Case Note & Summary
The appeal was filed by The New India Assurance Co. Ltd. against the judgment and award dated 30.11.2016 passed by the Motor Accidents Claims Tribunal, Wardha in M.A.C.P. No. 26/2015. The claimants, widow and daughters of deceased Gunwanta, sought compensation for his death in a motor vehicle accident on 19.12.2014. The deceased was a 35-year-old mason earning Rs.500 per day. The Tribunal awarded Rs.11,03,500 with 9% interest. The Insurance Company challenged the award on grounds of excessive compensation and incorrect application of multiplier and future prospects. The High Court held that future prospects of 40% should be added as per Pranay Sethi, the multiplier should be 16 as per Sarla Verma, and deduction of 1/4th for personal expenses was correct. The court recalculated compensation: notional income Rs.6,000 per month, plus 40% future prospects = Rs.8,400, minus 1/4th deduction = Rs.6,300, multiplied by 12 and multiplier 16 = Rs.12,09,600, plus conventional heads Rs.70,000 = Rs.12,79,600. However, since the claimants did not cross-appeal, the court reduced the award to Rs.9,63,500 (the amount awarded by Tribunal minus Rs.1,40,000 for future prospects and multiplier correction) and reduced interest to 7.5% per annum. The appeal was partly allowed.
Headnote
A) Motor Accident Compensation - Future Prospects - Self-Employed Person - Addition of 40% for future prospects is permissible for a self-employed mason aged 35 years under the principles laid down in National Insurance Co. Ltd. v. Pranay Sethi - Held that the Tribunal erred in not adding future prospects, and the High Court added 40% to the notional income (Paras 7-9). B) Motor Accident Compensation - Multiplier - Age of Deceased - Multiplier of 16 is applicable for a deceased aged 35 years as per Sarla Verma v. Delhi Transport Corporation - Held that the Tribunal's use of multiplier 17 was incorrect, and the High Court corrected it to 16 (Paras 10-11). C) Motor Accident Compensation - Deduction for Personal Expenses - Number of Dependents - Deduction of 1/4th for personal expenses is correct when there are four dependents - Held that the Tribunal's deduction of 1/4th was proper (Para 12). D) Motor Accident Compensation - Interest Rate - Reduction from 9% to 7.5% - In view of the prevailing rate of interest, the High Court reduced the interest rate from 9% to 7.5% per annum - Held that the interest rate is modified (Para 13).
Issue of Consideration
Whether the Motor Accidents Claims Tribunal erred in awarding compensation without adding future prospects and in applying the correct multiplier and deduction for personal expenses.
Final Decision
The appeal is partly allowed. The impugned award is modified. The compensation is reduced from Rs.11,03,500 to Rs.9,63,500. The rate of interest is reduced from 9% to 7.5% per annum from the date of application till realization. The award is modified accordingly.
Law Points
- Future prospects for self-employed persons
- Multiplier determination
- Deduction for personal expenses
- Interest rate on compensation
