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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.2705 OF 2020
(arising out of SLP (Civil) No. 28548 of 2014)
United India Insurance Co. Ltd. …Appellant versus Satinder Kaur @ Satwinder Kaur & Ors. …Respondents WITH CIVIL APPEAL NO.2706 OF 2020 (arising out of SLP (Civil) No. 12520 of 2015)
Satinder Kaur @ Satwinder Kaur & Ors. …Appellants versus United India Insurance Co. Ltd. …Respondent
J U D G M E N T INDU MALHOTRA, J. Leave granted.
- The deceased – Satpal Singh was residing in Doha, Qatar since 1984. The Employment Contract Form of the deceased dated 21.08.1984 revealed that he was engaged as a labourer initially for a period of one year on a salary of 750 Qatari Riyal p.m., and continued to live in Qatar where he was employed, till he passed away in a motor vehicle accident in India in 1998.
- Satpal Singh was visiting India in November, 1998. On 18.11.1998, he was riding a scooter, with his wife as the pillion rider, when he met with an accident with a Maruti car bearing No. CH-01-M-6284 coming from the opposite direction. FIR No. 204 dated 18.11.1998 was lodged u/S. 304A, 279, 337, 427 IPC at P.S. Sadar, Rajpura against the driver and owner of the offending car. The FIR was lodged on the statement of Satinder Kaur – widow of the deceased, wherein she had stated that the accident had occurred due to the rash and negligent driving of the driver of the Maruti car. It was further stated that the accident took place while her husband was over-taking a tractor-trolley, when the Maruti car was coming at a high
3.2. The Claimants filed a photocopy of the Employment Contract Form dated 10.07.1984 certified by the Indian Embassy at Doha, which records the engagement of the deceased as a labourer by the firm Ali Al Fayyad Trading Contracting Est., Doha on a salary of 750 Qatari Riyal p.m., when he first shifted to Qatar. 3.3. The Claimants also placed on record a letter dated 27.06.1997 purported to have been issued by his employer – the High Speed Group to the Counsellor, New Zealand Consulate for issuance of a visa. It was stated that the General Manager of their company, Mr. Satpal Harbans Singh was intending to spend his annual vacation during June – August 1997 in New Zealand, and had been employed by this organization since 1984, and was now drawing a salary of $ 6, p.m. It is relevant to note that this letter was not attested by the Indian Embassy at Doha. 3.4. The Claimants placed on record the Passport of the deceased, which reveals his date of birth as
10.08.1958. The deceased was a little over 40 years of age at the time of the accident. The passport entries reveal frequent foreign travel during the period 1986 till 1998 when he expired.
- The MACT vide Award dated 30.03.2001 held that a perusal of the first statement made by Claimant No. 1 – widow of the deceased in the FIR, revealed that her husband was over- taking a tractor–trolley when the accident occurred, because the Maruti car was coming at a high speed from the opposite side. Consequently, the MACT held that it was a case of contributory negligence on the part of the deceased Satpal Singh, as also on the part of the driver of the Maruti car. 4.1. The MACT applied the multiplier of 13, since the deceased was a little over 40 years of age at the time of his death. 4.2. With respect to the income of the deceased, the MACT held that the letter dated 27.06.1997 issued by the High Speed Group, had not been proved by the Claimants, nor was it attested by the Indian Embassy at Doha, and therefore refused to take it into consideration.
5.1. The High Court vide the impugned Judgment and Order dated 10.03.2014 upheld the findings of the MACT regarding contributory negligence. 5.2. With respect to the income of the deceased, the High Court proceeded on the basis of the letter dated 27.06.1997 issued by the High Speed Group, , wherein it was stated that Satpal Singh was working as a General Manager, and drawing a salary of $ 6,700 p.m. which would be equivalent to Rs. 2,68,000 p.m. at the time when the claim was filed. 5.3. The High Court assessed the compensation on the basis of the income at Rs. 2,68,000 p.m. and adopted the multiplier of 12. The contribution to the family was fixed at 50% of his income, which would approximately be Rs. 1,34,000 p.m. Rs. 50,000 was awarded towards loss of estate, and Rs. 10,000 towards funeral expenses. On this basis, the total compensation payable to the Claimants was computed at Rs. 96,78,000 after
making a partial abatement of 50% towards contributory negligence. The High Court held that since 50% of the income was provided to the wife and children, it was not necessary to provide for loss of consortium, and loss of love and affection. 5.4. The High Court held the Insurance Company to be liable to pay the compensation, which would be distributed equally between the widow and children of the deceased. The enhanced amount of compensation would carry Interest @7.5% p.a. from the date of filing the claim, till realization.
- The Appellant – Insurance Company filed SLP (Civil) No. 28548/2014 to challenge the impugned Judgment. The Claimants also filed an SLP bearing SLP (Civil) No. 12520/2015 claiming further enhancement of compensation.
- We have perused the pleadings and the documentary evidence placed on record before the Courts below, and have considered the oral submissions made by the Counsel for the parties.
In order to provide uniformity and consistency in awarding compensation, the following steps are required to be followed :– “ The income of the deceased per annum should be determined. Step 1 (Ascertaining the multiplicand) Out of the said income a deduction should be made in regard tothe amount which the deceased would have spent on himself by way of personal and living expenses. The balance, which isconsidered to be the contribution to the dependant family, constitutes the multiplicand. Step 2 (Ascertaining the multiplier) Having regard to the age of the deceased and period of active career, the appropriate multiplier should be selected. This doesnot mean ascertaining the number of years he would have lived orimponderables worked but infor lifethe andaccident. economic Having factors, regard a totable several of multipliers with reference to the age has been identified by thisCourt. The multiplier should be chosen from the said table with reference to the age of the deceased. Step 3 (Actual calculation) The annual contribution to the family (multiplicand) when multiplied by such multiplier gives the 'loss of dependency' tothe family. Thereafter, a conventional amount in the range of Rs. 5,000/- to Rs. 10,000/- may be added as loss of estate.Where the deceased is survived by his widow, another conventional amount in the range of 5,000/- to 10,000/- shouldbe added under the head of loss of consortium. But no amount is to be awarded under the head of pain, suffering or hardshipcaused to the legal heirs of the deceased. The funeralincurred) and cost of any medical treatment of the deceased expenses, cost of transportation of the body (if before death (if incurred) should also added. (emphasis supplied) ”
(a) Deduction for personal and living expenses The personal and living expenses of the deceased should be deducted from the income, to arrive at the contribution to the family. In Sarla Verma (supra) (paras 30, 31 and 32), this
Court took the view that it was necessary to standardize the deductions to be made under the head personal and living expenses of the deceased. Accordingly, it was held that : where the deceased was married, the deduction towards personal and living expenses should be 1/3rd if the number of dependant family members is two to three; 1/4th^ if the number of dependant family members is four to six; and 1/5th^ if the number of dependant family members exceeds six. If the deceased was a bachelor, and the claim was filed by the parents, the deduction would normally be 50% as personal and living expenses of the bachelor. Subject to evidence to the contrary, the father was likely to have his own income, and would not be considered to be a dependant. Hence, the mother alone will be considered to be a dependant. In the absence of any evidence to the contrary, brothers and sisters of the deceased bachelor would
followed, unless a case for departure is made out. The Court held : “deduction for personal and living expenses. One must bear in41. The above does provide guidance for the appropriate mind that the or spends exclusively for the maintenance of others does not proportion of a man’s net earnings that he saves form part of his living expenses but what he spends exclusivelyon himself does. The percentage of deduction on account of personal and living expenses may vary with reference to thenumber of dependant members in the family and the personal living expenses of the deceased need not exactly correspond tothe number of dependants.
42. In our view, the standards fixed by this Court in SarlaVerma 2009 (6) SCC 121 on the aspect of deduction for personal living expenses in paragraphs 30, 31 and 32 mustordinarily be followed unless a case for departure in the circumstances noted in the preceding para is made out.” 43.conclusions as follows: In what we have discussed above, we sum up our … 43.6. Insofar as deduction for personal and living expenses is concerned,follow the standards prescribed in paragraphs 30, 31 and 32 of it is directed that the Tribunals shall ordinarily the judgment in Sarla Verma 2009 (6) SCC 121 subject to theobservations made by us in para 38 above. …” (emphasis supplied)
A Constitution Bench of this Court in National Insurance Co. Ltd. v. Pranay Sethi & Ors. ,^3 held that the standards fixed in Sarla Verma (supra) would provide guidance for appropriate deduction towards personal and living expenses, and affirmed the conclusion in para 43.6 of Reshma Kumari (supra).
(^3) (2017) 16 SCC 680.
(b) Determination of Multiplier With respect to the multiplier, the Court in Sarla Verma (supra) , prepared a chart for fixing the applicable multiplier in accordance with the age of the deceased, after considering the judgments in General Manager, Kerala S.R.T.C., Trivandrum v. Susamma Thomas & Ors. ,^4 U.P.S.R.T.C. & Ors. v. Trilok Chandra & Ors. ,^5 and New India Assurance Co. Ltd. v. Charlie & Ors.^6 The relevant extract from the said chart i.e. Column 4 has been set out hereinbelow for ready reference :– Age of the deceased Multiplier (Column 4) Upto 15 years 15 to 20 years - 18 21 to 25 years 18 26 to 30 years 17 31 to 35 years 16 36 to 40 years 15 41 to 45 years 14 46 to 50 years 13 51 to 55 years 11 56 to 60 years 9 61 to 65 years 7 Above 65 years 5 The Court in Sarla Verma (supra) held :– “as mentioned in column (4) of the Table above (prepared by42. We therefore hold that the multiplier to be used should be applying Susamma Thomas, Trilok Chandra and Charlie), (^45) (1994) 2 SCC 176.(1996) 4 SCC 362. (^6) (2005) 10 SCC 720.
the deceased. This was subsequently affirmed in Reshma Kumari (supra) , and followed in a line of decisions. A three-judge bench in Munna Lal Jain & Ors. v. Vipin Kumar Sharma & Ors. ,^7 held that the issue had been decided in Reshma Kumari (supra) , wherein this Court held that the multiplier must be with reference to the age of the deceased. The decision in Munna Lal Jain (supra) was followed by another three-judge bench of this Court in Sube Singh & Ors. v. Shyam Singh (dead) & Ors.^8 The Constitution Bench in National Insurance Company Limited v. Pranay Sethi & Ors. ,^9 affirmed the view taken in Sarla Verma (supra) and Reshma Kumari (supra) , and held that the age of the deceased should be the basis for applying the multiplier. Another three-judge bench in Royal Sundaram Alliance Insurance Co. Ltd. v. Mandala Yadagari Goud & Ors. ,^10 traced out the law on this issue, and held that the compensation is to be computed based on what the deceased would have contributed to support the dependants. In the case of the death of a married person, it is an accepted norm that the (^78) (2015) 6 SCC 347.(2018) 3 SCC 18. (^910) (2017) 16 SCC 680. (^) (2019) 5 SCC 554.
age of the deceased would be taken into account. Thus, even in the case of a bachelor, the same principle must be applied. The aforesaid legal position has recently been re-affirmed by this Court in Sunita Tokas and Ors. v. New India Insurance Co. Ltd. and Ors.^11
(d) Future Prospects In the wake of increased inflation, rising consumer prices, and general standards of living, future prospects have to be taken into consideration, not only with respect to the status or educational qualifications of the deceased, but also other relevant factors such as higher salaries and perks which are being offered by private companies these days. The dearness allowance and perks from which the family would have derived monthly benefit, are required to be taken into consideration for determining the loss of dependency. In Sarla Verma (supra) , this Court held : “24.nearly 100%, in Sarla Dixit, the income was increased only by In Susamma Thomas, this Court increased the income by 50% and in Abati Bezbaruah the income was increased by amere 7%. In view of imponderables and uncertainties, we are in favour of adopting as a rule of thumb, an addition of 50% ofactual salary to the actual salary income of the deceased towardspermanent job and was below 40 years. [Where the annual future prospects, where the deceased had a income is in the taxable range, the words ‘actual salary’ should (^11) 2019 (11) SCALE 24.
increments and pay revision or for some other change in serviceconditions, there is always a competing attitude in the private sector to enhance the salary to get better efficiency from theemployees. Similarly, a person who is self-employed is bound to garner his resources and raise his charges/fees so that he canlive with same facilities. To have the perception that he is likely to remain static and his income to remain stagnant is contraryto the fundamental concept of human attitude which always intends to live with dynamism and move and change with thetime. Though it may seem appropriate that there cannot be certainty in addition of future prospects to the existing incomeunlike in the case of a person having a permanent job, yet the said perception does not really deserveinclined to think that there can be some degree of difference as acceptance. We are regards the percentage that is meant for or applied to in respectof the legal representatives who claim on behalf of the deceased who had a permanent job than a person who is self-employedor on a fixed salary. But not to apply the principle of standardization on the foundation of perceived lack of certaintywould tantamount to remaining oblivious to the marrows of ground reality. And, therefore, degree-test is imperative. Unlessthe degree-test is applied and left to the parties to adduce evidence to establish, it would be unfair and inequitable. Thedegree-test has to have the inbuilt concept of percentage. Takingpassage of time, the changing society, escalation of price, the into consideration the cumulative factors, namely, change in price index, the human attitude to follow a particularpattern of life, etc., an addition of 40% of the established income of the deceased towards future prospects and wherethe deceased was below 40 years an addition of 25% where the deceased was between the age of 40 to 50 years would bereasonable.
59.remains whether there should be no addition where the age of The controversy does not end here. The question still the deceased is more than 50 years. Sarla Verma thinks itappropriate not to add any amount and the same has been approved in Reshma Kumari. Judicial notice can be taken of thefact that salary does not remain the same. When a person is in a permanent job, there is always an enhancement due to onereason or the other. To lay down as a thumb Rule that there willconcept. We are disposed to think, there should be an addition be no addition after 50 years will be an unacceptable of 15% if the deceased is between the age of 50 to 60 years andthere should be no addition thereafter. Similarly, in case of self- employed or person on fixed salary, the addition should be 10%between the age of 50 to 60 years. The aforesaid yardstick has been fixed so that there can be consistency in the approach bythe tribunals and the courts.
59. In view of the aforesaid analysis, we proceed to record ourconclusions: … 59.3. While determining the income, an addition of 50% of actual salary to the income of the deceased towardsfuture 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 wasbetween the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary lesstax. 59.4. fixed (^) Insalary, case thean additiondeceased ofwas 40% self-employed of the established or on a income should be the warrant where the deceased wasbelow 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 yearscomputation. The established income means the income should be regarded as the necessary method of minus the tax component. …” (emphasis supplied)
(e) Three Conventional Heads In Pranay Sethi (supra) , the Constitution Bench held that in death cases, compensation would be awarded only under three conventional heads viz. loss of estate, loss of consortium and funeral expenses. The Court held that the conventional and traditional heads, cannot be determined on percentage basis, because that would not be an acceptable criterion. Unlike determination of income, the said heads have to be quantified, which has to be based on a reasonable foundation. It was observed that factors such as price index,
