Case: National Insurance Co.Ltd Vs. Saroj

adopted by this Court taking note of the prevalent banking rate of interest.12. In fact in Trilok Chands case (supra), after reference to Second Schedule to the Act, it was noticed that the same suffers from many defects. It was pointed out that the same is to serve as a guide, but cannot be said to be invariable ready reckoner. However, the appropriate highest multiplier was held to be 18. The highest multiplier has to be for the age group of 21 years to 25 years when an ordinary Indian Citizen starts independently earning and the lowest would be in respect of a person in the age group of 60 to 70, which is the normal retirement age.13. Keeping in view the parameters indicated above it would be appropriate to fix the multiplier at 13 and the rate of interest at 6% p.a. The MACT shall work out the entitlements on the aforesaid basis." 13. Reliance has been placed by Dr. Agarwal on a decision of this Court in United India Insurance Co. Ltd. Etc. v. Patricia Jean Mahajan & Ors. [(2002) 6 SCC 281] , wherein multiplier of 10 has been used where the deceased used to get salary in US $. Yet again in The Managing Director, TNSTC Ltd. v. K.I. Bindu & Ors. [(2005) 8 SCC 473] , this Court held : "14. 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-up over the period for which the dependency is expected to last." Reliance has also been placed on Tamil Nadu State Transport Corporation Ltd. v. S. Rajapriya and two Ors. [(2005) 6 SCC 236] , wherein it was held : "12. 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-up over the period for which the dependency is expected to last." 14. The amount of compensation which is required to be determined by the Tribunal must be just. In certain situations as for example in the case of the death of only son to a mother, no monetary compensation would be sufficient. Whereas the court, while determining the amount of compensation, should consider the amount of monetary loss which had been and would be suffered by the heirs and legal representatives of the deceased, the same should not be a windfall. It is for the aforementioned purpose, not only the take home salary is to be taken into consideration but also other allowance and perks which would have benefited the entire family. [See National Insurance Co. Ltd. v. Indira Srivastava & Ors. [(2008) 2 SCC 763] . 15. The prospective loss of future earnings should also be borne in mind. The quantum of compensation must be determined on certain legal principles. The deceased might have a bright future prospect. He would have been, in normal situation, considered for promotion immediately. Although rigid tests are difficult to be laid down, any kind of hypothesis, as far as possible should be avoided. In Abati Bezbaruah v. Dy. Director General Geological Survey of India & Anr. [(2003) 3 SCC 148] , this Court observed : "11. It is now a well settled principle of law that the payment of compensation on the basis of structured formula as provided for under the Second Schedule should not ordinarily be deviated from. Section 168 of the Motor Vehicles Act lays down the guidelines for determination of the amount of compensation in terms of Section 166 thereof. Deviation of the structured formula, however, as has been held by this Court, may be resorted to in exceptional cases. Furthermore, the amount of compensation should be just and fair in the facts and circumstances of each case." In this case, the deceased was a technician employed in a Multinational company. The Tribunal as also the High Court while determining the amount of compensation did not bestow its consideration to future prospects. It is trite that the Court should look into the circumstances of each and every case for arriving at a just compensation. His future prospect has not been taken into consideration. In case of this nature, therefore, we do not think that application of multiplier of 16 was on a higher side. 16. Submission of Mr. Agarwal that the Court should have awarded only the sum claimed by the claimant, in our opinion, is not correct.17. Contention raised on behalf of the appellant that the claimant had not disclosed as to what amount they had received from the insurance company with whom the scooter driven by the deceased was insured cannot be considered by us for the first time as no such contention has been raised before the courts below. The legal representatives of the deceased examined themselves as witnesses. They should have cross-examined on the said question. The insurance company could have found out from other insurance company also as to whether, in fact, a claim had been advanced and whether insurance company paid any amount to them. 1

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]9. It has not been denied or disputed that the multiplier method can be applied for the purpose of determination of the amount of compensation in a motor accident in terms of the provisions of the Motor Vehicles Act, 1988. We have, however, do not mean to suggest that the multiplier specified in the Second Schedule should be appliedthat be so, a question arises as to why the injured claimant and/or heirs and legal representatives of the victim in a case of death on proof of negligence on the part of the driver of a motor vehicle would get a lesser amount than the one specified in the Second Schedule although both are similarly situated. Such a dichotomy, in our opinion, could be resolved by finding the applicability of multiplier in the cases where the victims have suffered injuries resulting in permanent total disablement or permanent partialit is in that view of the matter, there is some sort of a cleavage of opinion in the matter of application of multiplier. Whereas in one set of decisions multiplier specified in the Second Schedule has been applied, in another set of decisions, a lesser multiplier was applied. In either set of the decisions sometimes, no principle of law has been laid down. It is, however, accepted at the Bar that the multiplier specified in the Second Schedule should be taken to be the guidelines.17. Contention raised on behalf of the appellant that the claimant had not disclosed as to what amount they had received from the insurance company with whom the scooter driven by the deceased was insured cannot be considered by us for the first time as no such contention has been raised before the courts below. The legal representatives of the deceased examined themselves as witnesses. They should have cross-examined on the said question. The insurance company could have found out from other insurance company also as to whether, in fact, a claim had been advanced and whether insurance company paid any amount tot be so, a question arises as to why the injured claimant and/or heirs and legal representatives of the victim in a case of death on proof of negligence on the part of the driver of a motor vehicle would get a lesser amount than the one specified in the Second Schedule although both are similarly situated. Such a dichotomy, in our opinion, could be resolved by finding the applicability of multiplier in the cases where the victims have suffered injuries resulting in permanent total disablement or permanent partialit is in that view of the matter, there is some sort of a cleavage of opinion in the matter of application of multiplier. Whereas in one set of decisions multiplier specified in the Second Schedule has been applied, in another set of decisions, a lesser multiplier was applied. In either set of the decisions sometimes, no principle of law has been laid down. It is, however, accepted at the Bar that the multiplier specified in the Second Schedule should be taken to be the guidelines.