Motor Accident Case- corporate laws- insurance laws- Not considered future prospects – reduce the award of interest from 9% p.a. to 6% p.a.=In view of the decision of the Constitution Bench in Pranay Sethi (supra), an addition of 25% is warranted, on account of future prospects having regard to the age of the deceased. The total income, after accounting for future prospects at 25% would work out to Rs 1,14,000 per annum. An amount of one fourth would have to be reduced on account of personal expenses. The net income would work out to Rs 85,500. Applying a multiplier of 14 the total compensation would work out to Rs 11,97,000. Adding a further amount of Rs 70,000 under conventional heads as stipulated in the judgment 1 (2017) 13 SCALE 12 4 in Pranay Sethi (supra), the total compensation payable would work out to Rs 12,67,000. We find no reason or justification for the High Court to reduce the award of interest to 6% p.a.. The rate of interest of 9% p.a. fixed by the Tribunal is restored.

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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO 2697 OF 2018

(Arising out of SLP(C)No 2927 of 2017)

BHARTIBEN NAYABHA KER AND ORS ..Appellants

VERSUS

SIDABHA PETHABHA MANKE AND ORS ..Respondents

J U D G M E N T

Dr D Y CHANDRACHUD, J

1 The present appeal arises from a judgment of a learned Single Judge

dated 15 March 2016, in a first appeal from the decision of the Motor Accident

Claims Tribunal (MACT), Jamnagar.

2 The appellants are heirs and legal representatives of Nayabha Mapbha

Ker who died as a result of a motor accident on 18 July 1993. He was travelling

in a jeep bearing Registration No GBI-7896 which was being driven by the

fourth respondent towards Mithapur. At about 3.00 am the first respondent who

REPORTABLE

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was driving a truck bearing Registration No.GJ-10-T-747, came from the

opposite direction and dashed against the jeep. Nayabha was seriously injured

and died during the course of the accident. His heirs filed a claim petition under

Section 166 of the Motor Vehicles Act, 1988 before the MACT, Jamnagar

seeking compensation in the amount of Rs 13 lakhs. By its award dated 19

July 1999 the Tribunal allowed the claim in the amount of Rs 7,78,000 together

with interest at the rate of 12 % per annum. The appellants filed a first appeal

before the High Court of Gujarat. The High Court, by its impugned judgment,

allowed an additional amount of Rs 33,000 under the head of loss of life,

expenses and consortium but reduced the rate of interest from 12 % p.a. to 9%

p.a. Aggrieved by the judgment of the High Court, the claimants are in appeal.

3 The deceased was 41 years old at the time of the accident. He had

acquired a B.A. and B.Ed. qualification. For seven years, he had served as

President of the Taluka Panchayat. The deceased owned agricultural land. The

Tribunal assessed the annual income of the deceased at Rs.81,000 comprised

of his agricultural income and income from other sources. Applying a multiplier

of 12, the Tribunal computed an amount of Rs. 7.56 lakhs towards the loss of

dependency. A total amount of Rs 7.78 lakhs was awarded inclusive of

conventional heads. In appeal, the High Court came to the conclusion that the

total income would work out to Rs 92,000 out of which one fourth would be

deducted for personal expenses. Applying a multiplier of 14, the High Court

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awarded an additional amount of Rs 33,000. However, the rate of interest has

been reduced to 9% per annum.

4 Basically two submissions have been urged on behalf of the appellants.

First, it has been urged that the High Court did not allow for future prospects for

which provision has to be made in view of the law settled by a Constitution

Bench of this Court in National Insurance Company Limited v Pranay Sethi1

.

Second, it has been urged that there was no justification for the High Court to

reduce the award of interest from 9% p.a. to 6% p.a.

5 The High Court has computed the total income of the deceased at Rs

91,800 (Rs 55,000 being the income from agriculture and Rs 36,800 being the

income from salary). In view of the decision of the Constitution Bench in Pranay

Sethi (supra), an addition of 25% is warranted, on account of future prospects

having regard to the age of the deceased. The total income, after accounting

for future prospects at 25% would work out to Rs 1,14,000 per annum. An

amount of one fourth would have to be reduced on account of personal

expenses. The net income would work out to Rs 85,500. Applying a multiplier

of 14 the total compensation would work out to Rs 11,97,000. Adding a further

amount of Rs 70,000 under conventional heads as stipulated in the judgment

 

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(2017) 13 SCALE 12

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in Pranay Sethi (supra), the total compensation payable would work out to Rs

12,67,000.

6 We find no reason or justification for the High Court to reduce the award

of interest to 6% p.a.. The rate of interest of 9% p.a. fixed by the Tribunal is

restored.

7 The appeal is accordingly allowed by directing that the quantum of

compensation shall stand enhanced to Rs 12,67,000 on which interest shall be

payable at 9% p.a. from the date of the claim petition. There shall be no order

as to costs.

…………………………………….CJI

[DIPAK MISRA]

…………………………………….J

[A M KHANWILKAR]

…………………………………….J

[Dr D Y CHANDRACHUD]

New Delhi;

April 05, 2018