K.R.Madhusudan & Ors vs Administrative Officer & Anr

Sri. K.R. Madhusudhan & Ors. ...Appellant(s)

Versus

The Administrative Officer & Anr. ...Respondent(s)

J U D G M E N T

GANGULY, J.

1. Delay condoned.

2. Leave granted.

3. On 4.10.1998, at about 8.55 a.m., V.

Rajagopalaiah was crossing the road near Ashraya

Hotel, B.M. Road, Channapatna, when a Maruti Van

(owned by the first respondent) bearing

registration No. KA-05-A-2535 came at a high

speed and dashed against the deceased, causing

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severe injuries. He was taken to hospital, but

he succumbed to his injuries.

4. The deceased was of 53 years of age and was

survived by his wife and three sons, the present

appellants. They filed a claim petition under

Section 166 of the Motor Vehicles Act, 1988

claiming Rs.20,00,000/- as compensation. It was

contested by the respondents.

5. Motor Accident Claims Tribunal (hereinafter

"MACT") found that the death of V. Rajagopalaiah

was due to the rash and negligent driving of the

van driver (the second respondent). The deceased

was working as Senior Assistant in Karnataka

Electricity Board (hereinafter "KEB") and his

last drawn gross monthly salary was Rs.15,642/-

i.e. Rs.1,87,704/- annually. 1/3rd was deducted

for personal expenses, after which the amount

came to Rs.1,25,136/-. As deceased was 53 years

of age, a multiplier of 11 was applied. The

Tribunal also awarded funeral and transport

expenses amounting to Rs.10,000/-, medical

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expenses prior to death was Rs.6,000 and

compensation for loss and affection at

Rs.25,000/-. Accordingly, total compensation

awarded was Rs.14,27,496/- along with interest

of 9% p.a.

6. The appellants and the respondents both appealed

against the award of the Tribunal to the High

Court of Karnataka. The appellants appeared for

enhancement and the respondents for reduction of

the amount awarded. The High Court, in its

impugned judgment, reduced the compensation

awarded by the Tribunal to the appellants to

Rs.11,82,000/-. The relevant portion of High

Court order reads as follows:

"The deceased was working as Senior

Assistant in KEB getting a salary of

Rs.15,642/-. After effecting

deductions towards income tax, the net

salary of the deceased would be

Rs.14,000/-. The mother and sons of

the deceased have filed claim

petition. 1/5 is to be deducted

towards personal expenses. Rs.11,200/-

would enure to the benefit of the

dependants. The deceased was aged

about 52 years. The deceased would

have retired by 58 years. After

superannuation, the deceased would get

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pensionary income in a sum of

Rs.6000/-. 1/5 is to be deducted

towards personal expenses. Rs.4800/-

would enure to the benefit of the

dependants. Split multiplier would

apply. After superannuation,

multiplier 6 would apply. Therefore,

the total loss of dependency before

superannuation would be Rs.8,06,400/-

(Rs.11200 (income) X 12 (months) X 6

(multiplier). The total loss of

dependency from the pensionary income

would be Rs.3,45,600/- (Rs.4800/-

(income) X 12 (months) X 6

(multiplier). The total loss of

dependency would be Rs.11,52,000/- The

petitioners are entitled for a sum of

Rs.25,000/- towards loss of expectancy

and Rs.10,000/- towards funeral

expenses. In all the petitioners are

entitled for a total sum of

Rs.11,82,000/- as against

Rs.14,27,496/- awarded by the

Tribunal. The petitioners are entitled

for interest at 6% p.a."

7. Assailing the same, the appellants contend that

the future prospects of the deceased and

revision in salary were not taken into

consideration by the High Court and a split

multiplier should not have been adopted.

8. The law regarding addition in income for future

prospects has been clearly laid down in Sarla

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Varma (Smt.) & Others v. Delhi Transport

Corporation & Another [(2009) 6 SCC 121] and the

relevant portion reads as follows:

"In Susamma Thomas this Court

increased the income by nearly 100%,

in Sarla Dixit the income was

increased only by 50% and in Abati

Bezbaruah the income was increased by

a mere 7%. In view of the

imponderables and uncertainties, we

are in favour of adopting as a rule of

thumb, an addition of 50% of actual

salary to the actual salary income of

the deceased towards future prospects,

where the deceased had a permanent job

and was below 40 years. [Where the

annual income is in the taxable range,

the words "actual salary" should be

read as "actual salary less tax"]. The

addition should be only 30% if the age

of the deceased was 40 to 50 years.

There should be no addition, where the

age of deceased is more than 50 years.

Though the evidence may indicate a

different percentage of increase, it

is necessary to standardize the

addition to avoid different yardsticks

being applied or different methods of

calculation being adopted. Where the

deceased was self-employed or was on a

fixed salary (without provision for

annual increments etc.), the courts

will usually take only the actual

income at the time of death. A

departure therefrom should be made

only in rare and exceptional cases

involving special circumstances."

5 9. In the Sarla Verma (supra) judgment the Court

has held that there should be no addition to

income for future prospects where the age of the

deceased is more than 50 years. The learned

Bench called it a rule of thumb and it was

developed so as to avoid uncertainties in the

outcomes of litigation. However, the Bench held

that a departure can be made in rare and

exceptional cases involving special

circumstances. We are of the opinion that the

rule of thumb evolved in Sarla Verma (supra) is

to be applied to those cases where there was no

concrete evidence on record of definite rise in

income due to future prospects. Obviously, the

said rule was based on assumption and to avoid

uncertainties and inconsistencies in the

interpretation of different courts, and to

overcome the same.

10. The present case stands on different factual

basis where there is clear and incontrovertible

evidence on record that the deceased was

entitled and in fact bound to get a rise in

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income in the future, a fact which was

corroborated by evidence on record. Thus, we are

of the view that the present case comes within

the `exceptional circumstances' and not within

the purview of rule of thumb laid down by the

Sarla Verma (supra) judgment. Hence, even though

the deceased was above 50 years of age, he shall

be entitled to increase in income due to future

prospects.

11. We base our conclusion on our findings from the

records of the case. The evidence of PW.1, the

son of the deceased, is that there are four

claimants, three of them are the sons of the

deceased and the other claimant is paternal

grand-mother. Therein, he stated that the

deceased was the only bread earner of the

family. It was stated by PW.1 that if his

father, the deceased, would have been alive he

could have got promotion and could have received

the salary of Rs.20,000/- per month.

7 12. PW.3, who was the Senior Assistant in KEB, in

his evidence also stated that the deceased was

52 years of age at the time of his death and he

was having six years of service left. The annual

increment is Rs.350/-. In the year 2003 (which

would have been year of retirement), the basic

pay of the deceased would have been around

Rs.16,000/- and in all he would have obtained

gross salary of Rs.20,000/- per month. PW.3

deposed that as per the Board Agreement for

every five years their pay revision is

compulsory. Both the witnesses were cross-

examined before the Tribunal but the evidence

leading to pay revision was not assailed.

13. Therefore, the consistent evidence before the

Tribunal was that if the deceased would have

been alive he would have reached the gross

salary of Rs.20,000/- per month.

14. In view of this evidence the Tribunal should

have considered the prospect of future income

while computing compensation but the Tribunal

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has not done that. 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

therefore. 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 II Column in the II

Schedule in 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

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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.

16. The income of the deceased will be taken to be

Rs.20,000/- p.m. which amounts to Rs.2,40,000/-

p.a. After deduction of 1/3rd amount for personal

expenses, the loss of notional income will be

Rs.1,60,000/-. The multiplier of 11 will be

applied, from which the loss of dependency will

amount to Rs.17,60,000/-. We also award

Rs.10,000/- for funeral and transport expenses,

Rs.6,000/- for medical expenses prior to death

and Rs.25,000/- for loss of love and affection.

Thus, the total compensation awarded amounts to

Rs.18,01,000/- which we round off to

Rs.18,00,000/-.

17. The amount of compensation would thus be

Rs.18,00,000/- with the rate of interest as

granted by the Tribunal. The amount is to be

deposited with the Tribunal within six weeks

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from date after deducting any amount, if already

deposited.

18. The appeals are, thus, allowed. No costs.

.....................J.

(G.S. SINGHVI)

.....................J.

(ASOK KUMAR GANGULY)

New Delhi

February 18, 2011

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