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Judgment
174 paragraphs · 3,638 words1 This appeal filed under Section 173 of Motor Vehicles Act, 1988 by the claimants against the award dated 23rd May 2013 passed by the Motor
Accident Claims Tribunal („Tribunal‟), raises following important question of law for determination:
“Whether, for working out compensation under Motor Vehicles Act in the case of a bachelor, selection of multiplier is to be made by reference to
the age of the deceased or that of the claimant ?
2 In the instant appeal, the aforesaid question has arisen in the context of a bachelor, who had died in the motor vehicular accident. The facts, in brief,
that would be necessary to determine the aforesaid question and the appeal are being noticed.
3 A motor vehicular accident took place at Thathri near New Bridge on 11th April 2012 at 4.00 pm in which the deceased Raj Kumar, a bachelor
aged about 25 years, got injured and later on succumbed to the injuries in the Government Medical College Hospital Jammu. The accident was as a
result of rash and negligent driving of the offending vehicle by the driver Baljeet Singh.Â
4 The parents of the deceased along with three brothers of the deceased filed a claim petition seeking compensation to the tune of Rs. 26.00 lacs.
The claim petition was contested by the respondents including the Oriental Insurance Company Ltd., which had ensured the offending vehicle and had
assured to indemnify the owner. The issues were struck by the Tribunal. On facts, the Tribunal found that accident was on account of rash and
negligent driver of the driver Baljeet Singh and, thus, held the appellants-claimants entitled to compensation in the following manner:
Loss of Dependency Rs.30000x10= Rs.3,00,000/-
Funeral expenses = Rs.5000/-
Loss of Estate   =Rs.5000/-
 Total.   = Rs.3,10,000/-
5 What is disputed before this Court by the appellants is the application of multiplier by the Tribunal for computing the loss of dependency. The
Tribunal has applied the multiplier of 10 by taking into consideration the age of younger parent i.e appellant No.2.Â
6 It is urged by the learned counsel for the appellants that multiplier to be applied has to be as per the age of the deceased and not as per the age of
the claimant. In support of his contention, learned counsel for the appellants places reliance on the Judgment of Hon‟ble Supreme Court rendered in
the case ofSarla Verma and ors vs Delhi Transport Corporation and anr, AIR 2009 SC 3104, Reshma Kumari v.Madan Mohan, 2013 ACJ 1253 (SC).
Learned counsel for the appellants by placing reliance on the Constitution Bench Judgment of the Supreme Court rendered in the case of National
Insurance Co. Ltd vs Pranay Sethi, 2017 ACJ 2700 urges that in view of the law enunciated by the Constitutional Bench of the Supreme Court, the
issue is no longer res integra and the multiplier to be applied has to be as per the age of the deceased. The Hon‟ble Supreme Court, it is urged, in
the aforesaid case of Pranay Sethi (supra) has made no distinction between a bachelor or married person in the matter of applying the relevant
multiplier. 7 Per contra, learned counsel appearing for the respondents-Insurance Company urges that in view of law laid down in the case of U.P.
STATE ROAD TRANSPORT CORPORATION AND OTHERS vs TRILOK CHANDRA & OTHERS 1996 ACJ 831 (SC), it is now
settled that choice of multiplier is determined by the age of the deceased and that of the claimant which ever is higher. Learned counsel further
submits that the judgment relied upon by the counsel for the appellants were rendered by two Judge Bench, whereas judgment in the case of Trilok
Chandra has been rendered by a three Judge Bench and, therefore, needs to be followed as binding precedent.
8 Having heard learned counsel for the parties and perused the record, I am inclined to accept this appeal and hold the issue of applicability of
multiplier in favour of the appellants for the reasons hereinafter mentioned. The three Judge Bench in the case of Trilok Chandra (supra) on the issue
in paragraph No.18 held as under:
“18. We must at once point out that the calculation of compensation and the amount worked out in the Schedule suffer from several defects. For
example, in Item 1 for a victim aged 15 years, the multiplier is shown to be 15 years and the multiplicand is shown to be Rs 3000. The total should be
3000 × 15 = 45,000 but the same is worked out at Rs 60,000. Similarly, in the second item the multiplier is 16 and the annual income is Rs 9000; the
total should have been Rs 1,44,000 but is shown to be Rs 1,71,000. To put it briefly, the Table abounds in such mistakes. Neither the tribunals nor the
courts can go by the ready reckoner. It can only be used as a guide. Besides, the selection of multiplier cannot in all cases besolely dependent on the
age of the deceased. For example, if thedeceased, a bachelor, dies at the age of 45 and his dependants are hisparents, age of the parents would also
be relevant in the choice of themultiplier. But these mistakes are limited to actual calculations only and not in respect of other items. What we propose
to emphasise is that the multiplier cannot exceed 18 years’ purchase factor. This is the improvement over the earlier position that ordinarily it
should not exceed 16. We thought it necessary to state the correct legal position as courts and tribunals are using higher multiplier as in the present
case where the Tribunal used the multiplier of 24 which the High Court raised to 34, thereby showing lack of (1994) 2 SCC 176 awareness of the
background of the multiplier system in Davies case.†(underlining is mine)
9 In Trilok Chandra‟s case (supra), the three Judge Bench affirmed in an earlier decision of the Supreme Court in the case of General Manager,
Kerala State Road Transport Corporationv.Susamma Thomas, 1994 ACJ 1 (SC) with regard to the adoption and selection of multiplier according to
the age of the deceased or the claimant whichever is higher.
10 There was some confusion as to the selection of multiplier because of the multiplier table as given in the Second Schedule to the Motor Vehicles
Act, 1988 under Section 163-A. In some of the cases, the Courts had adopted the multiplier as given in the Second Schedule. In Trilok Chandra’s
case, the three Judge Bench had noticed some clerical mistakes in the multiplier table as given in the Second Schedule and had held that the said table
was not conclusive on the applicability of the multiplier and, therefore, could be taken as a guide. Noticing the wide variations in the selection of
multiplier, a two Judge Bench Supreme Court in Sarla Verma’s case (supra) made an attempt to reconcile the method of selection of multiplier as
adopted in the cases ofSusamma Thomas, Trilok Chandra and New India Assurance Company Ltd vs Charlie and anr, (2005) ACJ 1131 (SC)
and in the Second Schedule. It compared what was provided in the aforesaid judgments and the Second Schedule in a tabulated form. What was
ultimately provided in Sarla Verma’s case (supra) is contained in Paras 20 and 21 of the said decision which, for facility of reference, are
reproduced hereunder:
“20.Tribunals/courts adopt and apply different operative multipliers. Some follow the multiplier with reference to Susamma Thomas (set out in
column 2 of the table above); some follow the multiplier with reference to Trilok Chandra, (set out in column 3 of the table above); some follow the
multiplier with reference to Charlie (Set out in column (4) of the Table above); many follow the multiplier given in second column of the Table in the
Second Schedule of MV Act (extracted in column 5 of the table above); and some follow the multiplier actually adopted in the Second Schedule while
calculating the quantum of compensation (set out in column 6 of the table above). For example if the deceased is aged 38 years, the multiplier would
be 12 as per Susamma Thomas, 14 as per Trilok Chandra, 15 as per Charlie, or 16 as per the multiplier given in column (2) of the Second schedule to
theMV Actor 15 as per the multiplier actually adopted in the second Schedule toMV Act. Some Tribunals, as in this case, apply the multiplier of 22 by
taking the balance years of service with reference to the retiring age. It is necessary to avoid this kind of inconsistency. We are concerned with cases
falling undersection 166and not undersection 163Aof MV Act. In cases falling undersection 166of the MV Act, Davies method is applicable.
We therefore hold that the multiplier to be used should be as mentioned in column (4) of the Table above (prepared by applying Susamma
Thomas, Trilok Chandra and Charlie), which starts with an operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25 years), reduced by
one unit for every five years, that is M-17 for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and M-13 for
46 to 50 years, then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years and M-
5 for 66 to 70 yearsâ€.
11 In Sarla Verma’s case (supra), the Supreme Court was very specific and categoric that the multiplier, to be applied, should be with reference
to the age of the deceased. What was observed by the Supreme Court in para No.9 of the aforesaid decision is noteworthy and is reproduced
hereunder:
“9.Basically only three facts need to be established by the claimants for assessing compensation in the case of death : (a) age of the deceased; (b)
income of the deceased; and the (c) the number of dependents. The issues to be determined by the Tribunal to arrive at the loss of dependency are (i)
additions/deductions to be made for arriving at the income; (ii) the deduction to be made towards the personal living expenses of the deceased; and
(iii) the multiplier to be applied withreference of the age of the deceased.
..................................................................................................................................
..................................................................................................................................â€
   .......emphasis supplied
Though it was a two Judge Bench which decided Sarla Verma‟s case but later on, the judgment in Sarla Verma’s case (supra) was
considered by a three Judge Bench in the case of Reshma Kumari and ors vs Madan Mohan and another 2013 (9) SCC 65. In Reshma Kumari’s
case, a three Judge Bench was answering the reference. What was said by a three Judge Bench in Reshma Kumri’s case is succinctly stated
in paragraph 36 which reads thus:
“ In Sarla Verma17, this Court has endeavoured to simplify the otherwise complex exercise of assessment of loss of dependency and
determination of compensation in a claim made underSection 166. It has been rightly stated in Sarla Verma17 that claimants in case of death claim for
the purposes of compensation must establish (a) age of the deceased; (b) income of the deceased; and (c) the number of dependants. To arrive at the
loss of dependency, the Tribunal must consider (i) additions/deductions to be made for arriving at the income; (ii) the deductions to be made towards
the personal living expenses of the deceased; and (iii) the multiplier to be applied with reference to the age of the deceased. We do not think it is
necessary for us to revisit the law on the point as we are in full agreement with the view in Sarla Vermaâ€.
13 Subsequently, in the case of Munna lal Jain and anr vs Vipin Kumar Sharma and ors 2015 (6) SC 347, the position of law with regard to the
applicability of multiplier was restated by holding that the multiplier should depend on the age of the deceased and not on the age of the dependent.
The ratio laid down in Sarla Verma’s case and approved in the case of Reshma Kumari (supra) was, thus, reiterated in Munna Lal Jain’s
case. In view of the cleavage of opinion between Reshma Kumari’s case (supra) and Rajesh and others vs Rajbir Singh and ors 2013 (9) SC 54,
a two Judge Bench of the Supreme Court in National Insurance Company Ltd vs Pushpa and others referred the matter to the Larger Bench for
authoritative pronouncement. The reference came to be heard by a Constitution Bench in Pranay Sethi’s case (supra). The Constitution Bench
after thoroughly surveying the law with regard to the computation of compensation in the case of a death in a motor vehicular accident summed up its
conclusions in paragraph 61, which reads thus:
In view of the aforesaid analysis, we proceed to record our conclusions:-
(i) The two-Judge Bench in Santosh Devi should have been well advised to refer the matter to a larger Bench as it was taking a different view than
what has been stated in Sarla Verma, a judgment by a coordinate Bench. It is because a coordinate Bench of the same strength cannot take a
contrary view than what has been held by another coordinate Bench.
(ii) As Rajesh has not taken note of the decision in Reshma Kumari, which was delivered at earlier point of time, the decision in Rajesh is not a
binding precedent.
(iii) While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased
had a permanent job and was below the age of 40 years, should be made. The addition should be 30%, if the age of the deceased was between 40 to
50 years. In case the deceased was between the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary less
tax.
(iv) In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the
deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the
deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the
income minus the tax component.
(v) For determination of the multiplicand, the deduction for personal and living expenses, the tribunals and the courts shall be guided by paragraphs 30
to 32 of Sarla Verma which we have reproduced hereinbefore.
(vi) The selection of multiplier shall be as indicated in the Table in Sarla Verma read with paragraph 42 of that judgment.
(vii) The age of the deceased should be the basis for applying themultiplier.
(viii) Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/-
and Rs. 15,000/- respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three yearsâ€. (underlining is mine)
14 In view of the authoritative pronouncement of the Constitution Bench the issue with regard to the applicability of multiplier has been set at rest.
15 Despite the law having been clearly stated by the Supreme Court that the multiplier, to be applied, should be with reference to the age of the
deceased, yet the controversy has refused to die. Various High Courts have given contrary judgments making a fictional distinction for the purposes
of applying the multiplier in the case of a deceased bachelor. From the case law discussed above, nowhere the Supreme Court has made any
distinction between the deceased who may be 15,16 or 18 years old or a bachelor. The multiplier to be applied has been uniformly provided in Sarla
Verma‟s case which has been approved by a three Judge Bench in the cases of Reshma Kumari, Munna Lal Jain andfinally in Pranay Sethi. It is in
this context, the issue came up for consideration once again before the Supreme Court in the case of Sube Singh and anr vs Shyam Singh and ors
2018 (1) Law Herald (SC) 350. A three Judge Bench taking note of an earlier decision of the Supreme Court in the cases of Sarla Verma and Munna
LalJain reaffirmed the law as laid down in the aforementioned judgments and approved by the Constitution Bench in Pranay Sethi’s case (supra).
What was stated by the Supreme Court in Sube Singh’s case (supra)e in paragraph 4 is also reproduced hereunder:
“On the basis of the finding recorded by the Tribunal and affirmed by the High Court, it is evident that the deceased was23 years of age on t he
date of accident i.e. 22.09.2009. He was unmarried and his parents who filed the petition for compensation were in the age group of 40 to 45 years.
The High Court relying on the decision in the case of Ashvinbhai jayantilal Modi (supra), held that multiplier 14 will be applicable in the present
case, keeping in mind the age of the parents of the deceased. The legal position, however, is no more re integra. Inthe case of Munna Lal Jain
(supra) decided by a three Judge Benchof this Court, it is held that the multiplier should depend on the ageof the deceased and not on the age of the
dependents. We may usefully refer to the exposition in paragraph Nos. 11 and 12 of the reported decision, which read thus:
“11. The remaining question is only on multiplier. The High Court following Santosh Devi (supra), has taken 13as the multip lier. Whether the
multiplier should dependon the age of the dependent s or that of the deceased, hasbeen hanging fire for sometime; but that has been given a quietus by
another three Judge Bench decision in Reshma Kumar (supra). It was held that the multiplier is to be used with reference to the age of the
deceased.Â
One reason appears to be that there is certainty with regard to the age of the deceased but as far as that of dependents is concerned, there will
always be room fordispute as to w hether the age of the eldest or youngest oreven the average etc. is to b e taken. To quote
 “36.In Sarla Verma, this Court has endeavoured to simplify the otherwise complex exercise of assessment of loss of dependency and
determination of compensation in a claim made under Section 166.
 It has been rightly stated in Sarla Vermathat the claimants in case of death claim for the purposes of compensation must establish: (a) age of the
deceased; (b) income of the deceased; and (c) the number of dependents.Â
To arrive at the loss of dependency, the Tribunal must consider:
(i) additions/deductions to be made for arrivingat the income; (ii) the deductions to be made towards the personal living expenses of
thedeceased; and (iii) the multiplier to be appliedwith reference to the age of the deceased. We do not think it is necessary for us to revisit the law on
the Point as we are in full agreement with the view in Sarla Vermaâ€
In Sarla Verma (supra), at paragraph 19, a two Judge Bench dealt with this aspect in Step 2. To quote:
“19.xxxx xxxxxx xxxxÂ
Step 2 (ascertaining the multiplier)Having regard to the age of the dec eased and period of active career, the appropriate multiplier should be selected.
This does not mean ascertaining the number of years he would have lived or worked out for the accident having regard to several imponderables in
life and economic factors, a table of multipliers with reference to be age has been identified by this Court. The multiplier should be chosen
from the said table with reference to the age of the deceased.â€
Considering the aforementioned principle expounded in Sarla Verma (supra), which has been affirmed by the Constitution Bench of this Court in
National Insurance Company Ltd. Vs. Pranay Sethi and Ors., (2017) (4) Law Herald 2970 (SC): 2017 Law Herald. Org. 1565: AIR 2017 SC 5157,
the appellants are justified in insisting for applying multiplier 18.â€.Â
16 In view of the foregoing discussion, the question posed for determination is no longer res integra. In all the cases, whether deceased is a bachelor
or otherwise, multiplier to be applied for computing the compensation is to be with reference to the age of the deceased and not the age of the parents
or other dependents.Â
17 Having held thus keeping in view the age of the deceased i.e 25 years, the multiplier of 18 as is provided in paragraph 21 of Sarla Verma’s
case (supra) would be applicable. That apart, the appellants would also be entitled to funeral expenses to the extent of Rs.15000/- and loss of Estate
to the extent of Rs.15000/-. It is pertinent to mention here that the Tribunal has determined income of the deceased at Rs.5,000/- per month. The
Tribunal has not added 40% of the income of deceased towards futureprospects. Therefore, 40% of the income of deceased is also added towards
loss of future prospects. Thus, income of the deceased would be Rs.7000/- per month. After deducting 1/2 towards his personal expenses, annual loss
of dependency is Rs.42,000/- and, thus, loss of dependency would be Rs.42,000x18 = Rs.7,56,000/-.The total amount of compensation would thus
work out to be as under:
 1.Loss of dependency (42000x18): Rs.7,56,000/-
 2.Loss of funeral expenses:   Rs.15,000/-
 3.Loss of estate: Rs.15,000/-
 Total:   Rs.7,86,000/-Â
18. The appeal of the appellants is allowed and the award of the Tribunal is modified to the aforesaid extent.Â
19Â Record be sent back to the Tribunal.