In a significant ruling by the Supreme Court of India, the correct application of the multiplier in compensation cases has been emphasized. The judgment holds relevance to the case involving Ambika Thakur and marks a milestone in ensuring the appropriate calculation of compensation for such cases.
Facts
- Ambika Thakur was travelling in a Verna car from Chandigarh to Bhatinda when the accident occurred.
- The Appellants, who are the parents of the deceased, filed a Claim Petition seeking compensation of Rs. 25,00,000/-
- The MACT granted compensation of Rs. 10,40,000/- along with 7.5% interest per annum.
- The accident involved the Verna car and a Tata Ace vehicle which was being driven rashly and negligently.
- The High Court of Himachal Pradesh at Shimla passed a Judgment and Order on 22.05.2015 in FAO (MVA) No 386 of 2014.
- The compensation awarded included notional income, a deduction for being unmarried, a multiplier based on the mother’s age, loss of love and affection, and funeral expenses.
- Ambika Thakur, a 20-year-old student at the time, was undertaking an Air Hostess Training Program at the Frankfinn Institute, Chandigarh.
- The High Court, in the impugned Judgment dated 22.05.2015, dismissed the Appeal filed by the Claimants.
- The High Court upheld the amount of compensation that was awarded by the Motor Accident Claims Tribunal (MACT).
- Aggrieved by the Judgment of the High Court, the Appellant – Claimants have filed the present Civil Appeal.
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Arguments
- Insurance Company argued for the application of a Multiplier of 11 based on the age of the deceased’s mother, not the deceased.
- The Insurance Company claimed that compensation for Future Prospects and loss of estate was not awarded by the lower courts.
- The Appellants’ Counsel argued that the Multiplier of 18 should have been applied based on the deceased’s age at the time of the accident, citing the Sarla Verma & Ors. v. Delhi Transport Corporation & Anr. case.
- The Appellants’ Counsel criticized the MACT and High Court for using the wrong Multiplier of 11, considering the age of the deceased’s mother instead of the deceased.
Also Read: Tokas v. Insurance Company: Multiplier Application and Compensation Enhancement
Analysis
- The Multiplier to be applied in the case of a bachelor is computed based on the age of the deceased, not the age of the parents.
- The Multiplier aspect is significant for determining loss of dependency.
- A sum of Rs. 40,000/- is to be paid to each parent towards loss of consortium on the death of a child.
- Loss of dependency computation involves additions/deductions for income, deductions for personal living expenses of the deceased, and the multiplier based on the age of the deceased.
- The law settled in Sarla Verma case regarding the multiplier application with reference to the age of the deceased has not been revisited.
- Courts failed to award Future Prospects at 40% of the income of the deceased as mandated by the judgment in National Insurance Co. Ltd. v. Pranay Sethi & Ors.
- Compensation to be re-calculated after awarding 40% towards Future Prospects.
- The judgment in question relied on the case of Munna Lal Jain which is a three Judge Bench judgment.
- The Multiplier applied to the facts of the case was found to be incorrect.
- Reshma Kumari’s relevant portion referred to the Sarla Verma case and approved it.
- The multiplier of 18 should have been applied in this case as the deceased was 20 years old.
- The issue of using the age of the deceased, not the age of the dependents, is settled by previous judgments of the court.
- It is established that the age of the deceased is the factor to be considered in such cases.
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Decision
- Enhanced compensation of Rs. 13,48,000/- awarded to the Appellants, with specific breakdowns for different components
- The enhanced amount will carry Simple Interest @7.5% p.a. from the date of filing the Claim Petition till realization
- Loss of estate @Rs.15,000/- awarded to each Appellant as per the judgment in Pranay Sethi (supra)
- Award of Rs. 25,000/- towards loss of love and affection maintained
- Directions given to the Insurance Company to pay the enhanced compensation within 1 month
- Breakdown of enhanced compensation includes income, future prospects, personal expenses deduction, total income, multiplier, loss of future income, loss of consortium, and loss of estate
- Each Appellant entitled to Rs. 40,000/- towards loss of consortium
- Funeral expenses and interest awarded by MACT upheld
- All pending applications disposed of
Case Title: JOGINDER SINGH . Vs. ICICI LOMBARD GENERAL INSURANCE COMPANY
Case Number: C.A. No.-006291-006291 / 2019
