M/S. ROYAL SUNDARAM ALLIANCE INSURANCE COMPANY LTD. … APPELLANT VS. MANDALA YADAGARI GOUD & ORS. … RESPONDENTS

whether the age of the a bachelor deceased or the age of the dependents would be taken into account for calculating the multiplier in the case of a motor accident  claims ?  .

the insurance company, whose counsel submits that it is the age of the dependents which has to be taken into account and thus the High Court has fallen into an error by taking the multiplier

on the basis of the age of the deceased.

To support his contention, learned counsel, for reference purposes, filed two compilations of judgments one against him and one in his favour. We put a specific query to the learned counsel as to whether there are any three Judge Bench decisions dealing with the issue, as there was no purpose in looking at multiplicity of judgments, and what  was the last view adopted by this Court in this behalf.

Learned counsel conceded that a three Judge bench of this Court in Sube Singh & Anr. Vs. Shaym Singh (Dead) & Ors.1, looked into this issue and has opined that it is the age of the deceased which should be the basis of the multiplier. 

However, his contention is that a reading of this judgment would show that reliance has been placed on the earlier judgment in Munna Lal Jain & Anr. Vs. Vipin Kumar Sharma & Ors.2, to come to this conclusion. Munna Lal Jain (supra) in turn relied upon the judgment in Sarla Verma (Smt.) & Ors. Vs. Delhi Transport Corporation & Anr. which view is stated to have been affirmed by the Constitution Bench in National Insurance Company Ltd. Vs. Pranay Sethi & Ors.4 

It was submitted that a sequential error has taken place as Sarla Verma (supra) did not deal

with the case of a deceased bachelor and thus, the imprimatur given in Pranay Sethi case could be of no avail.

Thus, a mere affirmation of the views in Sube Singh (supra) also does not settle this legal position. On the other hand, there are two Judge Bench judgments taking a contra view that the age of the dependents is what has to be the basis for multiplier and not the age of the deceased in the case of death of a bachelor

He also made a reference to one order of a three Judge Bench in New India Assurance

Company Ltd. Vs. Shanti Pathak (Smt.) & Ors. but that one is indisputably an adjudication on given facts.

The concept of insurance for a motor vehicle is to cover risk in case of an accident. The insurance policy covers personal risk of injury or death, including for third parties. The premium charged in this behalf is uniform.

The judicial pronouncements of this Court have endeavoured to devise a standard formula, so far as

possible, in respect of the calculation of the amount of compensation qua various components. 

The amount of compensation determined is to be paid to the claimants who are dependents in case of a death of a person based on what the deceased would have contributed to their support. 

The amount thus received by the dependents in turn becomes a part of the estate as they may live longer or may be younger than the age limits taken into account for calculation of a

multiplier to be applied in such a situation. 

In the context of liability to pay compensation on the principle of no fault, as enunciated under Section 140 of the Motor Vehicles Act, 1988, thus, it was observed by this Court that

even if there is no loss of dependency, the quantification cannot be below that amount and to that extent the amount would form a part of the estate of the deceased

The focus for determination of such claim is the deceased and what would be his contribution towards the dependents would he to be alive, for the benefits of the dependents. 

It is trite to say, and in fact conceded by the learned counsel for the insurance company, that in case the deceased is a married person, it is the age of the deceased which is to be taken into account. The question is whether in case the deceased is a bachelor, a different principle for calculation of the multiplier should be applied by shifting the focus to the age of the claimants? 

We are of the view that the answer to this question should be in the negative.

We may also note the importance of applying uniform settled principle to such cases. Certainty of law is important. Once the law is settled, it should not be repeatedly changed as that itself causes confusion and litigation. It is with this objection that this Court has endeavoured to settle legal principles in respect of the matter in question.

A reading of the judgment in Sube Singh (supra) shows that where a three Judge Bench has categorically taken the view that it is the age of the deceased and not the age of

the parents that would be the factor for the purposes of taking the multiplier to be applied. 

This judgment undoubtedly relied upon the case of Munna Lal Jain (supra) which is also a three Judge Bench judgment in this behalf.

The relevant portion of the judgment has also been extracted. Once again the extracted portion in turn refers to the judgment of a three Judge Bench in Reshma Kumari & Ors. Vs. Madan Mohan & Anr.

The relevant portion of

Reshma Kumari in turn has referred to Sarla Verma (supra)

case and given its imprimatur to the same. The loss of

dependency is thus stated to be based on : (i)

additions/deductions to be made for arriving at the income;

(ii) the deductions to be made towards the personal living

expenses of the deceased; and (iii) the multiplier to be

applied with reference to the age of the deceased. It is

the third aspect which is of significance and Reshma Kumari

categorically states that it does not want to revisit the

law settled in Sarla Verma case in this behalf.

Not only this, the subsequent judgment of the Constitution bench in Pranay Sethi (supra) has also been referred to in Sube Singh for the purpose of calculation of the multiplier.

We are convinced that there is no need to once again take up this issue settled by the aforesaid judgments of three Judge Bench and also relying upon the Constitution Bench that it is the age of the deceased which has to be taken into account and not the age of the dependents.

1
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.6600 OF 2015
M/S. ROYAL SUNDARAM ALLIANCE
INSURANCE COMPANY LTD. … APPELLANT
VS.
MANDALA YADAGARI GOUD & ORS. … RESPONDENTS
WITH
C.A.No. 1954/2019 @ SLP(C)NO.5603/2019 @ CC No. 11685/2016,
C.A.NO.178/2017 &
C.A.No.1953/2019 @ SLP(C)NO.19797/2015
J U D G M E N T
Sanjay Kishan Kaul, J.
C.A.No.6600/2015 & C.A. NO. 1954/ 2019 @ SLP(C) 5603/2019 @ CC
No.11685/2016

  1. The only legal issue canvassed before us in these
    matters, which are in the nature of cross appeals, is that
    in the case of a motor accident where there is death of a
    person, who is a bachelor, whether the age of the deceased
    or the age of the dependents would be taken into account for
    calculating the multiplier.
    2
  2. The appellant in C.A.No.6600/2015 is the insurance
    company, whose counsel submits that it is the age of the
    dependents which has to be taken into account and thus the
    High Court has fallen into an error by taking the multiplier
    on the basis of the age of the deceased.
  3. To support his contention, learned counsel, for
    reference purposes, filed two compilations of judgments one
    against him and one in his favour. We put a specific query
    to the learned counsel as to whether there are any three
    Judge Bench decisions dealing with the issue, as there was
    no purpose in looking at multiplicity of judgments, and what
    was the last view adopted by this Court in this behalf.
  4. Learned counsel conceded that a three Judge bench of
    this Court in Sube Singh & Anr. Vs. Shaym Singh (Dead) &
    Ors.1, looked into this issue and has opined that it is the
    age of the deceased which should be the basis of the
    multiplier. However, his contention is that a reading of
    this judgment would show that reliance has been placed on
    the earlier judgment in Munna Lal Jain & Anr. Vs. Vipin
    Kumar Sharma & Ors.2, to come to this conclusion. Munna Lal
    Jain (supra) in turn relied upon the judgment in Sarla
    Verma (Smt.) & Ors. Vs. Delhi Transport Corporation & Anr.
    3,
    which view is stated to have been affirmed by the
    1 (2018) 3 SCC 18
    2 (2015) 6 SCC 347
    3 (2009) 6 SCC 121
    3
    Constitution Bench in National Insurance Company Ltd. Vs.
    Pranay Sethi & Ors.4 It was submitted that a sequential
    error has taken place as Sarla Verma (supra) did not deal
    with the case of a deceased bachelor and thus, the
    imprimatur given in Pranay Sethi case could be of no avail.
    Thus, a mere affirmation of the views in Sube Singh (supra)
    also does not settle this legal position. On the other
    hand, there are two Judge Bench judgments taking a contra
    view that the age of the dependents is what has to be the
    basis for multiplier and not the age of the deceased in the
    case of death of a bachelor. He also made a reference to
    one order of a three Judge Bench in New India Assurance
    Company Ltd. Vs. Shanti Pathak (Smt.) & Ors.
    5, but that one
    is indisputably an adjudication on given facts.
  5. Insofar as the appeal filed by the claimants are
    concerned, it is not in dispute that 50% has been granted
    for future prospects, and that is the only aspect before us
    seeking an enhancement of the same. In this behalf it is
    pointed out to us that actually 40% ought to have been
    awarded in terms of Pranay Sethi case (supra).
  6. We have given our thoughtful consideration to the
    matters in issue.
    4 (2017) 16 SCC 680
    5 (2007) 10 SCC 1
    4
  7. The concept of insurance for a motor vehicle is to
    cover risk in case of an accident. The insurance policy
    covers personal risk of injury or death, including for
    third parties. The premium charged in this behalf is
    uniform.
  8. The judicial pronouncements of this Court have
    endeavoured to devise a standard formula, so far as
    possible, in respect of the calculation of the amount of
    compensation qua various components. The amount of
    compensation determined is to be paid to the claimants who
    are dependents in case of a death of a person based on what
    the deceased would have contributed to their support. The
    amount thus received by the dependents in turn becomes a
    part of the estate as they may live longer or may be younger
    than the age limits taken into account for calculation of a
    multiplier to be applied in such a situation. In the
    context of liability to pay compensation on the principle of
    no fault, as enunciated under Section 140 of the Motor
    Vehicles Act, 1988, thus, it was observed by this Court that
    even if there is no loss of dependency, the quantification
    cannot be below that amount and to that extent the amount
    would form a part of the estate of the deceased6.
  9. The focus for determination of such claim is the
    deceased and what would be his contribution towards the
    6 See Manjuri Bera (Smt) v. Oriental Insurance Company Ltd. And Anr., (2007) 10 SCC 643
    5
    dependents would he to be alive, for the benefits of the
    dependents. It is trite to say, and in fact conceded by the
    learned counsel for the insurance company, that in case the
    deceased is a married person, it is the age of the deceased
    which is to be taken into account. The question is whether
    in case the deceased is a bachelor, a different principle
    for calculation of the multiplier should be applied by
    shifting the focus to the age of the claimants? We are of
    the view that the answer to this question should be in the
    negative.
  10. We may also note the importance of applying uniform
    settled principle to such cases. Certainty of law is
    important. Once the law is settled, it should not be
    repeatedly changed as that itself causes confusion and
    litigation. It is with this objection that this Court has
    endeavoured to settle legal principles in respect of the
    matter in question.
  11. A reading of the judgment in Sube Singh (supra) shows
    that where a three Judge Bench has categorically taken the
    view that it is the age of the deceased and not the age of
    the parents that would be the factor for the purposes of
    taking the multiplier to be applied. This judgment
    undoubtedly relied upon the case of Munna Lal Jain (supra)
    which is also a three Judge Bench judgment in this behalf.
    6
    The relevant portion of the judgment has also been
    extracted. Once again the extracted portion in turn refers
    to the judgment of a three Judge Bench in Reshma Kumari &
    Ors. Vs. Madan Mohan & Anr.
  12. The relevant portion of
    Reshma Kumari in turn has referred to Sarla Verma (supra)
    case and given its imprimatur to the same. The loss of
    dependency is thus stated to be based on : (i)
    additions/deductions to be made for arriving at the income;
    (ii) the deductions to be made towards the personal living
    expenses of the deceased; and (iii) the multiplier to be
    applied with reference to the age of the deceased. It is
    the third aspect which is of significance and Reshma Kumari
    categorically states that it does not want to revisit the
    law settled in Sarla Verma case in this behalf.
  13. Not only this, the subsequent judgment of the
    Constitution bench in Pranay Sethi (supra) has also been
    referred to in Sube Singh for the purpose of calculation of
    the multiplier.
  14. We are convinced that there is no need to once again
    take up this issue settled by the aforesaid judgments of
    three Judge Bench and also relying upon the Constitution
    Bench that it is the age of the deceased which has to be
    taken into account and not the age of the dependents.
    7 (2013) 9 SCC 65
    7
  15. The aforesaid being the only issue which has been
    raised by the insurance company, we find the appeal filed by
    the insurance company without merit.
  16. We have already noticed that insofar as the claimants
    are concerned, they have already been granted more than a
    reasonable amount for future prospects and on that account
    also no interference is called for in the impugned judgment.
  17. The result is that both the appeals are dismissed
    leaving the parties to bear their own costs. Pending
    application, if any, stands disposed of.
    C.A.No.1953/2019 @ SLP(C)NO.19797/2015 :
  18. In view of the judgment delivered today in Civil Appeal
    No.6600/2015 titled as M/s. Royal Sundaram Alliance
    Insurance Company Ltd. Vs. Mandala Yadagari Gold & Ors.,
    opining that it is the age of the deceased and not such of
    the dependents in case of the death of a bachelor which is
    to be the basis for the multiplier, this appeal is also
    liable to be dismissed as this is the only plea urged.
    Pending application, if any, stands disposed of.
    8
    C.A.No.178/2017
  19. In view of the judgment delivered today in Civil Appeal
    No.6600/2015 titled as M/s. Royal Sundaram Alliance
    Insurance Company Ltd. Vs. Mandala Yadagari Gold & Ors., the
    multiplier in the present case will be 16, and not as per
    the impugned order, based on the age of the deceased. The
    amount now payable in view thereof would be as under :
    Sl.No. Particulars MACT High Court Payable
  20. Salary Rs.7242/- Rs.7242/- Rs.7242/-
  21. Annual
    Income
    86,904 (7242×12) 86,904 (7242×12) 86,904 (7242×12)
  22. Add Future
    Prospects
    Nil Nil 50% = 1,30,356/-
  23. Less : 1/3 50% 50% = 65,178
  24. Multiplier 8
    (on the basis of
    average age of the
    parents = 57 1/2
    years
    11
    (Average age of
    parents 54 & 53
    years)
    16
    (Age of the
    deceased)
    (65,178X16 =
    10,42,848)
  25. Loss of
    companionship
    2000/- 2000/- 30,000/-
  26. Total 4,65,488/- 4,79,972/- 10,72,848/-
  27. Difference Nil Nil 5,92,876/-
  28. Interest 9% 9% 9%
  29. We may note that learned counsel appearing for the
    respondent also sought to canvas that the only change being
    on account of the multiplier, that plea was not even raised
    in the appeal. We, however, find that ground (4) of the
    special leave petition is wide enough to cover that issue.
    The appeal is thus allowed to the aforesaid extent.
    9
    Pending application, if any, stands disposed of.
    ………………………J.
    [S.A. BOBDE]
    ………………………J.
    [SANJAY KISHAN KAUL]
    ………………………J.
    [MOHAN M. SHANTANAGOUDAR]
    New Delhi;
    April 09, 2019.