Delhi High Court
Reliance General Insurance ... vs Smt. Saraswati Negi & Ors. on 12 September, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 12th September, 2012
+ MAC.APP. 314/2011
RELIANCE GENERAL INSURANCE COMPANY LTD...... Appellant
Through: Mr. Pankaj Seth, Adv.
versus
SMT. SARASWATI NEGI & ORS. ..... Respondents
Through: Mr. Anshuman Bal, Adv. for R-1 & R-2.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J. (ORAL)
1. The Appeal is for reduction of compensation of `12,37,696/- awarded by
the Motor Accident Claims Tribunal (the Claims Tribunal) for the death
of Sanjeev Negi, who died in a motor vehicle accident which occurred on
30.11.2007.
2. At the time of hearing of the Appeal, the following contentions are raised
on behalf of the Appellant:-
(i) The multiplier has to be as per the age of the deceased or the
Claimant whichever is higher. The Claims Tribunal erred in
adopting the multiplier of 16 as per the age of the deceased.
(ii) Only parents were the dependents, thus, the deduction towards the
personal and living expenses should have been one-half instead of
one-third taken by the Claims Tribunal.
3. On the other hand, learned counsel for the Claimants supports the
judgment. He submits that the compensation awarded is just and
reasonable and does not call for any interference.
4. In my view, the Appeal must succeed on both the grounds.
5. In Vijay Laxmi & Ors. v. Binod Kumar Yadav & Ors., MAC
APP.1148/2011 decided on 03.01.2012 this Court noticed the Supreme
Court judgments in U.P. State Road Transport Corporation & Ors. v.
Trilok Chandra & Ors., (1996) 4 SCC 362; G.M., Kerala SRTC v.
Susamma Thomas, (1994) 2 SCC 176; New India Assurance Company
Ltd. v. Shanti Pathak (Smt.) & Ors., (2007) 10 SCC 1 and National
Insurance Company Ltd. v. Shyam Singh & Ors., (2011) 7 SCC 65,
decided on 04.07.2011 and held that the multiplier has to be as per the
age of the deceased or that of the Claimants whichever is higher. Paras
4,5,7 and 8 of the report are extracted hereunder:-
"4. As far as the selection of multiplier is concerned, the law is
settled that the choice of multiplier is determined by the age of the
deceased or that of the claimants whichever is higher. There is a
three Judges Bench judgment of the Supreme Court in U.P. State
Road Transport Corporation & Ors. v. Trilok Chandra & Ors.,
(1996) 4 SCC 362, where the Supreme Court relied on G.M.,
Kerala SRTC v. Susamma Thomas, (1994) 2 SCC 176 and
reiterated that the choice of the multiplier is determined by the age
of the deceased or that of the claimants whichever is more. Para
12 of the report is extracted hereunder:-
"12. For concluding the analysis it is necessary now to
refer to the judgment of this Court in the case of General
Manager, Kerala State Road Transport, v. Susamma
Thomas: (1994) 2 SCC 176. In that case this Court culled
out the basic principles governing the assessment of
compensation emerging from the legal authorities cited
above and reiterated that the multiplier method is the sound
method of assessing compensation. The Court observed:
"The multiplier method involves the
ascertainment of the loss of dependency or the
multiplicand having regard to the
circumstances of the case and capitalizing the
multiplicand by an appropriate multiplier. The
choice of the multiplier is determined by the
age of the deceased (or that of the claimants,
whichever is higher) and by the calculation as
to what capital sum, if invested at a rate of
interest appropriate to a stable economy, would
yield the multiplicand by way of annual
interest. In ascertaining this, regard should
also be had to the fact that ultimately the
capital sum should also be consumed-up over
the period for which the dependency is expected
to last.
The principle was explained and illustrated by a
mathematical example:
"The multiplier represents the number of Years'
purchase on which the loss of dependency is
capitalised. Take for instance a case where
annual loss of dependency is Rs. 10,000. If a
sum of Rs.1,00,000 is invested at 10% annual
interest, the interest will take care of the
dependency, perpetually. The multiplier in this
case works out to 10. If the rate of interest is
5% per annum and not 10% then the multiplier
needed to capitalise the loss of the annual
dependency at Rs.10,000 would be 20. Then the
multiplier i.e., the number of Years' purchase of
20 will yield the annual dependency
perpetually. Then allowance to scale down the
multiplier would have to be made taking into
account the uncertainties of the future, the
allowances for immediate lump sum payment,
the period over which the dependency is to last
being shorter and the capital feed also to be
spent away over the period of dependency is to
last etc. Usually in English Courts the operative
multiplier rarely exceeds 16 as maximum. This
will come down accordingly as the age of the
deceased person (or that of the dependents,
whichever is higher) goes up."
5. There is another three Judges' decision of the Supreme Court in
New India Assurance Company Ltd. v. Shanti Pathak (Smt.) &
Ors., (2007) 10 SCC 1, where in the case of the death of a
bachelor, who was aged only 25 years, the multiplier of 5 was
applied according to the age of the mother of the deceased, who
was about 65 years at the time of the accident. Para 6 of the
report is extracted hereunder:-
"6. Considering the income that was taken, the foundation
for working out the compensation cannot be faulted. The
monthly contribution was fixed at Rs.3,500/-. In the normal
course we would have remitted the matter to the High Court
for consideration on the materials placed before it. But
considering the fact that the matter is pending since long, it
would be appropriate to take the multiplier of 5 considering
the fact that the mother of the deceased is about 65 years at
the time of the accident and age of the father is more than 65
years. Taking into account the monthly contribution at
Rs.3,500/- as held by the Tribunal and the High Court, the
entitlement of the claim would be Rs.2,10,000/-. The same
shall bear interest @ 7.5% p.a. from the date of the
application for compensation. Payment already made shall
be adjusted from the amount due."
x x x x x x x x x
7. In the latest judgment of the Supreme Court in National
Insurance Company Ltd. v. Shyam Singh & Ors., (2011) 7 SCC 65,
decided on 04.07.2011, the Supreme Court referred to Ramesh
Singh & Anr. v. Satbir Singh & Anr., (2008) 2 SCC 667 and held
that the multiplier as per the age of the deceased or the claimant
whichever is higher would be applicable. Para 9 and 10 of the
report are apposite:-
"9. This Court in the case of Ramesh Singh & Anr. v.
Satbir Singh & Anr., (2008) 2 SCC 667, after referring to
the earlier judgments of this Court, in detail, dealt with the
law with regard to determination of the multiplier in a
similar situation as in the present case. The said findings of
this Court are as under:-
"6. We have given anxious consideration to
these contentions and are of the opinion that
the same are devoid of any merits. Considering
the law laid down in New India Assurance Co.
Ltd. v. Charlie, AIR 2005 SC 2157, it is clear
that the choice of multiplier is determined by
the age of the deceased or claimants whichever
is higher. Admittedly, the age of the father was
55 years. The question of mother's age never
cropped up because that was not the contention
raised even before the Trial Court or before us.
Taking the age to be 55 years, in our opinion,
the courts below have not committed any
illegality in applying the multiplier of 8 since
the father was running 56th year of his life."
10. In our view, the dictum laid down in Ramesh Singh
(supra) is applicable to the present case on all fours.
Accordingly, we hold that the Tribunal had rightfully
applied the multiplier of 8 by taking the average of the
parents of the deceased who were 55 and 56 years."
8. Similarly in Manam Saraswathi Sampoorna Kalavathi & Ors.,
v. The Manager, APSRTC, Tadepalligudem A.P. & Anr., (2010) 5
SCC 785, decided on 26.03.2010, the multiplier of 13 was applied
in case of death of a young bachelor where the mother was 47
years of age."
6. Thus, in my view, the Claims Tribunal erred in adopting the multiplier of
16. There was no evidence with regard to the age of the deceased's
mother. As per the Affidavit filed by the Second Respondent, his age
was 58 years. Therefore, I will take the deceased's mother's age to be 55-
60 years. The appropriate multiplier, in the circumstances would be 9.
7. In Sarla Verma (Smt.) & Ors. v. Delhi Transport Corporation & Anr.,
(2009) 6 SCC 121, the Hon'ble Supreme Court considered General
Manager, Kerala State Road Transport Corporation, Trivandrum v.
Susamma Thomas (Mrs.) and Ors. (1994) 2 SCC 176; U.P. SRTC v.
Trilok Chandara, (1996) 4 SCC 362; and Fakeerappa v. Karanataka
Cement Pipe Factory, (2004) 2 SCC 473 and held that in case of death of
a bachelor the deduction towards the personal and living expenses should
be 50%.
8. In this case, the deceased had no dependents except his parents. The
deduction towards the personal and living expenses would therefore, be
50%. The loss of dependency thus comes to `5,05,278/- (6238/- + 50% x
1/2 x 12 x 9).
9. I would further make a provision of `25,000/- towards loss of love and
affection and `10,000/- each towards loss to estate and funeral expenses.
10. The overall compensation thus comes to ` 5,50,278/- which shall carry
interest @ 8% per annum as granted by the Claims Tribunal.
11. The excess amount of ` 6,87,418/- along with proportionate interest and
the interest accrued, if any, during the pendency of the Appeal shall be
refunded to the Appellant Insurance Company.
12. The amount awarded by this Court shall be disbursed in favour of the
Claimants in terms of the order passed by the Claims Tribunal.
13. The statutory deposit of `25,000/- be refunded to the Appellant Insurance
Company.
14. The Appeal is allowed in above terms.
15. Pending Applications also stand disposed of.
(G.P. MITTAL)
JUDGE
SEPTEMBER 12, 2012
vk
