Case: Oriental Insurance Company Ltd Vs. Jashuben

imponderables e.g. the life expectancy of the deceased and the dependants, the amount that the deceased would have earned during the remainder of his life, the amount that he would have contributed to the dependants during that period, the chances that the deceased may not have lived or the dependants may not live up to the estimated remaining period of their life expectancy, the chances that the deceased might have got better employment or income or might have lost his employment or income together. 9. The manner of arriving at the damages is to ascertain the net income of the deceased available for the support of himself and his dependants, and to deduct therefrom such part of his income as the deceased was accustomed to spend upon himself, as regards both self-maintenance and pleasure, and to ascertain what part of his net income the deceased was accustomed to spend for the benefit of the dependants. Then that should be capitalised by multiplying it by a figure representing the proper number of years purchase. 10. Much of the calculation necessarily remains in the realm of hypothesis and in that region arithmetic is a good servant but a bad master since there are so often many imponderables. In every case it is the overall picture that matters, and the court must try to assess as best as it can the loss suffered. 19. The same view was reiterated in New India Assurance Co. Ltd. v. Charlie and Anr. [(2005) 10 SCC 720] . However, therein although the words net income has been used but the same would ordinarily mean gross income minus the statutory deductions. We must also notice that the said decision has been followed in New India Assurance Co. Ltd. v. Kalpana (Smt.) and Ors. [(2007) 3 SCC 538] . 20. In Bijoy Kumar Dugar v. Bidya Dhar Dutta & Ors. [(2006) 3 SCC 242] , this Court, in a case where the salary of the deceased was found to be Rs.3600/- after deduction and wherein multiplier of 12 was applied where the age of the parents of the deceased was between 45 and 50 years, held that no further enhancement was warranted. 21. In U.P. State Road Transport Corporation v. Krishna Bala & Ors. [(2006) 6 SCC 249] , it was held: The multiplier method involves the ascertainment of the loss of dependency or the multiplicand having regard to the circumstances of the case and capitalizing the multiplicand by an appropriate multiplier. The choice of the multiplier is determined by the age of the deceased (or that of the claimants, whichever is higher) and by the 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 over the period for which the dependency is expected to last. 22. Therein a multiplier of 13 was adopted in a case where the age of the deceased was around 36. 23. Almost to the same effect is the decision of this Court in The Managing Director, TNSTC v. Sripriya & Ors. [2007 (4) SCALE 222 ]. In that case, a multiplier of 12 was applied in a case where the age of the deceased was 37 years. 24. Even certain allowances payable to the deceased could have been taken into consideration in the changing social scenario. In National Insurance Company Ltd. v. Indira Srivastava & Ors. [2007 (14) SCALE 461 ], it is useful to notice, this Court observed: 17. The amounts, therefore, which were required to be paid to the deceased by his employer by way of perks, should be included for computation of his monthly income as that would have been added to his monthly income by way of contribution to the family as contradistinguished to the ones which were for his benefit. We may, however, hasten to add that from the said amount of income, the statutory amount of tax payable thereupon must be deducted. Noticing the dictionary meaning of income, it was held: 19. If the dictionary meaning of the word income is taken to its logical conclusion, it should include those benefits, either in terms of money or otherwise, which are taken into consideration for the purpose of payment of income-tax or profession tax although some elements thereof may or may not be taxable or would have been otherwise taxable but for the exemption conferred thereupon under the statute. 25. We, therefore, are of the opinion that what would have been the income of the deceased on the date of retirement was not a relevant factor in the light of peculiar facts of this case and, thus, the approach of the Tribunal and the High Court must be held to be incorrect. It is impermissible in law to take into consideration the effect of revision in scale of pay w.e.f. 1.1.1997 or what would have been the scale of pay in 2002. 26. The loss of dependency, in our opinion, should be calculated on the basis as if the basic pay of the deceased been Rs. 3295/- X 2 = Rs. 6,590/-, thereto should be added 18.5% dearness allowance which comes to Rs.1219/-, child education allowance for two children @ Rs.240/- X 2 = Rs.480 and child bus fair Rs.160 X 2 = Rs.320/- should have been added which comes to Rs.8,609/-. 27. From the aforementioned figure 1/3rd should be deducted. After deduction, the amount of income comes to Rs.5,738/- per month [Rs.8609/- - Rs.2871/-] and the amount of compensation should be determined by adopting the multiplier of 13, which comes to Rs.8,95,128/- 28. In the present case, the High Court itself has applied the multiplier of 13. We are of the opinion that no interference therewith is warranted. We furthermore do not intend to interfere with the rate of interest in the facts and circumstance of the case. 29.

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

Explanation:
1[ds]We, therefore, are of the opinion that what would have been the income of the deceased on the date of retirement was not a relevant factor in the light of peculiar facts of this case and, thus, the approach of the Tribunal and the High Court must be held to be incorrect. It is impermissible in law to take into consideration the effect of revision in scale of pay w.e.f. 1.1.1997 or what would have been the scale of pay in 200226. The loss of dependency, in our opinion, should be calculated on the basis as if the basic pay of the deceased been Rs. 3295/- X 2 = Rs. 6,590/-, thereto should be added 18.5% dearness allowance which comes to Rs.1219/-, child education allowance for two children @ Rs.240/- X 2 = Rs.480 and child bus fair Rs.160 X 2 = Rs.320/- should have been added which comes to Rs.8,609/-27. From the aforementioned figure 1/3rd should be deducted. After deduction, the amount of income comes to Rs.5,738/- per month [Rs.8609/- - Rs.2871/-] and the amount of compensation should be determined by adopting the multiplier of 13, which comes to Rs.8,95,128/-28. In the present case, the High Court itself has applied the multiplier of 13. We are of the opinion that no interference therewith is warranted. We furthermore do not intend to interfere with the rate of interest in the facts and circumstance of the case.