# [2013] 16 S.C.R. 831

- **Citation:** [2013] 16 S.C.R. 831
- **Court:** Supreme Court of India
- **Decided:** 2013-12-09
- **Case number:** Civil Appeal No. 10918 ·of 2013
- **Bench:** G.S. Singhvi, Sudhansu Jyoti Mukhopadhaya
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/2013-16-s-c-r-831-29022
- **Pages:** 64

## Headnote

A
B
Motor Vehicles Act, 1988 - s.166 - Accidenr claim -
Award of compensation - Use of multiplier method - Selection C
of mu/tip-lier based on age group of the deceased/victim -
Split multiplier method - Applicability of - Held: The 1988 Act
does no(envisage application of split multiplier - In absence .
of any specific reason and evidence on record, Tribunal or
Court should not apply split multiplier in routine course and D
should apply multiplier as per decision of Supreme Court in
the case of Sar/a Verma as affirmed in the case of Reshma
Kumari.
Motor Vehicles Act, 1988- ss.163A and 166- Principles
E
relating to determination of liability and quantum of
cf;;bmpe(lsation different for claims made uls. 163A and claims ·
'ftlEJde u/s. 166 """ Structured formula as prf:tscribed under the
'Second Schedule in s. 163A and the multiplier mentioned
~-.
:'"'
'
:therein not binding for claims uls. 166.
Motor Vehicles Act, 1988 - s. 163A, Second Schedule -
Applicability and purpose of - Discussed.
F
Motor Vehicles Act, 1988 - s. 163A, Second Schedule -
Amendment in -Requirement of -
Held: The Second G
Schedule was enacted in 1994 - It ha$ now become
redundant, irrational aqd unwo.rkable, due to changed
scenario including the present cost of Jiving and cu"ent rate
of inflation and increased life expectancy - Specific direction
831
H
832
SUPREME COURT REPORTS
[2013] 16 S.C.R.
A to Central Government to make proper amendments to the •
Second Schedule table keeping .in view the present cost of
living, subject to amendment of Second Schedule as
proposed or may be made by the Parliament.
Motor Vehicles Act, 1988 - s. 171 - Accident claim -
8
Compensation - Award of interest - Duty bestowed upon.
Tribunal and Courts - Held: Under s.171, no rate of interest
has been fixed and duty is bestowed upon the Tribunal to fix
the rate of interest - Tribunals and Courts to decide the rate
of interest after taking into consideration the rate of interest
C allowed by the Supreme Court in similar case and other
factors such as inflation, change in economy, policy adopted
by the Reserve Bank of India from time to time and the period
since when the case is pending.
o
Motor Vehicle Act, 1988- s.168- Compensation - Grant
of - Difference between English law and Indian law - Held:
According to the English Law compensation/ damages are
payable according to the proportionate loss whereas in India
compensation is payable which appears to the Tribunal to be
E just is payable - English Fatal Accidents Act, 1846.
Motor Vehicles Act, 1988 - s.166 - Accident claim -
Compensation - Determination of - Deceased was 48 years
old and drawing gross salary of Rs. 13,3311- per month and
paying a sum of Rs.8891- per month towards tax- Decea$ed
F left behind four dependent family members -
Tribunal
awarded compensation of Rs. 9. 3 lakhs - High Court
enhanced the compensation to Rs.11.25 lakhs - On appeal,
held: Since deceased left behind four dependent family
members, deduction towards his personal and living expenses
G should be 114th - In appeal filed by the claimants, High Court
instead of deciding just compensation allowed meager
enhancement of compensation - High Court introduced the
concept of split multiplier and departed from the multiplier
system generally used in light of the de'cision in Sar/a Verma
H case without disclosing any reason - High Court also did not
. PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 833
ANR.
consider the question of prospect of future increase in salary A
'of the deceased though it noticed that the deceased would
have continued in pensionable services for more than 10
years - When age of the deceased was 48 years at the time
of death it wrongly applied multiplier of 10 and not 13 as per
decision in 'Sar/a Verma' - Thus, judgment of High Court
8
perverse and contrary to the evidence on record and fit to be
set aside for having not considered the future prospects of the
deceased and also for adopting split multiplier method
against the law laid dow

## Text

_Characters 0–39,968 of 108,845. This is a partial read: ask again with offset=39968 for what follows._

[2013) 16 S.C.R. 831
PUTTAMMA & ORS.
v. .
K. L. NARAYANA REDDY & ANR.
· (Civil Appeal No. 10918 ·of 2013)
DECEMBER 9, 2013
[G.S. SINGHVI AND SUDHANSU
JYOTI MUKHOPADHAYA, JJ.]
A
B
Motor Vehicles Act, 1988 - s.166 - Accidenr claim -
Award of compensation - Use of multiplier method - Selection C
of mu/tip-lier based on age group of the deceased/victim -
Split multiplier method - Applicability of - Held: The 1988 Act
does no(envisage application of split multiplier - In absence .
of any specific reason and evidence on record, Tribunal or
Court should not apply split multiplier in routine course and D
should apply multiplier as per decision of Supreme Court in
the case of Sar/a Verma as affirmed in the case of Reshma
Kumari.
Motor Vehicles Act, 1988- ss.163A and 166- Principles
E
relating to determination of liability and quantum of
cf;;bmpe(lsation different for claims made uls. 163A and claims ·
'ftlEJde u/s. 166 """ Structured formula as prf:tscribed under the
'Second Schedule in s. 163A and the multiplier mentioned
~-.
:'"'
'
:therein not binding for claims uls. 166.
Motor Vehicles Act, 1988 - s. 163A, Second Schedule -
Applicability and purpose of - Discussed.
F
Motor Vehicles Act, 1988 - s. 163A, Second Schedule -
Amendment in -Requirement of -
Held: The Second G
Schedule was enacted in 1994 - It ha$ now become
redundant, irrational aqd unwo.rkable, due to changed
scenario including the present cost of Jiving and cu"ent rate
of inflation and increased life expectancy - Specific direction
831
H
832
SUPREME COURT REPORTS
[2013] 16 S.C.R.
A to Central Government to make proper amendments to the •
Second Schedule table keeping .in view the present cost of
living, subject to amendment of Second Schedule as
proposed or may be made by the Parliament.
Motor Vehicles Act, 1988 - s. 171 - Accident claim -
8
Compensation - Award of interest - Duty bestowed upon.
Tribunal and Courts - Held: Under s.171, no rate of interest
has been fixed and duty is bestowed upon the Tribunal to fix
the rate of interest - Tribunals and Courts to decide the rate
of interest after taking into consideration the rate of interest
C allowed by the Supreme Court in similar case and other
factors such as inflation, change in economy, policy adopted
by the Reserve Bank of India from time to time and the period
since when the case is pending.
o
Motor Vehicle Act, 1988- s.168- Compensation - Grant
of - Difference between English law and Indian law - Held:
According to the English Law compensation/ damages are
payable according to the proportionate loss whereas in India
compensation is payable which appears to the Tribunal to be
E just is payable - English Fatal Accidents Act, 1846.
Motor Vehicles Act, 1988 - s.166 - Accident claim -
Compensation - Determination of - Deceased was 48 years
old and drawing gross salary of Rs. 13,3311- per month and
paying a sum of Rs.8891- per month towards tax- Decea$ed
F left behind four dependent family members -
Tribunal
awarded compensation of Rs. 9. 3 lakhs - High Court
enhanced the compensation to Rs.11.25 lakhs - On appeal,
held: Since deceased left behind four dependent family
members, deduction towards his personal and living expenses
G should be 114th - In appeal filed by the claimants, High Court
instead of deciding just compensation allowed meager
enhancement of compensation - High Court introduced the
concept of split multiplier and departed from the multiplier
system generally used in light of the de'cision in Sar/a Verma
H case without disclosing any reason - High Court also did not
. PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 833
ANR.
consider the question of prospect of future increase in salary A
'of the deceased though it noticed that the deceased would
have continued in pensionable services for more than 10
years - When age of the deceased was 48 years at the time
of death it wrongly applied multiplier of 10 and not 13 as per
decision in 'Sar/a Verma' - Thus, judgment of High Court
8
perverse and contrary to the evidence on record and fit to be
set aside for having not considered the future prospects of the
deceased and also for adopting split multiplier method
against the law laid down by Supreme Court - Claimants
entitled for total compensation of Rs.23,43 lakhs and also c
interest on the enhanced compensation at the rate of 12% p.a.
from the date of filing of the complaint petition. ·
'R' aged about 48 years, while returning -home on his
scooter, met with accident with a Tanker driven by its
driver in a rash and negligent manner. On account of the
D
said accident, 'R' fell down and sustained grievous
injuries all over the body, and later succumbed to the
injuries. His wife and children preferred the claim petition
under Section 166 of the Motor Vehicles Act, 1988,
claiming compensation of Rs.30,00,0001-. The Tribunal
E
held that the accident occurred on account of rash and
negligent driving by the driver of the Tanker. It took into
consideration the fact that the deceased was drawing a
salary of Rs.13,3311- p.m. After deduction of the Income
Tax, Professional Tax and personal expenses from the
F
basic salary it awarded a compensation of Rs.9,03,6001-.
On appeal by the claimants, the High Court enhanc~d the .
compensation to Rs.11,25,0001-. The High Court rounded
the age of the deceased as 50 years; applied Rs.8.,295/-
as multiplicand and deducted 1/3rd amount towards G
personal expenses. The High Court split the multiplier and
applied multiplier of 10 for the multiplicand of Rs.8,2951and multiplier of 2 for the multiplicand of Rs.4,147/-.
The grievances of the claimants are summarised as
follows:-
H
834
SUPREME COURT REPORTS
[2013] 16 S.C.R.
A
(i) Deduction of 1/3rd amount towards personal
expenses in all cases is arbitrary and unreasonable.
(ii) Multiplier under Second Schedule cannot be
applied. in for determination of compensation under
8 Section 166 of the Motor Vehicles Act, 1988.
(iii) Split multiplier cannot be made applicable in the
facts of the case.
(iv) Interest granted by the Tribunal and the High
C .Court was on the lower side which should be 9% in place
of 6% per annum.
At the time of argument, the appellants insisted to
issue a direction on the authority to comply with Section
0 158 (6) and 166 (4) of the Act, 1988. Further prayer was
made to direct the Central Government to amend the
Second Schedule of the Act, 1988 in light of the present
cost of living which increased manifold.
E
Allowing the appeal, the Court
HELD:1.1. Fatal Accident Act, 1855 was the first
Indian legislation that provided a right to claim
compensation for the death ·of a person caused by
wrongful act of another. It was enacted in accordance
F with English Fatal Accidents Act, 1846.
Indian Fatal Accidents Act, 1855 followed the
principles in English Fatal Accident Act, 1896 with regard
to payment of compensation. Thus, compensation/
G damages proportionate to the loss resulting from such
dea.th was payable. [Paras 11, 12] [847-G; 848-F-G]
H
1.2. Motor Vehicle Act was enacted in 1939. Later, by
Act No. 100 of 1956 with effect from 16th February, 1957
Motor Vehicle Act, 1939 was amended and claims
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 835
• ANR.
tribunals were constituted under Section 110. In 1988,
A
Motor Vehicle Act, 1939 was repealed and Motor Vehicle
Act, 1988 came into force. By bringing Section 168 of the
Motor Vehicle Act, 1988 it was reiterated that the amount
of compensation payable would be which appeared to be
just. [Paras 14, 15] (849-D, H; 850-A]
B
1.3. Thus
according to the· English
Law
compensation/dam.ages were payable according to the
proportionate loss whereas in India compensation is
payable which appears to the Tribunal to be just is C
payable. The approacl'I of the Courts according to the
English law and according to the Indian Law have to be
distinct and separate. Indian Law recognizes just
compensation
whereas
English
law
required
compensation proportionate to the loss suffered. English
0
courts have been calculating loss of money as a bargain
.
·, ..
as to how much m'onetary loss has been caused to the
claimant, as a result the death of bread earner/deceased.
The English Law being different, English judges were
having different approach towards the grant of
compensation to the deceased's family. [Para 16) [850~F- . E
H; 851-A]
2 .. Though the method of multiplier is one of the best
methods in providing compensation while choosing the
multiplier the court/~~i.bunal has to take into consideration
F
the rising inflation, increasing salaries and increasing
cost of living. Therefore, just compensation has to be.
determined keeping in view the Indian background, the
Indian culture, the Indian legal background, and the
socio-cultural circumstances existing in India. [Para 19]
G
[851-E-F]
3.1. Section 163A of the Motor Vehicles Act, 1988
contains special provisions as to payment of
compensation on:;$tructured formula basis. :rhe Second
H
836
SUP.REME COURT REPORTS
[2013] 16 S.C.R.
A Schedule referred to in Section 163A of the Act, 1988
prescribes structured formula for the purpose of grant of
compensation. By reasons thereof, a multiplier system
has been introduced in terms of which amount of
compensation is required to be calculated having regard
B to the age of victim and his annual income. In terms of
the note appended to the said Schedule, the amount of
compensation so arrived at in cases of fatal accident, is
to be reduced by 1/3rd in consideration of the expenses
which the victim would have incurred towards
c maintaining himself. The Second Schedule mandates that
the amount of compensation shall not b·e less than
Rs.50,000/-. It also prescribes for grant of compensation
under different heads such as general damage in case
of death, general case of injury and disability; disability
o in non-fatal accident and notional income for
compensation. for those who had no income at the time
of accident. The maximum amount which can be paid
under different heads has been specified therein. Section
166 of the Act, 1988 relates to application for
E compensation preferred before the Claims Tribunal.
[Paras 23, 24, 26) [854-H; 855-F-H; 856-A-B, DJ
3.2. In Sar/a Verma case, this Court compared
Section 163A with Section 166 of the Act, 1988 and
reiterated that the principles relating to determination of
F liability and quantum of compensation were different for
the claims under Section 163A and claims made under
Section 166. Thus it will be evident from the provisions
of the Act that the structured formula as prescribed under
Second Schedule and the multiplier mentioned therein is
G not binding for claims under Section 166 of the Act, 1988.
[Paras 28, 29) [860-C-E]
H
Deepa/ Girishbhai Son and others vs. United India
Insurance Co. Ltd., Baroda (2004) 5 SCC 385 and Sar/a
.,
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 837
ANR.
Verma (Smt.) and others vs. Delhi Transport Corporation and A
another 2009(6) SCC 121: 2009 ( 5) SCR 1098 - referred to. .
4. Multiplier: This Court in order to bring uniformity
and certainty in granting compensation always ~nvisaged
payr:nent of just compensation based on multiplier
B
method which is accepted method for determining and .
ensuring payment of just compensation. [Para 30) [860·
E-F]'
Jyotsana Dey and Ors. vs. State of Assam & Ors., 1987
ACJ 172; Hardeo Kaur & Ors. vs. Rajasthan State Transport C ·
Corporation & Anr. (1992) 2 SCC 567: 1992 (2) SCR 272;
Sar/a Verma (Smt.) and others vs. Delhi Transport
Corporation and another 2009(6) sec 121: 2009 (5) SCR
1098 and Resh ma Kumari & Ors. vs. Madan Mohan & Anr.
(2013) 9 SCC 65: 2013 (2) SCR 706 - referred to.
D
5. Split Multiplier: For determination of compensation
in motor accident claims under Section 166, this Court
always followed multiplier method. As there were
inconsistencies in selection of multiplier, this Court io
E
Sar/a Verma prepared a table for selection of multiplier
based on age group of the deceased/victim. Act, 1988
does not envisage application of split multiplier. In
absence of any specific reason and evidence on record
the Tribunal or th' Court should not apply split multiplier
F
in routine course and should apply multiplier as per
decision of this Court in the case of Sar/a Verma as
affirmed in the case of Reshma Kumari. [Paras 32, 34)
[865-E-F; 866-E)
K.R. Madhusudhan and others vs. Administrative Officer G
and another (2011) 4 sec 689: 2011 (2) SCR 1061; Sar/a
Verma (Smt.) and others vs. Delhi Transport Corporation and
another 2009(6) sec 121: 2009 (5) SCR 1098 and Resh ma.
Kumari & Ors. vs. Madan Mohan & Anr. (2013) 9 SCC 65:
H
2013 (2) SCR 706 - referred to.
838
SUPREME COURT REPORTS
[2013] 16 S.C.R.
A
6. Compliance of Section 158(6) and 166(4) of the Act,
1988: Information regarding any accident involving death
or bodily injury to any person is to be recorded or
reported under Section 158(6) of the Act, 1988. Sub
Section (4) of Section 166 of the Act,1988 substanUates
B the object of enacting the provisions of sub-section (6)
of Section 158. [Para 35] [866-F-G; 867-B]
General Insurance Council & Others v. State of Andhra
Pradesh & Others. (2007) 12 SCC 354: 2007 (8) SCR 192;
C Jai Prakash v. National Insurance Co. Ltd. & Ors (2010) 2
SCC 607: 2009 (16) SCR 710 - referred to.
7.1. Applicability of Second Schedule in the present
scEmario: By Act 54 of 1994, Section 163-A - Special
Provisions as to payment of compensation on structured
D formula basis has been inserted with effect from
14.11.1994. Section 163-A envisages that notwithstanding
any contained in the Act or in any other law or instrument
having the force of law, the owner of the motor vehicle
shall be liable to pay in the case of death or permanent
E disablement due to accident arising out the use of motor
vehicle, compensation as indicated in the second
schedule, to the legal heirs or the victim, as the case may
be. The purpose of Section 163-A and the Second
Schedule is to avoid long-drawn litigat!on and delay in
F payment of compensation to the victims or his heirs who
are in dire need of relief. Sub-section(2) of Section 163-A
envisages that the claimant shall not be required to plead
or establish that the death or permanent disablement in
respect of which the claim has been made was due to any
G wrongful act or neglect or default of the owner of the
vehicle or vehicles concerned or of any other person.
Sub-section (3) of Section 163-A envisages that the
Central Government may, keeping in view the cost of
living by notification in the Official Gazette, from time to
H tttne amend the second schedule. [Para 39] [872 B-G]
PUTIAMMA & ORS. v. K. L. NARAYANA REDDY & 839
ANR.
7 .2. Perusal of Second Schedule shows that the
A
legal' heirs of the· deceased person having an annual
income, minimum Rs.3,000/- and maximum Rs.40,000/-
could only derive benefit under. Section 163A of the Act,
1'9~8. Legal heirs of the deceased person whose income
is more than Rs.40,000/- per annum i.e. approximately
B
Rs.3,600/- per month cannot derive advantage of the
Second Schedule. The largest multiplier envisaged is 18
in the case of victim "above 25 years of age" but not
exceeding 30 years". The multiplier for the higher age is
required to be re-looked in view of increase in life c
expectancy. [Para 40) [876-A-C]
7 .3 .. A minimum amount of compensation of
Rs.50,000/- was fixed under Second Schedule in the year
1994. In addition, general damages in lieu of funeral
D
expenses, loss of consortium (if beneficiary is the
spouse), medical expenses, pain and suffering, grievous
injuries, non-grievous injuries, etc. are also provided for.
But no revision was made to these amounts in these 19
years. [Para 41] [876-C-D]
E
7.4. Keeping in view the cost of living, the Central
Government is required to amend the Second Schedule
[See Section 163A (3)]. The Second Schedule was
enacted by Act 54 of 1994 w.e.f. 14th November, 1994.
Now more than 19 years have passed but no amendment
F
has been m'ade. Cost of living has gone up many fold. The
Second Schedule as was enacted in 1994 has now
become redundant, irrational and unworkable, due to
changed scenario including the present cost of living and
current rate of inflation and increased life expectancy.
G
[Paras 52, 53) [887-C-E]
7 .5.The Central Government was bestowed with
duties to amend the Second Schedule in view of Section
163-A(3), but it failed to do so for 19 years in spite of H
840
SUPREME COURT REPORTS
[2013] 16 S.C.R.
A repeated observations of this Court. It is proper to issue
specific direction to the Central Government through the
Secretary, Ministry of Road Transport & Highways to
make the proper amendments to the Second Schedule
table keeping in view the present cost of living, subject
B to amendment of Second Schedule as proposed or may
be made by the Parliament. Accordingly, the Central
Government is directed to do so immediately. Till such
amendment is made by the Central Government in
exercise of power vested under sub-section (3) of
c Section 163A of Act, 1988 or amendment is made by the
Parliament, it is held and directed that for children upto
the age of 5 years shall be entitled for fixed compensation
of Rs.1,00,000/-(rupees one lakh) and persons more than
5 years of age sha.11 be entitled for fixed compensation of
0 Rs.1,50,000/-(rupees one lakh and fifty thousand) or the
amount may be determined in terms of Second Schedule
whichever is higher. Such amount is to be paid if any
application is filed under Section 163A of the Act, 1988.
[Para 56) [890-B-E]
E
UP. State Road Transport Corporation & Ors. v. Trilok
Chandra & Ors. (1996) 4 SCC 362: 1996 (2) Suppl. SCR
443; Oriental Insurance· Co. Ltd. v. Hansrajbhai V. Koda/a
(2001) 5 SCC 175: 2001 (2) SCR 999; Deepal Girishbhai
Son and others vs. United India Insurance Co. Ltd., Baroda
F (2004) 5 SCC 385 and Sar/a Verma (Smt.) and others vs.
Delhi Transport Corporation and another 2009(6) SCC 121:
2009 (5) SCR 1098 - referred to.
8. Grant of Interest: Section 171 of the Act, 1988 deals
G with the award of interest where any claim is allowed.
Under the said provision no rate of interest has been
fixed.and its duty is bestowed· upon the Tribunal to fix the
rate of interest. This question is kept open· for Tribunals
and Courts to decide the rate of interest after taking into
H consideration the rate of interest allowed by the Supreme
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY &
841
ANR.
Court in similar case and other factors such as inflation,
A
change.in economy, policy adopted by the Reserve Bank
.of India from time to time and the period since when the
case is pending. [Paras 57, 62] (890-F, H; 892-E-F]
. · Kaushnuma Begum v. New India( Assurance Co. Ltd. & B
Ors. (2001) 2 SCC 9: 2001 f{) SCR 8; Abati Bezbaruah v.
Deputy Director General, Geological, Survey of India & Anr .
. (2003) 3 SCC 148: 2003 (1) SCR 1229; and Supe Dei v.
National Insurance Co. Ltd.& Anr. (2009) 4 SCC 513 -
referred to.
9.1. In the present case, the deceased was .drawing
gross'salary of Rs. 13,3311- per month and he was paying
c.
a sum of Rs.789/- per month towards income tax and an
amount of Rs.1001- per month towards professional tax.
Thus he was paying total amount of Rs.8891- per month
D
towards tax and if that amount is deducted from. the
gross income of the deceased it comes to Rs.12,442/- per
month. The deceased was 48 years old at the time of
death. He would have continued in service for another 12
years and he would have been entitled for pension. · E
Therefore, if increase in the future income is taken at 50%
it will come to Rs.18,663/- (Rs.12,442/- +Rs. 6221). As per
decision in 'Sar/a Verma' the deduction towards personal
and living expenses of the deceased should be one-third
(1/3rd) where the number of dependent family members
F
is 2 to 3; one-fourth· (1 /4th) where the number of
dependent family members is 4 to 6 and one-fifth (1/5th)
where the number of dependent family members exceeds
6. In the present case, there are four dependent family .
members. Therefore, the deduction towards personal and
G
living expenses of the deceased should be 1/4th. If 1/4th
amount is deducted from the income of the deceased it
will come to Rs.13,998/- (Rs. 12,442/- + Rs. 6,221 - Rs.
4665). At the time of accident, the, deceased was 48 years
old, hence on the basis of decision in 'Sar/a Verma'
H
842
.SUPREME COURT REPORTS
[2013] 16 S.C.R.
A multiplier of 13 will be applicable. In that case the
claimants should be entitled to get the following benefits:
B
c
D
E
(i) Amount of compensation with 12 months salary
and 13 as multiplier (13,998/- x 12 x13) Rs.
21,83,688/-
(ii) Compensation to the famJly members (children
and family members other than wife) for loss of
love and affection, deprivation of protection,
social security etc.
Rs. 1,00,000/-
(iii) Compensation to the widow of the deceased for
loss of love and affection, pains and sufferings,
loss of -consortium, deprivation of protection,
social security etc.
Rs. 50,000/-
(iv) Cost incurred on account of funeral and ritual
expenses
Rs. 10,000/-
Total Compensation
Rs.23,43,688/- [Para 63)
[892-G-H; 893-A-H]
9.2. In the appeal filed by the claimants before the
High Court, the High Court instead of deciding the just
compensation allowed meager enhancement of
compensation. In doing so, the High Court introduced the
F concept of split multiplier and departed from the
multiplier system generally used in light of the decision
in Sar/a Verma case without disclosing any reason. The
High Court also did not consider the question of prospect
of future increase in salary of the deceased though it
G noticed that the deceased would have continued in
pensionable services for more than 10 years. When the
age of the deceased was 48 years at the time of death it
wrongly applied multiplier of 10 and not 13 as per
decision in 'Sar/a Verma'. Thus, the judgment of the High
H Court is perverse and contrary to the evidence on record
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY &
843
ANR.
and is fit to be set aside for having not considered the
A
future prospects of the deceased and also for adopting
split multiplier method against the law laid down by this
Court. The impugned judgment, is accordingly, set aside
and it is held that the claimants are entitled for total
compensation of Rs.23,43,688/-. They shall also get B
interest on the enhanced c::ompensation at the rate of
12% per annum from the date of filing of the complaint
petition. Respondent No.2-lnsurance Company is
directed to pay enhanced/additional compensation and
interest to the claimants within a period of three months. c
[Para 64] [894-A-F]
Case Law Reference :
(2004) 5 sec 385
2009 (5) SCR 1098
1987 ACJ 172
1992 (2) SCR 272
2013 (2) SCR 706
2011 (2) SCR 106
2007 (8) SCR 192
2009 (16) SCR 710
referred to
referred to
referred to
referred to
referred to
referred to
referred to
referred to
1996 (2) Suppl. SCR 443
referred to
2001 (2) SCR 999
2001 (1) SCR 8
2003 (1) SCR 1229
(2009) 4 sec 513
referred to
referred to
referred to
referred to
Para 27
Para 28
Para 30
Para 30
Para 31
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CIVIL APPELLATE JURISDICTION : Civil Appeal No.
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From the Judgment and Order dated 19.03.2009 of the
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High Court of Karnataka at Bangalore in MFA No. 2344 of 2004
P. P. Malhotra, ASG, Yasir Rauf, Rajan Mukherjee, Kiran
Suri, Nakibur Rahman Barbhuiya, Vishnu Mehra, Sakshi Gupta
Manjeet Chawla for the appearing parties.
The Judgment of the Court was delivered by
SUDHANSU JYOTI MUKHOPADHAYA, J. 1. Delay
condoned. Leave granted.
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2. This appeal has been preferred by the appellantsclaimants in motor accident case against the judgment and
order dated 19th March, 2009 passed by the Division Bench
of the High Court of Karnataka, Bangalore in a motor accident
cas'e being Miscellaneous First Appeal No. 2344 of 2004(MV).
D They are not happy with the meager enhancement of
compensation granted by the High Court.
3. The brief facts of the case are as follows:-
That Ramadas, aged about 48 years, was working as a
E Typesetting Assistant in Computer Section of the Mysore
Printers Limited (Deccan Herald}. On 27th July, 1999 at about
1.30 a.m. while he was returning home on his scooter bearing
Registration No.KA 03/K 7514 on Hosur-Luskar road, near
Mica Software, he met with accident with a Tanker bearing
F Registration No.KA 05/A 5995 driven by its driver in a rash and
negligent manner. On account of the said accident, Ramadas
fell down and sustained grievous injuries all over the body. He
was shifted to Victoria Hospital, where he succumbed to the
injuries.
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4. His wife and children preferred the claim petition under
Section 166 of the Motor Vehicles Act, 1988 (hereinafter
referred to as the 'Act, 1988), claiming compensation of
Rs.30,00,000/-. The 2nd respondent (Insurance Company)
contested the claim. They had not disputed the accident or the
H insurance coverage. On behalf of the claimant, witnesses were
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 845
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
examined including P .W-1, who was the claimant No.1 and
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another one Chandrashekar, an eye-witness to the accident.
Nine documents were led as evidence marked as Exhs.P1 to
P9. No oral evidence was adduced by the respondents. The
Insurance Policy was marked as Exh.R1.
5. The Tribunal on appreciation of the oral and
documentary evidence on record held that the accident was
occurred on account of rash and negligent driving by the driver
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of the Tanker. It took into consideration the fact that the
deceased was drawing a salary of Rs.13,331/- p.m. After
deduction of the Income Tax, Professional Tax and personal
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'expenses from the basic salary it awarded a compensation of
Rs.9,03,600/-.
6. On appeal preferred by the claimants, the High Court
enhanced the compensation to Rs.11,25,000/-. The High Court
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rounded the age of the deceased as 50 years; applied
Rs.8,295/- as multiplicand and deducted 1/3rd amount toward~
personal expenses. The High Court split the multiplier and
applied multiplier of 10 for the multiplicand of Rs.8,295/- and
multiplier of 2 for the multiplicand of Rs.4, 147/-.
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7. The grievances of the claimants are summarised as
follows:-
(i) Deduction of 1 /3rd amount towards personal
expenses in all cases is arbitrary and unreasonable.
(ii) Multiplier under Second Schedule cannot be
applied in for determination of compensation under
Section 166 of the Motor Vehicles Act, 1988.
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(iii) Split multiplier cannot be made applicable in
the facts of the case.
(iv) Interest granted by the Tribunal and the High
Court is lower side which should be 9% in place of
6% per annum.
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At the time of argument learned counsel for the appellants
insisted to issue a direction on the authority to comply with
Section 158 (6) and 166 (4) of the Act, 1988. Further prayer
was made to direct the Central Government to amend the
Second Schedule of the Act, 1988 in light of the present cost
B of living which increased manifold.
8. Per contra, according to the counsel for respondent
No.2-0riental Insurance Co. Ltd. (hereinafter referred to as, "the
Insurance Company") the compensation paid in favour of the
C claimants is just and proper, multiplier method is sound method
of assessing compensation; Section 163(A) directs to follow
a structured formula indicated in Second Schedule to avoid long
drawn litigation and delay in payment of compensation; there
is consistency and uniformity in the said approach.
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9. Before we refer to the broad features of the Act, 1988,
it is desirable to notice the background in which the Parliament
considered it necessary to bring in the provisions of the Motor
Vehicles Act.
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(i) Before Indian Fatal Accident Act, 1855 came into
force in India, there was no provision in Indian Laws to maintain
a claim for damages/compensation by the legal representative
of the deceased for his death caused by tort/civil wrong or even
by crime. The right to claim compensation died with the death
F of a person.
(ii) Prior to the enforcement of Indian Fatal Accident Act,
1855 in England there was a statute, namely, Fatal Accident
Act, 1846 certain provisions of which read as under:
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(a) 'Whereas no action at law is now maintainable a
person who by his wrongful act, neglect or default may
have caused the death of another person, and it is oftentimes right and expedient that the wrongdoer in such cases
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PUTTAMMA & ORS. v. K. L. NARAYANA REDDY &
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should be answerable in damages for the injury so caused
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by him.' Be it therefore enacted by the Queen's most
Excellent Majesty, by and with the Advice and Consent of
the Lords Spiritual and Temporal, and Commons;in this
present Parliament assembled, and by the Authority of the
same, that whensoever the death of a person shall be
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caused by a wrongful act, neglect and default is such as
would (if death had not ensued) have entitled the party
injured to maintain an action and recover damages in
respect thereof, then and in every such case the person
who would have been liable if death had not ensued shall c
be liable to an action for damages, notwithstanding the
death shall have been caused under such circumstances
as amount in law to a Felony.
(b) And be it enacted, that every such action shall be for
the benefit of the wife, husband, parent and child of the
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person whose death shall have been so caused, and shall
be brought by and in the name of the executor or
administrator of the person deceased; and in every such
action the Jury may give such Damages as they may
think proportioned to the Injury for such death to the
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parties respectively for whom and for whose benefit
such action shall be brought: and the amount so
recovered, after deducting the costs not recovered from
the defendant.. ....
10. lnEngland, there have been several amendments and
enactments after the Fatal Accidents Act, 1846.
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11. Fatal Accident Act, 1855 was the first Indian legislation
that provided a right to claim compensation for the death ofa G
,person caused by wrongful act of another. It was enacted in
accordance with English Fatal Accidents Act, 1846. Section 1A
of the Indian Fatal Accident.Act, 1855 reads as under:
"[1A] Suit for compensation to the family of a person
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for loss occasioned to it by his death by actionable
wrong? Whenever the death of a person shall be caused
by wrongful act, neglect, or default, and the act, neglect or
default is such as would (if death had not ensued have
entitled the party injured to maintain an action and recover
damages in respect thereof, the party who would have
been liable if death had not ensued, shall be liable to an
action or suit for damages, notwithstanding the death of
person injured, and although the death shall have been
caused under such circumstances as amount in ·law to
felony or other crime.
[3][***] Every such action or suit shall be for the benefit of
the wife, husband, parent and cl'lild, if any, of the person
whose death shall have been so caused, and shall be
brought by and in the name of the executor, administrator
or representative of the person deceased;
and in every such action, t.he court may give such
damages as it may think proportioned to the loss
resulting from such death to the parties respectively,
for whom and for whose benefit such action shall be
brought, and the amount so recovered, after deducting all
costs and expenses, including the costs not recovered from
the defendant, shall be divided amongst the before
mentioned parties, or any of them, in such shares as the
court by its judgment or decree shall direct."
12. Indian Fatal Accidents Act, 1855 followed the principles
in English Fatal Accident Act, 1896 with regard to payment of
compensation. Thus, compensation/damages proportionate to
G the loss resulting from such death was payable.
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13. Under Section 306 of the Indian Succession Act 1925
all rights for claiming damages after the death of a person
survive and legal representative could claim damages. Section
306 of the Indian Succession Act, 1925 reads as under:
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 849
ANR. [SUDHANSU JYOTI MUKHOPADHAYA, J.]
"306. Demands and rights of action of or against A
deceased survive to and against executor or
administrator - All demands whatsoever all rights to
prosecute or defend any action or special proceedings
existing in favour of or against a person at the time of his
· decease, survive to and against his executors or
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administrators; except causes of action for defamation,
assault, as defined in the Indian Penal Code, 1960 (45 of
1860) or other personal injuries not causing the death of
the party; ani except also cases where, after the death of
the party, the relief sought could not be enjoyed or granting c
it would be nugatory." .
14. Motor Vehicle Act was enacted in 1939. Later, by Act
No. 100 of 19§6 with effect from 16th February, 1957 Motor
Vehicle Act, 1939 was amended and claims· tribunals were
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constituted under Section 110. Section 110 to Section 11 OF
of the Motor Vehicles Act, 1939 were brought. Section 1108
of the Motor Vehicle Act, 1939 as amended reads as under:-
"1108. Award of the Claims Tribunal - On receipt of an
application for compensation made under Section 110-A,
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the Claims Tribunal shall, after giving the parties an
· opportunity of being heard, [hold an inquiry into the claim
or, as the case may be, each of the claims and, subject to
the provisions of Section 109-B, may make an award]
determining the amount of compensation which
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appears to it to be just and specifying the person or
persons to whom compensation shall be paid; and
in making the award the Claims Tribunal shall specify the
amount which shall be paid by the insurer [or owner or
driver of the vehicle involved in the accident or by all or any
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of them, as the case may be}."
/ 15. In 1988, Motor Vehicle Act, 1939 was repealed' and
Motor Vehicle Ad, 1988 came into force. By bringing Section
168 of the Motor Vehicle Act, 1988 it was reiterated that the
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[2013] 16 S.C.R.
A amount of compensation payable would be which appeared
to be just; Section 168 of the amended Motor Vehicle Act
reads as under:
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"168. Award of the Claims Tribunal - (1) On receipt of
an application for compensation made under Section 166,
the Claims Tribunal shall, after giving notice of the
application to the insurer and after giving the parties
(including the insurer) an opportunity of being heard, hold
an inquiry into the claims or, as the case may be, each of
the claims and, subject to the provisions of Section 162
may ·make an award determining the amount of
compensation which appears to it to be just and
specifying the person or persons to whom compensation
shall be paid and in making the award the Claims Tribunal
shall specify the amount which shall be paid by the insurer
or owner or driver of the vehicle involved in the accident
or by all or any of them, as the case may be:
Provided that where such application makes a claim for
compensation under Section 140 in respect of the death
or permanent disablement of any person, such claim and
any other claim (whether made in such application or
otherwise) for compensation in respect of such death or
permanent disablement shall be disposed of in
accordance with .the provisions of Chap'ter X ..... "
16. Thus according to the English Law compensation/
damages were payable according to the proportionate toss
whereas in India compensation is payable which appears to
the Tribunal to be just is payable. The approach of the Courts
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have to be distinct and separate. Indian Law recognizes just
compensation whereas English law required compensation
proportionate to the loss suffered. English courts have been
calculating loss of money as a bargain as to how much monetary
H loss has been caused to the claimant, as a result the death of
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY &
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bread earner/deceased. The English Law being different,
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English judges were having different approach towards the
grant of compensation to the deceased's family.
17. Here in India, we have a different culture. Here, every
parent thinks that it is his moral and legal duty to give fullest
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education to his children. Parents think that marriage of their
children is their responsibility and even providing a house to
their children and grand children is their responsibility. Here,
in India, the concept of culture and family life is totally distinct
from the culture and family life in England and in other foreign
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countries. Here, parents not only educate the children but spend
huge amounts or at least sufficient amounts on the marriages
of their children, on their education, for their housing needs and
in majority of cases in return they are looked after in old ages.
18. Most of the people work even after their i:etirement to
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support their children. The longevity of life in India has increase
at least upto 69 years; in many cases, peoples live longer than
that. The salaries and cost of things increase rapidly. At a
glance, between every 9-10 years they double.
19. Though the method of multiplier is one of the best
methods in providing compensation while· choosing the
multiplier the court/tribunal has to take into consideration the
rising inflation, increasing salaries and increasing cost of living.
Therefore, we have to determine just compensation keeping
in view the Indian background, the Indian culture, the Indian legal
background, and the socio-cultural circumstances existing in
India.
Relevant statutory provisions of Act, 1988
. 20. "Liability without fault" in certain cases is provided
under Chapter X. Section 140 prescribes liability upon the
owner of the vehicle on the principle of no.fault and reads as
follows:
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"140. Liability to pay compensation in certain cases
on the principle of no fault.- (1) Where death or
permanent disablement of any person has resulted from
an accident arising out of the use of a motor vehicle or
motor vehicles, the owner of the vehicle shall, or, as the
case may be, the owners of the vehicles shall, jointly and
severally, be liable to pay compensation in respect of such
death or disabiement in accordance with the provisions of
this section.
(2) The amount of compensation which shall be payable
under sub-section (1) in respect of the death of any person
shall be a fixed sum of 1[fifty thousand rupees] and the
amount of compensation payable under that sub-section
in respect of the permanent disablement of any person .
shall be a fixed sum of _f[twenty-five thousand rupees].
(3) In any claim for compensation under sub-section (1),
the claimant shall not be required to plead and establish
that the death or permanent disablement in respect of
which the claim has been made was due to any wrongful
act, neglect or default of the owner or owners of the vehicle
or vehicles concerned or of any other person.
(4) A claim for compensation under sub-section (1) shall
not be defeated by reason of any wrongful act, neglect or
default qf the person in respect of whose death or
permanent disablement the claim has been made nor shall
the quantum ·of compensation recoverable in respect of
such death or permanent disablement be reduced on the
basis of tile share of such person in the responsibility for
such death or permanent disablement.
[(5) No~ithstanding anything contained in sub-section (2)
regarding death or bodily injury to any person, for which
the owner of the vehicle is liable to give compensation for
r.elief, he is also liable to pay compensation under any other
· 1aw for the time being in force:
PUTTAMMA & ORS. v. K. L. NARAYANA REDDY & 853
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