Case Note & Summary
The case arises from a motor accident claim petition filed by the legal heirs of a deceased person who died in a vehicular accident. The deceased, a 23-year-old bachelor, was a tailor by profession earning Rs. 3,000 per month. The Motor Accident Claims Tribunal awarded compensation of Rs. 7,92,000 with interest at 9% per annum. The insurance company appealed challenging the quantum of compensation on grounds that the Tribunal failed to deduct personal expenses, applied an incorrect multiplier, and granted excessive future prospects. The claimants also filed a cross-objection seeking enhancement. The High Court, after hearing both sides, partly allowed the appeal. It held that 1/3rd of the income should be deducted towards personal expenses instead of none, applied multiplier of 17 instead of 18, and added 40% future prospects instead of 50%. The compensation was recalculated as Rs. 6,80,000 with interest at 9% per annum. The court confirmed the interest rate and dismissed the cross-objection.
Headnote
A) Motor Accident Claims - Compensation - Deduction for Personal Expenses - Deceased was a bachelor aged 23 years - Tribunal erred in not deducting any amount towards personal expenses - As per Sarla Verma v. DTC, for a bachelor, 50% is to be deducted towards personal expenses - However, since the claimants are parents and siblings, deduction of 1/3rd is appropriate - Held that 1/3rd of the income is to be deducted towards personal expenses (Paras 7-8). B) Motor Accident Claims - Compensation - Multiplier - Deceased aged 23 years - Tribunal applied multiplier of 18 - As per Sarla Verma, for age group 21-25, multiplier is 18 - However, since the deceased was a bachelor and claimants are parents, multiplier of 17 is applicable as per Sarla Verma - Held that multiplier of 17 is to be applied (Para 9). C) Motor Accident Claims - Compensation - Future Prospects - Deceased was a self-employed tailor earning Rs. 3,000 per month - Tribunal granted 50% future prospects - As per Pranay Sethi, for self-employed, 40% future prospects is to be added if deceased is below 40 years - Held that 40% future prospects is to be added (Para 10). D) Motor Accident Claims - Compensation - Interest Rate - Tribunal awarded interest at 9% per annum - Insurance company contended it is on higher side - However, considering the date of accident and prevailing rates, 9% is reasonable - Held that interest at 9% per annum is confirmed (Para 11).
Issue of Consideration
Whether the Motor Accident Claims Tribunal erred in awarding compensation without deducting personal expenses of the deceased and in applying the multiplier of 18 instead of 17, and whether the claimants are entitled to future prospects.
Final Decision
The appeal is partly allowed. The compensation is reduced from Rs. 7,92,000 to Rs. 6,80,000 with interest at 9% per annum from the date of petition till realization. The insurance company is directed to deposit the modified amount within six weeks. The cross-objection (Civil Application No.4094 of 2017) is dismissed.
Law Points
- Deduction for personal expenses
- Multiplier as per Sarla Verma
- Future prospects for self-employed
- Contributory negligence not applicable
- Interest rate on compensation
