Rs. 3,25,100/- shall be paid by the respondents jointly and severally within eight weeks.
Law Points
- Motor Vehicles Act
- 1988
- Section 166
- Compensation
- Multiplier
- Future Prospects
- Deduction for Personal Expenses
- Interest Rate
