Multiplier Calculation in Fatal Motor Accident Case: A Landmark Ruling by the Supreme Court of India

In a significant legal development, the Supreme Court of India has made a landmark ruling on multiplier calculation in fatal motor accident cases. The case revolves around the determination of the multiplier for compensation in the tragic demise of a young individual, affecting the financial outcomes for the dependents involved. The judgment is set to have far-reaching implications in how compensation is computed in similar cases.

Facts

• The deceased, Shri Yitesh Sadana alias Prince, aged 19 years, passed away due to injuries from a motor vehicle accident on 18.04.2007 caused by the negligence of the bus driver with registration DL-1PA-4403.
• The appellants, the widowed mother and minor brother of the deceased, are seeking further enhancement of compensation.
• The High Court of Delhi partially allowed the appeal and increased the compensation from Rs 3,72,620/- to Rs 5,02,620/- in MAC Appeal No. 479 of 2009.
• The offending vehicle was insured with New India Assurance Co Ltd for third party risk.
• The Tribunal’s award on the claim petition was partially allowed on 06.06.2009.
• The appellants have filed this appeal challenging the High Court’s decision.
• The Tribunal did not consider the future prospects of the deceased while enhancing the compensation.
• The Tribunal calculated the loss of dependency at Rs. 3,52,620/- based on the deceased’s income of Rs. 3,918/- per month.
• The deceased was self-employed as per the material on record.
• The Tribunal reduced 50% of the deceased’s salary for personal expenses as he was a bachelor.
• The High Court increased the award to Rs. 5,02,610/-.
• The age of the mother, 42 years, was used to apply the multiplier ’15’.

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Issue

• The only legal issue being considered in this case is the calculation of the multiplier in motor accident cases resulting in the death of a bachelor.
• Specifically, the question is whether the age of the deceased or the age of the dependents should be taken into account for determining the multiplier.
• This issue is the main focus of the cross-appeals presented in the case.
• The determination of the multiplier is crucial in cases involving the death of a person and impacts the calculation of compensation for dependents.

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Arguments

• The learned counsel for the appellants argues that the deceased was 19 years old at the time of the incident.
• Therefore, the applicable multiplier for this age group is ’18’.
• The Tribunal and the High Court used a multiplier of ’15’ based on the age of the deceased’s mother to determine compensation.
• The High Court did not consider future prospects when awarding compensation.
• The counsel for the insurer has defended the judgment and order.

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Analysis

• Established method of computation for compensation in case of deceased self-employed or on a fixed salary based on age.
• Additional 40% of established income for deceased below 40 years, 25% for 40-50 years, and 10% for 50-60 years.
• Established income considered as income minus tax component.
• In case of deceased aged 19 years, 40% additional income added in computation of compensation.
• 50% of total amount deducted for personal expenses the deceased would have as a bachelor.
• Deceased’s age, not dependent’s age, to be considered for multiplier as per Court’s ruling.
• Constitution Bench’s decision in National Insurance Company Limited v. Pranay Sethi regarding future prospects in compensation.
• Award of compensation under conventional heads such as loss of estate, consortium, and funeral expenses.
• Application of multiplier at ’15’ considering the mother’s age, not the deceased’s, by the High Court.

Decision

• The appeal is partly allowed.
• Claimants entitled to compensation for loss of dependency.
• Compensation amount calculated as Rs. 5,92,488/- for loss of dependency.
• Future prospects of the deceased also considered.
• 50% of gross income deducted for personal living expenses.
• Total compensation payable to claimants determined as Rs. 6,62,448/-.
• Insurance company directed to deposit Rs. 1,60,000/- with interest.
• Gross income of the deceased calculated as Rs. 5,485/-.
• High Court’s determination of monthly salary at Rs. 3,918/- deemed correct.

Case Title: KUNJAN SADANA Vs. MAHESH KUMAR

Case Number: C.A. No.-009312-009312 / 2019

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