Case: N. JAYASREE &amp; ORS Vs. CHOLAMANDALAM MS GENERAL  INSURANCE COMPANY LTD

3. The appellants filed the aforesaid claim petition before the MACT seeking compensation on account of the death of N. Venugopalan Nair in a motor vehicle accident which occurred on 20.06.2011. Appellant no.1 is the wife of the deceased, appellant nos. 2 and 3 are his daughters and appellant no.4 is his mother-in-law.4. There is no dispute as to the occurrence of the accident and the liability of the respondent-insurer to pay the compensation. In view of this admitted position, it is unnecessary to narrate the factual aspects of the accident.5. The deceased was aged 52 years at the time of the accident.The MACT took the annual salary of the deceased as Rs.8,87,148. To this, the MACT applied a multiplier of 11 and deducted one-fourth (1/4th) of the income towards his personal expenses for the purpose of calculation of the compensation under the head of loss of dependency. A total sum of Rs.73,18,971/- (Rupees seventy-three lakhs eighteen thousand nine hundred seventy-one only) was awarded towards loss of dependency. The MACT awarded a total sum of Rs.74,50,971/- (Rupees seventy-four lakhs fifty thousand nine hundred seventy-one only) towards compensation with interest @ 7.5 per cent per annum from the date of the claim petition till the date of realization. Thus, the amount awarded to the appellants is as under:									S.No.            									Head of Claim            									Amount Claimed (in rupees)            												Amount Awarded (in rupees)            												Basis vital details in a nut shell            													1.            									Transportation            									5,000/-            									4,000/-            									In view  of the transportation charges             																2.            									Funeral expenses            									10,000/-            									7,000/-            									Nominal amount            													3.            									Damage to clothings            									1,500/-            									1,000/-            									…do……            													4.            									Loss of dependency            									1,06,82,100/-            									73,18,971/-            									(8,87,148-            			2,21,787)×11            			=73,18,971/-            													5.            									Pain and sufferings            									10,000/-            									15,000/-            									In view of the pain suffered by the victim before his death            													6.            									Loss     of     love    and affection            									1,00,000/-            									70,000/-            						Petitioners   2,3 and   4   have lost the   love   and affection   of   the victim										7.            									Loss of consortium            									1,00,000/-            									25,000/-            									The first petition has lost the companionship of her husband            													8.            									Loss of estate            									1,00,000/-            									10,000/-            									Nominal amount            													9.            									Loss of expectation of            			life            									2,00,000/-            									Not allowed            									Other heads allowed            													             									TOTAL            									1,12,08,600/-            									74,50,971/-            									……………            						6. However, the High Court held that appellant no.4 was not a legal representative of the deceased. Further, the High Court held that the MACT ought to have applied split multiplier for the assessment of the dependency compensation. The High Court fixed monthly income of the deceased as Rs.40,000/- (Rupees forty thousand only) and deducted one-third (1/3rd) of the income towards his personal expenses. It applied multiplier 7 for calculating dependency compensation for the post-retiral period and, for the pre-retirement period, a multiplier of 4 was applied. Accordingly, the High Court awarded compensation of Rs.23,65,728/- (Rupees twenty-three lakhs sixty-five thousand seven hundred twenty-eight only), towards loss of dependency for pre-retiral period and a sum of Rs.22,40,000/- (Rupees twenty-two lakhs forty thousand only) towards loss of dependency for post-retiral period. A sum of Rs.1,00,000/- (Rupees one lakh only) was awarded towards loss of consortium, Rs.25,000/- (Rupees twenty-five thousand only) towards funeral expenses, and Rs.80,000/- (Rupees eighty thousand only) towards lossof the transportation chargesof love and affectionvictim. In total, a sum of Rs.48,39,728/- (Rupees forty-eight lakhs thirty-nine thousand seven hundred twenty-eight only) was awarded as compensation by the High Court.

Court's reasoning:
In Sarla Verma (2009) 6 SCC 121,  this Court has laid down as under:16. ...Just compensation is adequate compensation which is fair and equitable, on the facts and circumstances of the case, to make good the loss suffered as a result of the wrong, as far as money can do so, by applying the well-settled principles relating to award of compensation. It is not intended to be a bonanza, largesse or source of profit.11. In Sarla Verma (2009) 6 SCC 121  it was further held that where the deceased was married, the deduction towards personal and living expenses of the deceased should be one-third (1/3rd) where the number of dependent family members is between 2 and 3, one-fourth (1/4th) where the number of dependent family members is between 4 and 6, and one-fifth (1/5th) where the number of dependent family members exceeds six.12. In the instant case, the appellants have contended that the mother-in-law of the deceased was staying with the deceased and his family members since a long time.Taking into consideration the number of dependents of the deceased including his mother-in-law (four in number), the MACT had deducted one fourth (1/4th) of the income towards his personal expenses. However, the High Court has held that appellant no.4 being the mother-in-law of the deceased, cannot be reckoned as a dependent of the deceased. The High Court, therefore, determined the number of dependents as 3 and accordingly deducted one-third (1/3rd) of the income of the deceased towards his personal expenses.16. In our view, the term legal representative should be given a wider interpretation for the purpose of Chapter XII of MV Act and it should not be confined only to mean the spouse, parents and children of the deceased. As noticed above, MV Act is a benevolent legislation enacted for the object of providing monetary relief to the victims or their families. Therefore, the MV Act calls for a liberal and wider interpretation to serve the real purpose underlying the enactment and fulfil its legislative intent. We are also of the view that in order to maintain a claim petition, it is sufficient for the claimant to establish his loss of dependency. Section 166 of the MV Act makes it clear that every legal representative who suffers on account of the death of a person in a motor vehicle accident should have a remedy for realization of compensation.17. It is settled that percentage of deduction for personal expenses cannot be governed by a rigid rule or formula of universal application. It also does not depend upon the basis of relationship of the claimant with the deceased. In some cases, the father may have his own income and thus will not be considered as dependent. Sometimes, brothers and sisters will not be considered as dependents because they may either be independent or earning or married or be dependent on the father. The percentage of deduction for personal expenditure, thus, depends upon the facts and circumstances of each case.In Gujarat State Road Transport Corporation, Ahmedabad vs. Ramanbhai Prabhatbhai and Anr. (1987) 3 SCC 234  this Court while considering the entitlement of the brother of a deceased who died in a motor vehicle accident to maintain a claim petition under the provisions of the MV Act, held as under:13. We feel that the view taken by the Gujarat High Court is in consonance with the principles of justice, equity and good conscience having regard to the conditions of the Indian society. Every legal representative who suffers on account of the death of a person due to a motor vehicle accident should have a remedy for realisation of compensation and that is provided by Sections 110-A to 110-F of the Act. These provisions are in consonance with the principles of law of torts that every injury must have a remedy. It is for the Motor Vehicles Accidents Tribunal to determine the compensation which appears to it to be just as provided in Section 110-B of the Act and to specify the person or persons to whom compensation shall be paid. The determination of the compensation payable and its apportionment as required by Section 110-B of the Act amongst the legal representatives for whose benefit an application may be filed under Section 110-A of the Act have to be done in accordance with well-known principles of law. We should remember that in an Indian family brothers, sisters and brothers children and sometimes foster children live together and they are dependent upon the bread-winner of the family and if the bread-winner is killed on account of a motor vehicle accident, there is no justification to deny them compensation relying upon the provisions of the Fatal Accidents Act, 1855 which as we have already held has been substantially modified by the provisions contained in the Act in relation to cases arising out of motor vehicles accidents. We express our approval of the decision in Megjibhai Khimji Vira v. Chaturbhai Taljabhagujri AIR 1977 Guj 195 and hold that the brother of a person who dies in a motor vehicle accident is entitled to maintain a petition under Section 110-A of the Act if he is a legal representative of the deceased.20. In Montford Brothers of St. Gabriel and Anr. vs. United India Insurance and Anr.(2014) 3 SCC 394  this Court was considering the claim petition of a charitable society for award of compensation on account of the death of its member. The appellant-society therein was a registered charitable society and was running various institutions as a constituent unit of Catholic church. Its members, after joining the appellant-society, renounced the world and were known as brother. In this case, a brother died in a motor vehicle accident. The claim petition filed by the appellant-society seeking compensation on account of the death of aforesaid brother was rejected by the High Court on the ground of its maintainability.This Court after examining various provisions of the MV Act held that the appellant-society was the legal representative of the deceased brother. While allowing the claim petition it was observed as under:17. A perusal of the judgment and order of the Tribunal discloses that although Issue 1 was not pressed and hence decided in favour of the appellant claimants, while considering the quantum of compensation for the claimants, the Tribunal adopted a very cautious approach and framed a question for itself as to what should be the criterion for assessing compensation in such case where the deceased was a Roman Catholic and joined the church services after denouncing his family, and as such having no actual dependents or earning? For answering this issue, the Tribunal relied not only upon judgments of American and English Courts but also upon Indian judgments for coming to the conclusion that even a religious order or an organisation may suffer considerable loss due to the death of a voluntary worker. The Tribunal also went on to decide who should be entitled for compensation as legal representative of the deceased and for that purpose it relied upon the Full Bench judgment of Patna High Court in Sudama Devi v. Jogendra Choudhary AIR 1987 Pat 239,  which held that the term legal representative is wide enough to include even intermeddlers with the estate of a deceased. The Tribunal also referred to some Indian judgments in which it was held that successors to the trusteeship and trust property are legal representatives within the meaning of Section 2(11) of the Code of Civil Procedure.21. Coming to the facts of the present case, the fourth appellant was the mother-in-law of the deceased. Materials on record clearly establish that she was residing with the deceased and his family members. She was dependent on him for her shelter and maintenance. It is not uncommon in Indian Society for the mother-in-law to live with her daughter and son-in-law during her old age and be dependent upon her son-in-law for her maintenance. Appellant no.4 herein may not be a legal heir of the deceased, but she certainly suffered on account of his death. Therefore, we have no hesitation to hold that she is a legal representative under Section 166 of the MV Act and is entitled to maintain a claim petition.22. The deceased was aged 52 years at the time of the accident.He was working as an Assistant Professor and getting a monthly salary of Rs.83,831/- (Rupees eighty-three thousand eight hundred thirty-one only). The evidence on record shows that he was a meritorious man having the qualifications of M.Sc, M.Phil. He was a first-class holder in M.Sc. He was a Selection Grade Lecturer in Mathematics and was a subject expert. He was also included in the panel of Mahatma Gandhi University and was appointed as Examiner in the Board of Examiners for CBCCSS Programme in Mathematics. Subsequently, he was appointed as Deputy Chairman of the Examiners Board. Evidence on record also shows that there is acute shortage of lecturers in Mathematics for appointment in colleges and retired Mathematics Professors are appointed in so many colleges. It is common knowledge that the teachers, especially Mathematics teachers, are employed even after their retirement in coaching centers. They may also hold private tuition classes. This would increase their income manifold after retirement.23. In Sarla Verma (2009) 6 SCC 121,  this Court has held that while calculating the compensation, the courts should take into consideration not only the actual income at the time of the death but should also make additions by taking note of future prospects. It was further held that though the evidence may indicate a different percentage of increase, it is necessary to standardize the addition to avoid disparate yardsticks being applied or disparate methods of calculation being adopted.27. In Puttamma and Ors. vs. K.L. Narayana Reddy and Anr. (2013) 15 SCC 45,  this Court was again considering a case where split multiplier for the purpose of calculation of dependency compensation was applied. It was held thus:32. For determination of compensation in motor accident claims under Section 166 this Court always followed multiplier method. As there were inconsistencies in the selection of a multiplier, this Court in Sarla Verma (2009) 6 SCC 121  prepared a table for the selection of a multiplier based on the age group of the deceased/victim. The 1988 Act, does not envisage application of a split multiplier.33. In K.R. Madhusudhan v. Administrative Officer (2011) 4 SCC 689  this Court held as follows: (SCC p. 692, paras 14-15)14. In the appeal which was filed by the appellants before the High Court, the High Court instead of maintaining the amount of compensation granted by the Tribunal, reduced the same. In doing so, the High Court had not given any reason. The High Court introduced the concept of split multiplier and departed from the multiplier used by the Tribunal without disclosing any reason therefor. The High Court has also not considered the clear and corroborative evidence about the prospect of future increment of the deceased. When the age of the deceased is between 51 and 55 years the multiplier is 11, which is specified in the 2nd column in the Second Schedule to the Motor Vehicles Act, and the Tribunal has not committed any error by accepting the said multiplier. This Court also fails to appreciate why the High Court chose to apply the multiplier of 6.15. We are, thus, of the opinion that the judgment of the High Court deserves to be set aside for it is perverse and clearly contrary to the evidence on record, for having not considered the future prospects of the deceased and also for adopting a split multiplier method.34. We, therefore, hold that in absence of any specific reason and evidence on record the tribunal or the court should not apply split multiplier in routine course and should apply multiplier as per decision of this Court in Sarla Verma (2009) 6 SCC 121  as affirmed in Reshma Kumari (2013) 9 SCC 65 .28. From the above discussion it is clear that at the time of calculation of the income, the Court has to consider the actual income of the deceased and addition should be made to take into account future prospects. Further, while the evidence in a given case may indicate a different percentage of increase, standardization of the addition for future prospects should be made to avoid different yardsticks being applied or different methods of calculation being adopted. In Pranay Sethi (2017) 16 SCC 680,  the Constitution Bench has directed addition of 15% of the salary in case the deceased was between the age of 50 to 60 years as a thumb rule, where a deceased had a permanent job. In view of the above, the High Court was not justified in applying split multiplier in the instant case.We have already noticed that the deceased was working as Assistant Professor at Devaswom Board Pampa College, Paruamala, and was drawing a monthly income of Rs.83,381/- which is clear from his salary certificate (Ex.A-5) issued by the Principal of Devaswom Board Pampa College, Paruamala. The salary slip received by the deceased for the month of May 2011 (Ex.A-6) also shows that his monthly salary was Rs.83,381/-. These documents have been marked in evidence through the Principal of the said College who was examined as PW-1. Thus, annual income of the deceased comes to Rs.10,00,572/-. This Court in Sarla Verma (2009) 6 SCC 121  has made it clear that the Annual Income of the deceased minus the income tax should be taken into account at the time of his death for the purpose of calculation of loss of dependency. The deceased had to pay Rs.1,13,424/- towards income tax per annum. After deducting the said amount the actual income of the deceased comes to Rs.8,87,148/-.30. The deceased was aged 52 years at the time of his death and had a permanent job. Having regard to the judgment in Pranay Sethi (2017) 16 SCC 680,  an addition of 15% of his actual salary should be added towards future prospectus. Therefore, 15% of his actual salary comes to Rs.1,33,072/-31. Since the deceased was 52 years at the time of his death, the applicable multiplier is 11. As we have held that appellant no.4, the mother-in-law of the deceased is also a dependent and a legal representative under Section 166 of the MV Act, the total number of dependents left behind by the deceased is four. Hence, 1/4th of the income (actual salary + future prospects) should be deducted towards his personal expenses. Thus, the total compensation payable towards loss of dependency is as under:									(1)            													Annual Salary				less Tax				Actual Salary :												Rs.10,00,572            			Rs.1,13,424             			Rs.8,87,148            													(2)            									Future Prospects :15% of Actual Salary            									Rs.1,33,072            													(3)            									Loss of dependency :            			(1) 8,87,148 + (2) 1,33,072 – ¼ i.e. Rs.2,55,055 x 11            									Rs.84,16,815            						(1) 8,87,148 + (2) 1,33,072 – ¼ i.e. Rs.2,55,055 x 1132. In Pranay Sethi (2017) 16 SCC 680,  this Court has awarded a total sum of Rs.70,000/- (Rupees seventy thousand only) under conventional heads, namely, loss of estate, loss of consortium and funeral expenses. It was held that the said sum should be enhanced at the rate of 10% in every three years. It was held thus:59.8. Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs 15,000, Rs 40,000 and Rs 15,000 respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years.33. The judgment in Pranay Sethi (2017) 16 SCC 680  was rendered in the year 2017. Therefore, the claimants are entitled for 10% enhancement. Thus, a sum of Rs.16,500/- each is awarded towards loss of estate and funeral expenses.34. A three-Judge Bench of this Court in United India Insurance Co. Ltd. vs. Satinder Kaur @ Satwinder Kaur and Ors (2020) SCC Online SC 410 : AIR 2020 SC 3076 , after considering Pranay Sethi (2017) 16 SCC 680,  has awarded spousal consortium at the rate of Rs.40,000/- (Rupees forty thousand only) and towards loss of parental consortium to each child at the rate of Rs.40,000/- (Rupees forty thousand only). The compensation under these heads also needs to be increased by 10%. Thus, the spousal consortium is awarded at Rs.44,000/- (Forty-four thousand only), and towards parental consortium at the rate of Rs.44,000/- each (Total Rs.88,000/-) is awarded to the two children.