# SHASHIKALA & ORS v. GANGALAKSHMAMMA & ANR

- **Citation:** [2015] 5 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 2015-03-13
- **Case number:** Civil Appeal No. 2836 of 2015
- **Bench:** V. Gopala Gowda, R. Banumathi
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/shashikala-ors-v-gangalakshmamma-anr-30742
- **Pages:** 28

## Headnote

Motor Vehicles Act, 1988 - s. 168 - Fatal accident -
Deceased was self employed 45 years old man -
Compensation - Computation of- Courts below computed
A
B
c
the compensation without making addition towards the future
prospects- On appeal for enhancement of the compensation o
by plea for addition towards future prospects - Held: Per
Banumathi, J: Compensation awarded to the claimants
enhanced, without adverting to the issue whether additions
are to be made towards future prospects or not- Per Gopa/a
Gowda, J: While enhanced compensation is agreed to, the E
issue of addition towards future prospects a/so needs to be
considered - The matter to be referred to larger Bench to
determine the issue.
Judicial Discipline - Reference of case to larger F
Bench by Division Bench of Supreme Court - For deciding
the issue in respect of which conflicting views were given by
two Three-Judge Benches - Held: Per Gopa/a Gowda, J.
Two-judge Bench cannot refer the matter directly to larger
Bench of five Judges- The correct course would be to place G
the matter before a Bench of co-ordinate strength i.e. threejudge Bench.
Referring the matter, on limited issue to larger Bench,
H
1
2
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A theCourt
HELD: Per R. BANUMATHI, J.: 1. Section 168 of
the Motor Vehicles Act enjoins the courts/tribunals to
make award determining the amount of compensation
B which appears to be just and reasonable. The wide
amplitude of such power does not empower the tribunal
to determine the compensation arbitrarily, although the
Act is a beneficial legislation, it can neither be allowed
as a source of profit nor as a windfall to the persons
C affected. Determination of compensation has to be fair
and reasonable and acceptable by the legal standards.
[Para 15] (14-D-F]
2. Without adverting to the issue whether
D additions are to be made towards future prospects or
not, as it is obligatory on the part of the Court to award
just compensation, considering the age of the deceased
and the nature of business the deceased was doing, his
income as stated in the income tax return for the year
E 2006-07 i.e. Rs. 2,02,911/- may be taken as the income of
the deceased. Ten per cent of the said amount i.e.
Rs.20,290/- is to be deducted towards income tax and
the remaining comes to Rs.1,82,620/-. The amountto be
F deducted for professional tax is Rs.2,400/- and after
deducting the same, the balance comes out to Rs.
1,80,220/-. The income from the house property for the
year 2006-07 is shown to be Rs.20,000/- and after
deducting the same, the net amount comes to
G Rs.1,60,220/-. Deducting 1/41h (one/fourth) towards
personal expenses which comes out to Rs.40,055/-, the
loss of dependency/loss of contribution is arrived at
Rs.1,20, 165/- per annum. The High Court has rightly taken
the age of the deceased as 45 years and adopted
H
SHASHIKALAAND ORS. v. GANGALAKSHMAMMA
3
multiplier 14. Total loss of dependency is calculated at A
Rs.16,82,3101-(Rs.1,20,1651-x 14). (Paras 16and17] (15B-E, G]
3. Substantial compensation is to be awarded
towards conventional damages like loss of consortium, B
loss of love and affection and funeral expenses.
Rs.1,00,000/- is awarded towards loss of consortium and
Rs.1,00,000/- towards loss of love and affection to the
minor children and Rs.25,0001-towards funeral expenses
and Rs.25,0001- towards loss of estate totalling to C
Rs.2,50,0001-. Thus, the compensation awarded to the
claimants is enhanced to Rs.19,32,310/-. [Para 18] [16-CE]
Reshma Kumari & Ors. vs. Madan Mohan &Anr. (2013)
9 SCC 65: 2013 (2) SCR 706; Sar/a Verma & Ors. vs.
Delhi Transport Corporation & Anr. (2009) 6 SCC
121: 2009 (5) SCR 1098; Santosh Devi vs. National
Insurance Company Ltd. & Ors. (2012) 6 SCC 421:
2012 (3) SCR 1178; Nagappa vs. Gurudayal Singh
& Ors. (2003) 2 SCC 274: 2002 (4) Suppl. SCR 499;
Oriental Insurance Company Ltd. vs. Mohd. Nasir And
Anr. (2009) 6 SCC 280: 2009 (8) SCR 829; Ningamma
and Anr. vs. United India Insurance Company Ltd
(2009) 13 S

## Text

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[2015] 5 S.C.R. 1
SHASHIKALA & ORS.
v.
GANGALAKSHMAMMA & ANR.
(Civil Appeal No. 2836 of 2015)
MARCH 13, 2015
[V. GOPALA GOWDA AND R. BANUMATHI, JJ.]
Motor Vehicles Act, 1988 - s. 168 - Fatal accident -
Deceased was self employed 45 years old man -
Compensation - Computation of- Courts below computed
A
B
c
the compensation without making addition towards the future
prospects- On appeal for enhancement of the compensation o
by plea for addition towards future prospects - Held: Per
Banumathi, J: Compensation awarded to the claimants
enhanced, without adverting to the issue whether additions
are to be made towards future prospects or not- Per Gopa/a
Gowda, J: While enhanced compensation is agreed to, the E
issue of addition towards future prospects a/so needs to be
considered - The matter to be referred to larger Bench to
determine the issue.
Judicial Discipline - Reference of case to larger F
Bench by Division Bench of Supreme Court - For deciding
the issue in respect of which conflicting views were given by
two Three-Judge Benches - Held: Per Gopa/a Gowda, J.
Two-judge Bench cannot refer the matter directly to larger
Bench of five Judges- The correct course would be to place G
the matter before a Bench of co-ordinate strength i.e. threejudge Bench.
Referring the matter, on limited issue to larger Bench,
H
1
2
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A theCourt
HELD: Per R. BANUMATHI, J.: 1. Section 168 of
the Motor Vehicles Act enjoins the courts/tribunals to
make award determining the amount of compensation
B which appears to be just and reasonable. The wide
amplitude of such power does not empower the tribunal
to determine the compensation arbitrarily, although the
Act is a beneficial legislation, it can neither be allowed
as a source of profit nor as a windfall to the persons
C affected. Determination of compensation has to be fair
and reasonable and acceptable by the legal standards.
[Para 15] (14-D-F]
2. Without adverting to the issue whether
D additions are to be made towards future prospects or
not, as it is obligatory on the part of the Court to award
just compensation, considering the age of the deceased
and the nature of business the deceased was doing, his
income as stated in the income tax return for the year
E 2006-07 i.e. Rs. 2,02,911/- may be taken as the income of
the deceased. Ten per cent of the said amount i.e.
Rs.20,290/- is to be deducted towards income tax and
the remaining comes to Rs.1,82,620/-. The amountto be
F deducted for professional tax is Rs.2,400/- and after
deducting the same, the balance comes out to Rs.
1,80,220/-. The income from the house property for the
year 2006-07 is shown to be Rs.20,000/- and after
deducting the same, the net amount comes to
G Rs.1,60,220/-. Deducting 1/41h (one/fourth) towards
personal expenses which comes out to Rs.40,055/-, the
loss of dependency/loss of contribution is arrived at
Rs.1,20, 165/- per annum. The High Court has rightly taken
the age of the deceased as 45 years and adopted
H
SHASHIKALAAND ORS. v. GANGALAKSHMAMMA
3
multiplier 14. Total loss of dependency is calculated at A
Rs.16,82,3101-(Rs.1,20,1651-x 14). (Paras 16and17] (15B-E, G]
3. Substantial compensation is to be awarded
towards conventional damages like loss of consortium, B
loss of love and affection and funeral expenses.
Rs.1,00,000/- is awarded towards loss of consortium and
Rs.1,00,000/- towards loss of love and affection to the
minor children and Rs.25,0001-towards funeral expenses
and Rs.25,0001- towards loss of estate totalling to C
Rs.2,50,0001-. Thus, the compensation awarded to the
claimants is enhanced to Rs.19,32,310/-. [Para 18] [16-CE]
Reshma Kumari & Ors. vs. Madan Mohan &Anr. (2013)
9 SCC 65: 2013 (2) SCR 706; Sar/a Verma & Ors. vs.
Delhi Transport Corporation & Anr. (2009) 6 SCC
121: 2009 (5) SCR 1098; Santosh Devi vs. National
Insurance Company Ltd. & Ors. (2012) 6 SCC 421:
2012 (3) SCR 1178; Nagappa vs. Gurudayal Singh
& Ors. (2003) 2 SCC 274: 2002 (4) Suppl. SCR 499;
Oriental Insurance Company Ltd. vs. Mohd. Nasir And
Anr. (2009) 6 SCC 280: 2009 (8) SCR 829; Ningamma
and Anr. vs. United India Insurance Company Ltd
(2009) 13 SCC 710: 2009 (8) SCR 683; Rajesh And
Ors. vs. Rajbir Singh & Ors. (2013) 9 SCC 54: 2013
(5) SCR 961; Jiju Kuruvila & Ors. vs. Kunjujamma
Mohan & Ors (2013) 9 SCC 166: 2013 (7) SCR 276relied on.·
D
E
F
G
Per V. GO PALA GOWDA, J.: (Partly dissenting)
HELD: 1.1 The question of making addition to the
income of the deceased towards the future prospects in H
4
SUPREME COURT REPORTS
(2015] 5 S.C.R.
A the case of salaried persons vis-a-vis where the deceased
was self employed or on fixed wages, also needs to be
considered. [Para 1] (17-C-D]
1.2 *Rajesh and**Santosh Devi cases give shape
B to the view that future prospects are to be taken into
account even in case of self employment and also that
there cannot be a set formula for determining such
compensation. (Para 8] (25-G]
C
Sanjay Verma v. Haryana Roadways (2014) 3 SCC
210: 2014 (1) SCR 924 - relied on.
1.3 However, the matter in relation to future
prospects to be added to the annual income to determine
o the compensation towards loss of dependency cannot
be finally decided by this Court and has to be ultimately
referred to a larger Bench. Therefore, the matter has to
be plac~d before the Hon'ble Chief Justice of India for
appropriate orders towards the constitution of a suitable
E larger Bench in accordance with law. [Para 10] [27-G-H;
28-A]
F
G
H
Reshma Kumari & Ors. v. Madan Mohan &Anr. (2013)
9 SCC 65: 2013 (2) SCR 706; *Rajesh & Ors. v. Rajbir
Singh & Ors. (2013) 9 sec 54: 2013 (5) SCR 961;
General Manager, Kera/a State Road Transport
Corporation, Trivandrum & Ors. v. Susamma Thomas
& Ors. (1994) 2 SCC 176; Sar/a Dixit & Anr. v. Ba/want
Yadav & Ors. (1996) 3 SCC 179: 1996 (3) SCR 30;
Abati Bezbaruah v. Dy. Director General, Geological
Survey of India & Anr. (2003) 3SCC 148: 2003 (1)
SCR 1229; Sar/a Verma & Ors. v. Delhi Transport
Corporation & Anr. (2009) 6 SCC 121; ** Santosh Devi
v. National Insurance Co. Ltd. & Ors. (2012) 6 SCC 421:
SHASHIKALAAND ORS. v. GANGALAKSHMAMMA
5
2012 (3) SCR 1178 - referred to.
A
2. Reference made to a larger Bench in National
Insurance Company case in view of the seeming conflict
between the legal principles with respect to future
prospects laid down by this Court in the cases of B
Reshma Kumari case and Rajesh case was not right. The
reference even in the case of a perceived conflict or
disagreement with the views of a two judge {or even a
three judge) Bench does not permit a lower Bench
formation to refer the matter straightway to a five Judge C
Bench. A two judge Bench as was the formation in the
case of National Insurance Company Ltd. V. Pushpa
{judgment passed by Supreme Court dated 2.7.2014)
could not have referred the matter to a larger Bench. The 0
correct view would have been to place the matter before
a Bench of co-ordinate strength which decided
***Reshma Kumari and *Rajesh cases i.e. three judges.
[Paras 7 .and 9] [23-A-B, E-F; 27-F-G]
Bharat Petroleum Corporation Ltd. v. Mumbai Shramik
Sangha & Ors. (2001) 4 SCC 448: 2001 (3) SCR 208;
Pradip Chandra Parija & Ors. v. Pramod Chandra
Patnaik & Ors. (2002) 1 SCC 1 : 2001 (5) Suppl.
SCR 460; Central Board of Dawoodi Bohra Community
& Anr. v. State of Maharashtra & Anr. (2005) 2 SCC
673:2004 (6) Suppl. SCR 1054- relied on.
***Reshma Kumari & Ors. v. Madan Mohan & Anr.
(2013) 9 SCC 65: 2013 (2) SCR 706; *Rajesh & Ors.
v. Rajbir Singh & Ors. (2013) 9 SCC 54: 2013 (5)
SCR 961 - referred to.
BY THE COURT
E
F
G
H
6
SUPREME COURT REPORTS
[2015) 5 S.C.R.
A Since there is disagreement only insofar as the addition
towards the future prospects in case of self-employed
or fixed wages to be added to the compensation towards
the dependency, the matter may be placed before the
Hon'ble the Chief Justice of India for appropriate orders
B towards the constitution of a suitable larger Bench to
decide the said issue. Pendente lite the said issue, the
enhanced compensation of Rs. 4,62,938/- along with
interest at the rate of 9% p.a. from the date of the claim
C petition till the date of realisation shall be paid within four
weeks from the date of present judgment by way of a
demand draft or be deposited before the Motor Accident
Claims Tribunal to enable the appellants herein to
withdraw the same. [Paras 1 and 2] [28-D-F]
D
Case Law Reference
In the judgment of BANUMATHI, J.:
2013 (5) SCR 961
Relied on.
Para 6
E
2013 (2) SCR 706
Relied on.
Para 7
2009 (5) SCR 1098
Relied on.
Para 9
2012 (3) SCR 1178
Relied on.
Para 11
F
2002 (4) Suppl. SCR 499 Relied on.
Para 15
2009 (8) SCR 829
Relied on.
Para 15
G 2009 (8) SCR 683
Relied on.
Para 15
2013 (5) SCR 961
Relied on.
Para 18
2013 (7) SCR 276
Relied on.
Para 18
H
In the judgment of GOPALA GOWDA, J.:
SHASHIKALAAND ORS. v. GANGALAKSHMAMMA
7
2013 (2) SCR 706
Referred to.
Para 1
A
2013 (5) SCR 961
Referred to.
Para 1
(1994) 2 sec 176
Referred to.
Para 2
1996 (3) SCR 30
Referred to.
Para 2
B
2003 (1) SCR 1229
Referred to.
Para 2
(2009) 6 sec 121
Referred to.
Para 2
2012 (3) SCR 1178
Referred to.
Para 5
c
2001 (3) SCR 208
Relied on.
Para 7
2001 (5)Suppl.SCR 460
Relied on.
Para 7
D
2004(6)Suppl.SCR 1054 Relied on.
Para 7
CIVILAPPELLATE JURISDICTION : Civil Appeal No.
2836 of2015
From the Judgment and Order dated 15.07.2013 of
E
the High Court of Karnataka at Bangalore in MFA No. 136/
2009 (MV)
Pankaj Bala Verma, Dr.Vipin Gupta, for the Appellants.
F
Garvesh Kabra, for the Respondents.
The Judgments and Order of the Court were delivered by
R. BANUMATHI, J.
1. Leave granted.
G
2. This appeal arises out of judgment in M.F.A. No.136/
2009 (MV) dated 15.7.2013 passed by the High Court of
Karnataka, in and by which, the High Court modified the award
passed by the Motor Accident Claims Tribunal, Bangalore H
8
SUPREME COURT REPORTS
[2015]5S.C.R.
A (for short 'the tribunal') by enhancing the compensation to
Rs.14,69,372/-from Rs.7,85,000/- awarded by the tribunal.
3. Appellant No.1 is the wife, appellants No.2 to 4 are
children and appellants No.5 to 6 are the parents of the
B deceased Late Shri H.S. Ravi. The appellants have filed a
claim petition under the Motor Vehicles Act on account of death
of deceased Sri H.S. Ravi who had met with an accident on
14.12.2006. On the fateful day, the deceased Ravi was
proceeding in a motor cycle as a pillion rider.
The rider of
C the motor cycle applied sudden brake due to which both rider
and pillion rider fell down and both sustained grievous injuries.
The rider of the motor cycle died on the spot. Ravi who was a
pillion rider sustained grievous injuries and was immediately
rushed to the hospital. However, after six days i.e. on
D 20.12.2006, deceased-Ravi succumbed to the injuries.
Deceased-Ravi was aged 45 years and he was engaged in
a transport business of supplying newspapers from the Head
Office destination to other places. The deceased was paying
E income-tax and was an income-tax assessee. Stating that
the deceased was the only earning member of the family and
that they have lost the support of the bread winner of the family,
the claimants filed a claim petition claiming compensation of
Rs.33,90,000/-.
F
4. The tribunal has taken the income of the deceasedRavi at Rs.75,000/- per annum and deducting 1/31d towards
the personal expenses of the deceased, the tribunal calculated
the loss of dependency at Rs.50,000/- per annum. Taking
G the age of the deceased as 46 years, the tribunal adopted
multiplier 13 and awarded compensation of Rs.6,50,000/-
(Rs.50,000/- x 13) towards loss of dependency. In addition
to this, the tribunal awarded conventional damages of
Rs. 35,000/-(Rs.10,000/- towards loss of consortium,
H
SHASHIKALAAND ORS. v. GANGALAKSHMAMMA
9
[R. BANUMATHI, J.]
Rs.10,000/- towards loss of love and affection, Rs.10,000/-
A
towards loss of estate and Rs.5,000/- towards funeral
expenses) and Rs.1,00,000/- towards medical expenses as
against the claim of Rs.1,82, 150/-. Thus, the tribunal has
awarded total compensation of Rs.7,85,000/-.
5. Aggrieved by the said award of the tribunal, the
appellants filed appeal before the High Court seeking
enhancement of compensation. The High Court modified the
award by recalculating the income of the deceased. Taking
B
the income tax returns of the deceased for the assessment C
years 2005-06 and 2006-07, the High Court calculated
average of the same and taken the income at Rs. 1,55,812/-
per annum. After making deductions towards income-tax,
professional tax and Income from house property, the High
· Court calculated the net income of deceased at Rs.1, 17 ,831/ D
-per annum. The High Court deducted 1/4th towards personal
expenses and to the remaining amount of Rs.88,373/- applied
multiplier of 14 and accordingly re-determined the loss of
dependency at Rs.12,37,222/- as against Rs.6,50,000/-
E
awarded by the tribunal. Awarding conventional damages at
Rs. 45,000/- and medical expenses at Rs.1,87, 150/-, the High
Court enhanced the compensation to Rs.14,69,372/-. Still
aggrieved by the quantum of compensation, appellants have
filed this appeal.
F
6. Learned counsel for the appellants-claimants
contended that the compensation awarded by the High Court
was neither just nor reasonable. It was submitted that the High
Court erred in calculating the average of the income from the G
income of the assessment years 2005-06 and 2006-07. It
was further submitted that as per the decision in the case of
Rajesh and Ors. vs. Rajbir Singh & Ors1., the High Court
1. (2013) g sec 54
H
10
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A ought to have made an addition of 30% of the net income of
the deceased in computation of future prospects as in the
instant case deceased-Ravi was being in the age group of
40-50 years. It was also submitted that the courts below ought
to have awarded Rs.1,00,000/- towards loss of consortium and
B substantial amount of compensation to the children-appellants
No. 2 to 4 towards loss of love and affection.
7. Learned counsel for the respondent-insurance
company submitted that in Reshma Kumari & Ors. vs. Madan
C Mohan & Anr. 2., this Court has held that where the deceased
was self-employed, it would be appropriate not to make any
addition to income for future prospects and the High Court
rightly declined to make addition towards future prospects. It
0 was submitted that the deceased was engaged in the business
and was not earning fixed income and has filed returns for
different years showing different income viz., gross income of
Rs.1,08, 713/- for the assessment year 2005-06 and
Rs.2,02,911/- for the assessment year 200?-07 which only
E indicates the disparity in income of the deceased. To strike a
balance, High Court has rightly taken the average and rightly
deducted 10% towards income tax and other deductions. It
was submitted that the compensation awarded by the High
Court is just and reasonable and no grounds have been made
F out by the claimants for enhancement of the compensation
whatsoever.
8. I have carefully considered the rival contentions and
perused the impugned judgment as also the award and the
G materials on record.
H
9. The deceased was doing transport business of
supplying newspapers from the Head Office to the other
destinations as per the agreement entered into betw~en the
2. (2013) e sec as
SHASHIKALAAND ORS. v. GANGALAKSHMAMMA
11
[R. BANUMATHI, J.]
group of newspapers and himself. It is also not in dispute that A
the deceased was an income tax assessee and he has filed
income tax returns for the assessment years 2005-06 and
2006-07. The claimants had filed income tax returns of the
deceased for the assessment years 2005-06 and 2006-07
with gross total income of Rs.1,08,713/- and Rs.2,02,911/-
B
respectively including the income from the house property.
Total income of both the years comes to Rs.3, 11,624/- and the
High Court has taken the average of it which comes to
Rs.1,55,812/-. High Court deducted 10% of the said amount C
towards income-tax and taken the balance amount to
Rs.1,40,231/-. The High Court had further deducted Rs.2,400/
-towards professional tax and income from the house property
shown as Rs.20,000/- and the net income was calculated at
Rs.1, 17,831/-. Since the claimants are six in numbers as per o
the decision in Sar/a Verma & Ors. vs. Delhi Transport
Corporation & AnfJ., one-fourth(1/41h) deduction was made
towards personal expenses. The loss of dependency was thus
calculated at Rs.88,373/-. Taking the age of deceased at45
years, the High Court adopted multiplier 14 and calculated E
the total loss of dependency at Rs.12,37,222/-.
10. The deceased was aged 45 years and was doing
transport business. Though the claimants have filed income
tax returns for two assessment years 2005-06 and 2006-07,
F
as per the income tax returns for the year 2006-07, the income
of the assessee was Rs.2,02,911/-. Tribunal did not take the
income of the deceased for the assessment year 2006-07 on
the ground that only xerox copy was filed and the claimants
have failed to examine income-tax authorities to prove the G
same. Instead of taking the income of the deceased as per
the assessment year 2006-07, the High Court has chosen to
calculate the average of the income for two assessment years
3. (2009) 6 SC C 121
H
12
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A 2005-06 and 2006-07. Considering the age of the deceased
and the nature of business he was doing, in my considered
view, the High Court was not justified in so taking the average
of income of the two assessment years. The deceased was
aged 45 years an9 doing business. Admittedly, he was also
B owning agricultural lands. Even though agricultural income
was not shown in the income tax return, it emerges from the
evidence that the deceased was also doing agricultural work.
11. On behalf of the claimants, reliance was placed
C upon Rajesh's case (supra) to contend that even in the case
of self-employed persons or persons with fixed wages, there
must be an addition to the income of the deceased towards
future prospects. In Sar/a Verma's case (supra), this Court
0
held that in case of salaried persons additions have to be
made depending upon the age of the deceased to the actual
income of the deceased while computing future prospects. In
Santosh Devi vs. National Insurance Company Ltd. & Ors4.,
Sar/a Verma w_a_s explained and it was held that the benefit
E of making addition to total income of persons who are selfemployed or getting fixed wages was permissible.
12. The principles laid down in Santosh Devi's case
(supra) were reiterated in Rajesh and Ors. vs. Rajbir Singh
F & Ors. (supra), wherein this Court held that the case of selfemployed persons or persons with fixed wages, the actual
income of the deceased must be enhanced for purpose of
computation viz.(i) by 50% where his age was below 40 years;
(ii) by 30% where he belonged to age group of 40 to 50 years,
G and (iii) by 15% where he was between age group of 50 to
60 years. However, it was observed that no such addition/
enhancement was permissible where deceased exceeded the
age of 60 years. Further, in Rajesh (supra), this Court while
reiterating the meaning of "just compensation" with reference
H 4. (2012) 6 sec 421
SHASHIKALAAND ORS. v. GANGALAKSHMAMMA
13
[R. BANUMATHI, J.]
to settled principles observed that, at the time of fixing such A
compensation, the court should not succumb to the niceties or
technicalities to grant just compensation in favour of the
claimant. It is the duty of the court to equate, as far as possible,
the misery on account of the accident with the compensation
so that the injured or the dependants should not face the B
vagaries of life on account of discontinuance of the income
earned by the victim, and the court's duty is to award just,
equitable, fair and reasonable compensation, irrespective of
claim made.
13. Considering the question of making addition to the
income of the deceased towards the future prospects in cases
c
of salaried persons vis-a-vis in cases where the deceased
was self-employed or on a fixed wage/salary, in Reshma 0
Kumari and Ors. vs. Madan Mohan and Anr6., this Court held
as under:-
"39. The standardization of addition to income for future
prospects shall help in achieving certainty in arriving at
appropriate compensation. We approve the method that
an addition of 50% of actual salary be made to the actual
salary income of the deceased towards future prospects
where the deceased had a permanent job and was below
40 years and the addition should be only 30% if the age
of the deceased was 40 to 50 years and no addition
should be made where the age of the deceased is more
than 50 years. Where th.e annual income is in the taxable
range, the actual salary shall mean actual salary less tax.
In the cases where the deceased was self-employed or
was on a fixed salary without provision for annual
increments, the actual income at the time of death without
any addition to income for future prospects will be
appropriate. A departure from the above principle can
5. (2013) 9 sec 65
E
F
G
H
14
SUPREME COURT REPORTS
[2015] 5 S.C.R.
A
only be justified in extraordinary circumstances and very
exceptional cases."
14. The decision in Reshma Kumari's case was
rendered at earlier point of time (2.04.2013) and Rajesh's case
B was pronounced subsequently (12.04.2013). Pointing out the
divergent opinion expressed in the above cases and
expressing the view that regarding the manner of addition of
income for future prospects in case of self-employed or on
fixed wages there should be an authoritative pronouncement,
C in National Insurance Company vs. Pushpa {S.L.P (C)
No.16735/2014}, the matter has been referred to a larger
Bench by the order dated 2.07.2014, in which one of us (Hon'ble
Mr. Justice V. Gopala Gowda) was a member, which is pending
consideration.
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15. Section 168 of the Motor Vehicles Act enjoins the
courts/tribunals to make award determining the amount of
compensation which appears to be just and reasonable. The
wide amplitude of such power does not empower the tribunal
E to determine the compensation arbitrarily, although the Act is
a beneficial legislation, it can neither be allowed as a source
of profit nor as a windfall to the persons affected.
Determination of compensation has to be fair and reasonable
F and acceptable by the legal standards. In Nagappa vs.
G
Gurudayal Singh & Ors6., this Court held as under:-
"10. Thereafter, Section 168 empowers the Claims
Tribunal to "make an award determining the amount of
compensation which appears to it to be just". Therefore,
the only requirement for determining the compensation
is that it must be "just". There is no other limitation or
restriction on its power for awarding just compensation''.
a. c2003) 2 sec 274
H
7. c2oos) a sec 2ao
SHASHIKALAAND ORS. v. GANGALAKSHMAMMA
15
[R. BANUMATHI, J.]
The same principle was reiterated in the decisions of A
Oriental Insurance Company Ltd. vs. Mohd. Nasir and Anr.,
and Ningamma and Anr. vs. United India Insurance
Company LtcJB.
16. Without adverting to the issue whether additions B
are to be made towards future prospects or not, as it is
obligatory on the part of the Court to award just compensation,
considering the age of the deceased and the nature of business
he was doing, in my view, the income of the deceased as
stated in the income tax return for the year 2006-07 i.e. Rs. C
2,02,911/- may be taken as the income of the deceased. Ten
per cent of the said amount i.e. Rs.20,290/- is to be deducted
towards income tax and the remaining comes to Rs.1,82,620/
-. The amount to be deducted for professional tax is Rs.2,400/ 0
-and after deducting the same, the balance comes out to Rs.
1,80,220/-. The income from the house property for the year
2006-07 is shown to be Rs.20,000/- and after deducting the
same, the net amount comes to Rs.1,60,220/-. Deducting 1 /
41h (one/fourth) towards personal expenses which comes out E
to Rs.40,055/-, the loss of dependency/loss of contribution is
arrived at Rs.1,20, 165/- per annum.
'
17. Insofar as appropriate multiplier, the date of birth
of the deceased as per driving licence was 16.6.1961. On F
the date of accident i.e. 14.12.2006, the deceased was aged
45 years, 5 months and 28 days and the tribunal has taken
the age as 46 years.
Since the deceased has completed
only 45 years, the High Court has rightly taken the age of the
deceased as 45 years and adopted multiplier 14 which is the G
appropriate multiplier and the same is maintained. Total loss
of dependency is calculated at Rs.16,82,310/- (Rs.1,20, 165/-
x 14).
18. With respect to the award of compensation towards H
a. (2009) 13 sec 11 o
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[2015] 5 S.C.R.
A conventional
heads, the tribunal has
awarded only
Rs.10,000/- towards loss of consortium and Rs.10,000/-
towards love and affection, Rs.10 ,0001-towards loss of estate
and Rs.5,000/- towards funeral charges. The High Court totally
awarded Rs.45,000/- towards conventional heads such as
8 loss of estate, loss of love and affection, loss of consortium,
transportation of dead body and funeral expenses. In various
decisions, this Court has held that substantial compensation
is to be awarded towards conventional damages like loss of
C consortium, loss of love and affection and funeral expenses.
In Rajesh And Ors. vs. Rajbir Singh & Ors., (supra) and Jiju
Kuruvila & Ors. vs. Kunjujamma Mohan & Ors9., this Court
has awarded substantial amount of Rs.1,00,000/- towards loss
of consortium and Rs.1,00,000/- towards loss of love and
o affection and Rs.25,000/- towards funeral expenses. Following ,
the same, Rs.1,00,000/-is awarded towards loss of consortium
and Rs.1,00,000/- towards loss of love and affection to the
minor children and Rs.25,000i-towards funeral expenses and
Rs.25,000/- towards loss of estate totalling to Rs.2,50,000/-.
E Thus, the compensation awarded to the claimants is enhanced
to Rs.19,32,310/-.
19. In the result, the compensation awarded to the
claimants is enhanced and the compensation is awarded at
F Rs.19,32,310/-. The enhanced compensation of Rs.4,62,938/
- is payable with interest at the rate of 9% per annum from the
date of the claim petition till the date of realisation. Out of
enhanced compensation of Rs.4,62,938/-, Rs.3, 12,938/-
alongwith accrued interest shall be paid to the first appellantG wife of the deceased, balance Rs.1,50,000/-alongwith accrued
interest shall be apportioned amongst the claimants 2 to 4. If
the appellants 2 to 4 are still minors claimants, their share of
the enhanced compensation shall be invested in a nationalized
H bank on the same terms as directed by the High Court. In
9. (2013) g sec 166
SHASHIKALAAND ORS. v. GANGALAKSHMAMMA
17
case, the appellants No. 2 to 4 have already attained majority, A
they are permitted to withdraw their entire share of apportioned
compensation.
20. The impugned judgment of the High Court is
modified and the appeal is allowed. In the facts and B
circumstances of the case, no order as to costs.
V. GOPALA GOWDA, J. 1. I have perused the
judgment written by my learned Sister Mrs.Justice R.
Banumathi in the above-mentioned matter. I am in respectful c
agreement with all the points which are answered in favour of
the appellants-claimants, except for the non-consideration on
the question of making addition to the income of the deceased
towards the future prospects in the case of salaried persons
vis-a-vis where the deceased was self employed or on fixed D
wages after adverting to the judgments of this Court in
Reshma Kumari & Ors. v. Madan Mohan & Anr. 1, Rajesh
& Ors. v. Rajbir Singh & Ors.2, the relevant paragraphs of
which are extracted hereinafter.
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2. After considering the legal principles laid down by
this Court in the case of ( 1) General Manager, Kera/a State
Road Transport Corporation, Trivandrum & Ors. v.
Susamma Thomas & Ors. 3; (2) Sar/a Dixit & Anr. v. Ba/want
Yadav & Ors.4 and (3) Abati Bezbaruah v. Dy. Director F
General, Geological Survey oflndia & Anr.5, this Court, on
the question of future prospects in the case of Sar/a Verma &
Ors. v. Delhi Transport Corporation & Anr.6 has held as
follows:-
1 (2013) 9 sec 65
2 (2013) 9 sec 54
3 (1994) 2 sec 176
4 (1996) 3 sec 179
5 (2003) 3SCC 148
6 (2009J 6 sec 121
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"-24. In Susamma Thomas, this Court increased the
income by nearly 100%, in Sar/a Dixitthe income was
increased only by 50% and in Abati Bezbaruah the
income was increased by a mere 7%. In view of the
imponderables and uncertainties, we are in favour of
adopting as a rule of thumb, an addition of 50% of actual
salary to the actual salary income of the deceased
towards future prospects, where the deceased had a
permanent job and was below 40 years. (Where the
annual income is in the taxable range, the words "actual
salary" should be read as "actual salary less tax"). The
addition should be only 30% if the age of the deceased
was 40 to 50 years. There should be no addition, where
the age of the deceased is more than 50 years. Though
the evidence may indicate a different percentage of
increase, it is necessary to standardise the addition to
avoid different yardsticks being applied or different
methods of calculation being adopted. Where the
deceased was self-employed or was on a fixed salary
(without provision for annual increments, etc.), the courts
will usually take only the actual income at the time of
death. A departure therefrom should be made only in rare
and exceptional cases involving special circumstances."
3. Interestingly, in Reshma Kumari & Ors. (supra),
which was ultimately decided in 2.4.2013 by a three judge
Bench, which arose out of the matter referred by the order of
two judge Bench dated 23.7.2009. That order had referred
two questions:-
"(1) Whether multiplier specified in the Second Schedule
appended to the Motor Vehicles Act, 1988 (for short "the
1988 Act") should be scrupulously applied in all cases?
And
SHASHIKALAAND ORS. v. GANGALAKSHMAMMA
19
[V. GOPALAGOWDA, J.]
(2) Whether for determination of the multiplicand, the
A
1988 Act provides for any criterion, particularly as
regards determination of future prospect."
4. The referring Bench (in Reshma Kumari & Ors.-
supra) had in fact, envisioned a situation where future B
prospects in private employment too, were to be taken into
consideration (although in a slightly different context). The
relevant paragraph of the referring Bench of this Court in the
case of Reshma Kumari & Ors. is extracted hereunder:-
"46. In the Indian context several other factors should be
taken into consideration including education of the
dependants and the nature of job. In the wake of changed
societal conditions and global scenario, future prospects
may have to be taken into consideration not only having
regard to the st~tus of the employee, his educational
qualification; his past performance but also other relevant
factors, namely, the higher salaries and perks which are
being offered by the private companies these days ... "
Ultimately, the question of future prospects was decided
in the Larger Bench judgment of this Court in Reshma
Kumari's case. The relevant paragraph is extracted
hereunder:
"39. The standardisation of addition to income for future
prospects shall help in achieving certainty in arriving at
appropriate compensation. We approve the method that
an addition of 50% of actual salary be made to the actual
salary income of the deceased towards future prospects
where the deceased had a permanent job and was below
40 years and the addition should be only 30% if the age
of the deceased was 40 to 50 years and no addition
should be made where the age of the deceased is more
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than 50 years. Where the annual income is in the taxable
range, the actual salary shall mean actual salary less tax.
In the cases where the deceased was self-employed or
was on a fixed salary without provision for annual
increments, the actual income at the time of death without
any addition to income for future prospects will be
appropriate. A departure from the above principle can
only be justified in extraordinary circumstances and very
exceptional cases."
C
5. In Santosh Devi v. National Insurance Co. Ltd.
& Ors. 7, a two judge Bench of this Court had earlier doubted
the decision with respect to future prospects in Sar/a Verma
(supra) and interpreted the limiting of grant of compensation
0 amount to a person who is self-employed, privately employed
or is engaged on fixed wages if he /she becomes victim of an
accident. The relevant paragraphs as discussed by this Court
in Santosh Devi's case is extracted hereunder:-
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"14. We find it extremely difficult to fathom any rationale
for the observation made in para 24 of the judgment in
Sar/a Verma case that where the deceased was selfemployed or was on a fixed salary without provision for
annual increment, etc., the courts will usually take only
the actual income at the time of death and a departure
from this rule should be made only in rare and exceptional
cases involving special circumstances. In our view, it will
be na"ive to say that the wages or total emoluments/
income of a person who is self-employed or who is
employed on a fixed salary without provision for annual
increment, etc., would remain the same throughout his
life.
15. The rise in the cost of living affects everyone across
the board. It does not make any distinction between rich
1 (2012) 6 sec 421
SHASHIKALAAND ORS. v. GANGALAKSHMAMMA
[V. GOPALAGOWDA, J.]
and poor. As a matter of fact, the effect of rise in prices
which directly impacts the cost of living is minimal on the
rich and maximum on those who are self-employed or
who get fixed income/emoluments. They are the worst
affected people. Therefore, they put in extra efforts to
generate additional income necessary for sustaining their
families.
16. The salaries of those employed under the Central
and State Governments and their agencies/
instrumentalities have been revised from time to time to
provide a cushion against the rising prices and provisions
have been made for providing security to the families of
the deceased employees. The salaries of those
employed in private sectors have also increased
manifold. Till about two decades ago, nobody could have
imagined that salary of Class IV employee of the
Government would be in five figures and total
emoluments of those in higher echelons of service will
cross the figure of rupees one lakh.
17. Although the wages/income of those employed in
unorganised sectors has not registered a corresponding
increase and has not kept pace with the increase in the
salaries of the government employees and those
employed in private sectors, but it cannot be denied that
there has been incremental enhancement in the income
of those who are self-employed and even those engaged
on daily basis, monthly basis or even seasonal basis.
We can take judicial notice of the fact that with a view to
meet the challenges posed by high cost of living, the
persons falling in the latter category periodically increase
the cost of their labour. In this context, it may be useful to
give an example of a tailor who earns his livelihood by
stitching clothes. If the cost of living increases and the
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prices of essentials go up, it is but natural for him to
increase the cost of his labour. So will be the cases of
ordinary skilled and unskilled labour, like, barber,
blacksmith, cobbler, mason, etc.
18. Therefore, we do not think that while making the
observations in the last three lines of para 24 of Sar/a
Vanna judgment, the Court had intended to lay down an
absolute rule that there will be no addition in the income
of a person who is self-employed or who is paid fixed
wages. Rather, it would be reasonable to say that a
person who is self-employed or is engaged on fixed
wages will also get 30% increase in his total income over
a period of time and if he/she becomes the victim of an
accident then the same formula deserves to be applied
for calculating the amount of compensation."
6. In Rajesh & Ors. (supra), a three judge Bench
decision of this Court, which took into consideration the
decisions of this Court in the cases of Sar/a Verma & Ors.
E and Santosh Devi (supra) held thus:
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"8. Since, the Court in Santosh Devi case actually
intended to follow the principle in the case of salaried
persons as laid down in Sar/a Verma case and to make
it applicable also to the self-employed and persons on
fixed wages, it is clarified that the increase in the case of
those groups is not 30% always; it will also have a
reference to the age. In other words, in the case of selfemployed or persons with fixed wages, in case, the
deceased victim was below 40 years, there must be an
addition of 50% to the actual income of the deceased
while computing future prospects. Needless to say that
the actual income should be income after paying the tax,
if any. Addition should be 30% in case the deceased
SHHASHIKALAAND ORS. v. GANGALAKSHMAMMA
23
[V. GOPALAGOWDA, J.]
was in the age group of 40 to 50 years."
A
7. Further, in National Insurance Company Ltd. v.
Pushpa, this Court in SLP No. 16735 of 2014 (arising out of
CC No. 8058 of 2014) vide order dated 2.7.2014 made a
reference to a larger Bench in view of the seeming conflict B
between the legal principles with respect to future prospects
laid down by this Court in the cases of Reshma Kumari &
Ors. and Rajesh & Ors. (supra). l>he relevant para from the
National Insurance Company case (supra) is extracted
hereunder:-
C
"Be it noted, though the decision in Reshma (supra) was
rendered at earlier of time, as is clear, the same has not
been noticed in Rajesh (supra) and that is why divergent
opinions have been expressed. We are of the considered .
opinion that as regards the manner of addition of income
of future prospects there should be an authoritative
pronouncement. Therefore, we think it appropriate to refer
the matter to a larger Bench."
Though, I am a party to the above reference, at the same
time, it is worth mentioning that the reference even in the case
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of a perceived conflict or disagreement with the views of a two
judge (or even a three judge) Bench does not permit a lower
Bench formation to refer the matter straightway to a five JJdge F
Bench. This principle was stated in Bharat Petroleum
Corporation Ltd. v. Mumbai Shramik Sangha & Ors.'· In
thJtjudgment, the Constitution Bench held that a decision of a
Constitution Bench binds Benches of two and three learned G
Judges of this Court and that judicial discipline obliges them
to follow it, regardless of their doubts about its correctness. At
the most, they can direct that the matter to be heard by a Bench
of three learned Judges. In Pradip Chandra Parija & Ors. v.
Pramod Chandra Patnaik & Ors. 9, a Bench of two learned H
a (2001> 4 sec 448
s (2002) 1 sec 1
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[2015] 5 S.C.R.
A judges expressed reservations with the judgment of a three
judge Bench and directed the matter to be placed before a
larger Bench of five judges. The Constitution Bench held that
the rule of Judicial discipline and propriety' as well as the
theory of precedents permitted only a Bench of the same
B quorum to question the correctness of the decision by another
Bench of co-ordinate strength upon which the matter can be
placed for consideration by a Bench of larger quorum. A Bench
of lesser quorum cannot thus, express disagreement with, or
C question the correctness of, the view of a Bench of a larger
quorum. Central Board of Dawoodi Bohra Community &
Anf. v. State of Maharashtra & Anr. 10 summarized, for future
guidance, the correct approach in such matters. The relevant
para of the said case is extracted hereunder:-
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"12.