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DETERMINATION OF COMPENSATION APPLYING TWO MULTIPLIERS IS CLEARLY ERRONEOUS

THE METHOD OF DETERMINATION OF COMPENSATION APPLYING TWO MULTIPLIERS IS CLEARLY ERRONEOUS AND RUN COUNTER TO THE JUDGMENT OF THIS COURT: SC


Cause Title: R. Valli and Others v. Tamil Nadu State Transport Corporation Limited

Case Number: Civil Appeal No. 1269/2022 (Arising Out of SLP (Civil) No. 20913 of 2018)

Quorum: Justice Hemant Gupta and Justice V. Ramasubramanian

Judgment Date: 10/02/2022

Author: Pragash B, Advocate, Madurai Bench of Madras High Court




Background of the Case

The legal heirs of deceased V. Rajasekaran are in appeal against the order passed by the Honourable Madras High Court granting a compensation of Rs. 15,12,628/- with 7.5% interest from the date of petition till the date of realisation on account of the death of the deceased in a motor vehicle accident on 22.02.2011.

The deceased was riding a two-wheeler when a bus belonging to the respondent dashed into his vehicle. The deceased suffered head injuries and died instantly. He was born on 11.04.1956 and was 54 years old on the date of accident. On the basis of income and age, the Motor Accident Claim Tribunal, Chennai awarded a compensation of Rs. 13,82,628.

The Tribunal held that the accident occurred due to rash and negligent driving of the bus driver. The appellant examined PW-3, the Assistant Manager of M/S Areva T & D India Limited who deposed that the deceased received salary of Rs. 23,062.30. The Salary Certificate was produced as Ex.P.9. The learned Tribunal assessed the income at Rs.23,062/-. The Tribunal granted compensation on the following details:

A) Age of Superannuation – 58 years

B) Dependency Period – 3 years

C) Income Tax Deduction - @10%

D) Monthly income after tax deduction – Rs. 20,756/-

E) Personal Expenses Deduction – 1/4th

F) Compensation for period in employment – Rs. 5,60,412/- (3*12*15,567)

G) Multiplier adopted – 8 on 50% of income

H) Compensation after period in employment – Rs. 7,47,216/- (8*12*7,783.5)

I) Total Compensation – Rs. 13,82,628 (inclusive of compensation on conventional heads)

The High Court affirmed the split multiplier method adopted in this case (3+8) and enhanced the compensation under the conventional heads, so as to award a sum of Rs. 15,12,628/-. The appeal has been preferred by the appellants contending the split multiplier method adopted and submitted to consider the age of the deceased for multiplier fixation.

Findings of the Court

The Honourable Apex Court of India held that

“Thus, we find that the method of determination of compensation applying two multipliers is clearly erroneous and run counter to the judgment of this Court in Pranay Sethi, affirming the judgment in Sarla Verma. Since the deceased was 54 years of age on the date of incident, therefore, the suitable multiplier would be 11 as per the judgment of this Court in SarlaVerma approved by this Court in Pranay Sethi.” (Para 11)

Compensation Awarded by our Apex Court (Para 12)

A. Monthly Dependency – Rs. 20,756/-

B. Future Prospects (15% of monthly dependency) – Rs. 3,113/-

C. 1/4th Deduction towards Personal Expenses – Rs. 5,697/-

D. Total Dependency (A+B-C) – Rs. 17,902/-

E. Age Multiplier – 11

F. Compensation (D*12*11) – Rs. 23,63,064/-

G. Loss of Estate – Rs. 15,000/-

H. Funeral Expenses – Rs. 15,000/-

I. Consortium – Rs. 40,000/-

Total – Rs. 24,33,064/-

13. Thus the appellants are found entitled to compensation of Rs. 24,33,064/- with interest @ 9% from the date of filing of the claim application till realisation.

14. The appeal thus stands disposed of with costs throughout.



Cases Referred

1. Sarla Verma (Smt.) and Others v. Delhi Transport Corporation and Another, (2009) 6 SCC 121.

2. Reshma Kumari and Others v. Madam Mohan and Another, (2013) 9 SCC 65.

3. National Insurance Company Limited v. Pranay Sethi and Others, (2017) 16 SCC 680.

4. Uma Shankar and Others v. Revathy Vaidvel and Others, 2014 SCC OnLine Mad 846.

5. Smt. Kamlesh Devi and Others v. Sh. Kitab Singh and Others, 2011 SCC OnLine Del 2843.

6. Union of India and Others v. K.S. Lakshmi Kumar and Others, 2000 SCC OnLine Kar 406.

7. United India Insurance Co. Ltd. v. Satinder Kaur alia Satwinder Kaur and Others, 2020SCC OnLine SC 410.

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