Case: Arvind Kumar Mishra Vs. New India Assurance Co. Ltd.

calculation as to what capital sum, if invested at a rate of interest appropriate to a stable economy, would yield the multiplicand by way of annual interest. In ascertaining this, regard should also be had to the fact that ultimately the capital sum should also be consumed-up over the period for which the dependency is expected to last.”17. The multiplier represents the number of years’ purchase on which the loss of dependency is capitalised. Take for instance a case where annual loss of dependency is Rs. 10,000. If a sum of Rs. 1,00,000 is invested at 10% annual interest, the interest will take care of the dependency, perpetually. The multiplier in this case works out to 10. If the rate of interest is 5% per annum and not 10% then the multiplier needed to capitalise the loss of the annual dependency at Rs. 10,000 would be 20. Then the multiplier, i.e., the number of years’ purchase of 20 will yield the annual dependency perpetually. Then allowance to scale down the multiplier would have to be made taking into account the uncertainties of the future, the allowances for immediate lump sum payment, the period over which the dependency is to last being shorter and the capital feed also to be spent away over the period of dependency is to last, etc. Usually in English Courts the operative multiplier rarely exceeds 16 as maximum. This will come down accordingly as the age of the deceased person (or that of the dependants, whichever is higher) goes up.” 9. The principles laid down in Susamma Thomas still hold the field; the only variation has been in respect of maximum multiplier. In the present case the Tribunal as well as the High Court seriously erred in not assessing the compensation for personal injury to the appellant in accord with the recognized mode i.e., by taking an appropriate multiplier of an appropriate multiplicand.10. The appellant at the time of accident was a final year engineering (Mechanical) student in a reputed college. He was a remarkably brilliant student having passed all his semester examinations in distinction. Due to the said accident he suffered grievous injuries and remained in coma for about two months. His studies got interrupted as he was moved to different hospitals for surgeries and other treatments. For many months his condition remained serious; his right hand was amputated and vision seriously affected. These multiple injuries ultimately led to 70% permanent disablement. He has been rendered incapacitated and a career ahead of him in his chosen line of mechanical engineering got dashed for ever. He is now in a physical condition that he requires domestic help throughout his life. He has been deprived of pecuniary benefits which he could have reasonably acquired had he not suffered permanent disablement to the extent of 70% in the accident.11. On completion of Bachelor of Engineering (Mechanical) from the prestigious institute like B.I.T., it can be reasonably assumed that he would have got a good job. The appellant has stated in his evidence that in the campus interview he was selected by Tata as well as Reliance Industries and was offered pay package of Rs. 3,50,000/- per annum. Even if that is not accepted for want of any evidence in support thereof, there would not have been any difficulty for him in getting some decent job in the private sector. Had he decided to join Government service and got selected, he would have been put in the pay scale for Assistant Engineer and would have at least earned Rs. 60,000/- per annum. Wherever he joined, he had a fair chance of some promotion and remote chance of some high position. But uncertainties of life cannot be ignored taking relevant factors into consideration. In our opinion, it is fair and reasonable to assess his future earnings at Rs. 60,000/- per annum taking the salary and allowances payable to an Assistant Engineer in public employment as the basis. Since he suffered 70% permanent disability, the future earnings may be discounted by 30% and, accordingly, we estimate upon the facts that the multiplicand should be Rs. 42,000/- per annum. The appellant at the time of accident was about 25 years. As per the decision of this Court in Sarla Verma (Smt.) and Ors. v. Delhi Transport Corporation and Anr., VI (2009) SLT 663=162 (2009) DLT 278 (SC)=III (2009) ACC 708 (SC)=(2009) 6 SCC 121 , the operative multiplier would be 18. The loss of future earnings by multiplying the multiplicand of Rs. 42,000/- by a multiplier of 18 comes to Rs. 7,56,000/-. The damages to compensate the appellant towards loss of future earnings, in our considered judgment, must be Rs. 7,56,000/-. The Tribunal awarded him Rs. 1,50,000/- towards treatment including the medical expenses. The same is maintained as it is and, accordingly, the total amount of compensation to which the appellant is entitled is Rs. 9,06,000/- .12. Before we close, we must notice in all fairness to the learned Counsel for the insurer his submission that the appellant is entitled to compensation in accordance with the Second Schedule appended to the 1988 Act only. This submission overlooks the fact that the appellant made his claim under Section 166 of the 1988 Act and not under Section 163A. It is true that in Reshma Kumari & Ors. v. Madan Mohan & Anr., (2009) 13 SCC 422 a two-Judge Bench of this Court has referred the question whether multiplier specified in the Second Schedule should be taken to be a guide for calculation of the amount of compensation payable in a case falling under Section 166 to the larger bench and the said question is not yet authoritatively decided. However, in a case such as the present case, we find no justification to await decision of the larger bench on the aforenoticed question as there are already few decisions of this Court taking a view that the Second Schedule has no application to the claim petition made under Section 166 of the 1988 Act.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]9. The principles laid down in Susamma Thomas still hold the field; the only variation has been in respect of maximum multiplier. In the present case the Tribunal as well as the High Court seriously erred in not assessing the compensation for personal injury to the appellant in accord with the recognized mode i.e., by taking an appropriate multiplier of an appropriate multiplicand.10. The appellant at the time of accident was a final year engineering (Mechanical) student in a reputed college. He was a remarkably brilliant student having passed all his semester examinations in distinction. Due to the said accident he suffered grievous injuries and remained in coma for about two months. His studies got interrupted as he was moved to different hospitals for surgeries and other treatments. For many months his condition remained serious; his right hand was amputated and vision seriously affected. These multiple injuries ultimately led to 70% permanent disablement. He has been rendered incapacitated and a career ahead of him in his chosen line of mechanical engineering got dashed for ever. He is now in a physical condition that he requires domestic help throughout his life. He has been deprived of pecuniary benefits which he could have reasonably acquired had he not suffered permanent disablement to the extent of 70% in the accident.11. On completion of Bachelor of Engineering (Mechanical) from the prestigious institute like B.I.T., it can be reasonably assumed that he would have got a good job. The appellant has stated in his evidence that in the campus interview he was selected by Tata as well as Reliance Industries and was offered pay package of Rs. 3,50,000/- per annum. Even if that is not accepted for want of any evidence in support thereof, there would not have been any difficulty for him in getting some decent job in the private sector. Had he decided to join Government service and got selected, he would have been put in the pay scale for Assistant Engineer and would have at least earned Rs. 60,000/- per annum. Wherever he joined, he had a fair chance of some promotion and remote chance of some high position. But uncertainties of life cannot be ignored taking relevant factors into consideration. In our opinion, it is fair and reasonable to assess his future earnings at Rs. 60,000/- per annum taking the salary and allowances payable to an Assistant Engineer in public employment as the basis. Since he suffered 70% permanent disability, the future earnings may be discounted by 30% and, accordingly, we estimate upon the facts that the multiplicand should be Rs. 42,000/- per annum. The appellant at the time of accident was about 25 years. As per the decision of this Court in Sarla Verma (Smt.) and Ors. v. Delhi Transport Corporation and Anr., VI (2009) SLT 663=162 (2009) DLT 278 (SC)=III (2009) ACC 708 (SC)=(2009) 6 SCC 121 , the operative multiplier would be 18. The loss of future earnings by multiplying the multiplicand of Rs. 42,000/- by a multiplier of 18 comes to Rs. 7,56,000/-. The damages to compensate the appellant towards loss of future earnings, in our considered judgment, must be Rs. 7,56,000/-. The Tribunal awarded him Rs. 1,50,000/- towards treatment including the medical expenses. The same is maintained as it is and, accordingly, the total amount of compensation to which the appellant is entitled is Rs. 9,06,000/- .12. Before we close, we must notice in all fairness to the learned Counsel for the insurer his submission that the appellant is entitled to compensation in accordance with the Second Schedule appended to the 1988 Act only. This submission overlooks the fact that the appellant made his claim under Section 166 of the 1988 Act and not under Section 163A. It is true that in Reshma Kumari & Ors. v. Madan Mohan & Anr., (2009) 13 SCC 422  a two-Judge Bench of this Court has referred the question whether multiplier specified in the Second Schedule should be taken to be a guide for calculation of the amount of compensation payable in a case falling under Section 166 to the larger bench and the said question is not yet authoritatively decided. However, in a case such as the present case, we find no justification to await decision of the larger bench on the aforenoticed question as there are already few decisions of this Court taking a view that the Second Schedule has no application to the claim petition made under Section 166 of the 1988 Act.