REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.   3317-3318                    OF 2009 (Arising out of SLP (C) Nos.27792-27793 of 2008)

Raj Rani & Ors. … Appellants

Versus

Oriental Insurance Co. Ltd. & Ors. … Respondents

J U D G M E N T

S.B. Sinha, J.

1. Leave granted.

2. Claimants before the Motor Vehicles Accident Claims Tribunal (for  

short,  ‘the  Tribunal’)  are  before  us  aggrieved  by  and dissatisfied  with  a  

judgment  and  order  dated  10.6.2008  passed  by  the  High  Court  of  

Uttarakhand at Nainital in AFO No.101 of 2006 and AFO No.107 of 2006.

3. The  deceased  Diwan  Pal  Singh  was  driving  a  Maruti  car  bearing  

registration  No.UHP-4787  belonging  to  one  Gopal  Sharan  Paliwal  from

Bareilly  to  Haldwani.   He  was  an  Assistant  Engineer  working  in  Uttar  

Pradesh  Avas  Evam  Vikas  Praishad,  a  statutory  organisation.   He  was  

accompanied by one T.K. Pandey, one of his colleagues.

4. Allegedly, a truck bearing registration No. UP 25-6235 was parked in  

middle of the road.  It did not put on the lights.  Claimants contend that  

although the car was being driven at a nominal speed of 40 km per hour,  

owing to another  vehicle coming from the other  side and as the parking  

lights of the tuck being not on, it was sighted at the last minute.  Deceased  

tried to take the car towards left side but it dashed against the truck resulting  

in the death of Diwan Pal Singh.  A sum of Rs.50,50,000/- was claimed,  

inter  alia,  on  the  premise  that  his  monthly  income  was  Rs.17,431/-  per  

month and he was aged only 42 years.   

5. The claim petition was filed by his children as also his parents, Shri  

Chandra Singh pal and Smt. Chandra Devi.  Shri  Chandra Singh Pal has  

since expired.  Before the Tribunal, one of the appellants was examined who  

stated that the salary of the deceased was about 17,400/- per month and he  

was  going  to  be  promoted  to  the  post  of  Executive  Engineer.   It  was  

furthermore stated that his wife had not received any family pension.  T.K.  

Pandey, who was accompanying the deceased in the said car was examined  

as PW2.  He, in his deposition, stated :

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“This  accident  occurred  due  to  negligence  of  Truck Driver.  Diwan Pal  Singh was going to be  promoted  on  the  post  of  Executive  Engineer,  if  promotion  would  have  taken  place  then  would  have received salary of Rs.25,000/- per month.”

6. He was not cross-examined on the question with regard to the income  

of the deceased as also the fact that he would have been promoted to the post  

of Executive Engineer very soon.   

The learned Tribunal was of the opinion that there was a contributory  

negligence  on  the  part  of  the  deceased  also.   As regards  the  amount  of  

compensation, it  took into consideration the net salary at Rs.11,625/- and  

dearness  allowance  at  Rs.4,766/-  totaling  Rs.16,391/-.   It  applied  the  

multiplier  of  15  on  the  basis  whereof  the  amount  of  loss  of  subsistence  

worked out to be Rs.29,50,380/-.  Out of the said amount 1/3rd was deducted  

towards  personal  expenses  of  the  deceased.   A further  1/3rd amount was  

deducted on premise that compensation was being paid in lump sum.   

7. Both, the Insurance Company as also the appellants, preferred appeals  

thereagainst.  The High Court, by reason of the impugned judgment, opined  

that  both  the  drivers  of  the  car  as  also  the  driver  of  the  truck  having  

contributed to the accident, the extent of contributory negligence should be  

calculated at 50% each.   

With regard to the amount of compensation, it was held :

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“It has come on record that both the vehicles were  insured with Oriental Insurance Company Limited.  The  Tribunal  has  given  a  finding  that  Oriental  Insurance Company Ltd. is liable to pay the total  amount  of  compensation  shared  by  both  the  vehicles involved in the accident.  This finding of  the Tribunal is  perverse as the deceased was the  owner  of  the  offending  car  and  he  himself  was  driving the car at the time of accident, therefore, he  cannot  be  termed  as  third  party  and  hence  the  claimants cannot be compensated for the death of  the deceased by the insurer.  Further, the claimants  cannot  get  the  compensation  upto  the  extent  of  50% each out of total amount of compensation on  account  of  rash  and  negligence  on  the  part  of  deceased/driver of Maruti car.  Thus, the claimants  are  entitled  to  get  50% of  the  entire  amount  of  compensation  i.e.  Rs.6,55,640/-  plus  Rs.2000/-  towards  funeral  expenses  and  Rs.5000/-  towards  loss of love and affection = Rs.6,62,640/- (rounded  Rs.6,63,000/-).   The conditional  interest  imposed  by the Tribunal is also liable to be set aside and I  am of the view that the amount of compensation  awarded  by  this  Court  in  the  Appeal  i.e.  Rs.6,63,000/-  shall  be paid by the  insurer  of  the  offending Truck along with interest  @ 7.5% per  annum  with  effect  from  the  date  of  filing  the  petition till the date of actual payment instead of  conditional interest imposed by the Tribunal in the  impugned judgment and award.”

So  far  as  the  appeal  preferred  by  the  claimants-appellants  is  

concerned, it was merely stated :

“As far as AO No.101 of 2006 filed by claimants  is  concerned,  learned  counsel  for  the  claimants- appellants  has  raised  the  argument  that  the  Tribunal  has  awarded  a  meager  amount  and  the  same  should  be  enhanced.   He  has  further  

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submitted  that  the  amount  of  compensation  has  been awarded by the Tribunal on take home salary,  while it should have been awarded on gross salary.  He  has  also  submitted  that  the  Tribunal  has  awarded  conditional  interest  whereas  the  interest  should  be  awarded  from  the  date  of  filing  the  petition.”

8. Mr.  Ashwani  Gard,  learned  counsel  appearing  on  behalf  of  the  

appellant, would urge :

1) The High Court committed a serious error in deducting the amount of  

1/3rd twice over.

2) The Tribunal  as  also  the  High Court  committed  a  serious  error  in  

opining that the deceased Diwan Pal Singh was driving the vehicle  

negligently or the extent of his contributory negligence was 50%.

3) In computing the amount of compensation, all allowances payable to  

the deceased should have also been taken into consideration.

4) The  Tribunal  as  also  the  High  Court  should  have  taken  into  

consideration, the future prospects of the deceased as well.

9. Mr.  Atul  Nanda,  learned  counsel  appearing  on  behalf  of  the  

respondent, on the other hand, would contend :

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i) Appellant  having  not  made  any  submission  before  the  High Court  

with regard to the contributory negligence or future prospects of the  

deceased, this Court should not interfere with the impugned judgment.

ii) The question as regards contributory negligence being essentially a  

question of fact, the same does not warrant any interference by this  

Court.

iii) In  any  event,  if  the  multiplier  indicated  in  the  Second  Schedule  

appended to the Motor Vehicles Act, 1988 is applied, the question of  

consideration  of  payment  of  any  higher  amount  on  the  basis  of  a  

future prospect would not arise.

10. The fact that the deceased was getting a salary of Rs.17,431/- is not in  

dispute.   Apart  from  the  dearness  allowance,  if  other  allowances  were  

payable which were beneficial to the entire family, the same should have  

been taken into consideration for the purpose of computation of the annual  

income.   It  was  so  held  in  National  Insurance  Company  Ltd.  v.  Indira  

Srivastava & Ors. [(2008) 2 SCC 763].

11. The  deceased  was  aged about  42  years.   If  the  depositions  of  the  

witnesses examined on behalf of the claimants were to be believed and we  

see no reason as to why they should not be, his future prospect also could  

not have been ignored for the purpose of determining the annual income.  

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For the said purpose, immediate future prospect would be a relevant factor.  

It is possible in a given case, where the chance of promotion is remote or the  

deceased was at the end of his carrier, his future prospect would be kept out  

of  consideration.   But,  evidently,  he  was  to  be  promoted  to  the  post  of  

Executive Engineer.  If he was to be so promoted, his income would have  

been  around  25,000/-   The  said  factor,  therefore,  was  required  to  be  

considered.   [See  General  Manager,  Kerala  State  Road  Transport  

Corporation, Trivendrum v. Susamma Thomas (Mrs.) & Ors. [(1994) 2 SCC  

186] and Smt. Sarla Dixit & Anr. v. Balwant Yadav & Ors. [(1996) 3 SCC  

179].

12. Mr.  Nanda may be  correct  to  some extent  that  for  the  purpose  of  

computation of the total amount of compensation under Section 163A of the  

Motor Vehicles Act, the future prospect may not be of much relevance.  But  

in a case where claim petition has been filed in terms of Section 166 of the  

Act, the same would, in our opinion, be a relevant factor.   Mr. Nanda may  

also be correct that this aspect of the matter has not been considered by the  

High Court.  However, keeping in view the fact that such a contention had  

all  along  been  raised  by  the  claimants  even  before  the  Tribunal  and  

evidences have not  been adduced in respect  thereof  on their  behalf,  it  is  

difficult to ignore the said contention of the appellants.   

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13. It is not necessary in a proceeding under the Motor Vehicles Act to go  

by any rules of pleadings or evidence.  Section 166 of the Act speaks about  

grant  of  just  compensation.   The  court’s  duty  being  to  award  just  

compensation, it will try to arrive at the said finding irrespective of the fact  

as to whether any plea in that behalf was raised by the claimant or not.

In  Nagappa v.  Gurudayal  Singh  & Ors. [(2003)  2  SCC 274],  this  

Court has held as under :

“7. Firstly, under the provisions of Motor Vehicles  Act,  1988,  (hereinafter  referred  to  as  "the  MV  Act")  there  is  no  restriction  that  compensation  could be awarded only up to the amount claimed  by the claimant. In an appropriate case where from  the evidence brought on record if  Tribunal  court  considers  that  claimant  is  entitled  to  get  more  compensation than claimed, the Tribunal may pass  such award.  Only embargo is--it  should be 'Just'  compensation, that is to say, it  should be neither  arbitrary,  fanciful  nor  unjustifiable  from  the  evidence.  This would be clear by reference to the  relevant provisions of the M.V. Act. Section 166  provides  that  an  application  for  compensation  arising out of an accident involving the death of, or  bodily injury to, persons arising out of the use of  motor  vehicles,  or  damages to any property of a  third party so arising, or both, could be made  (a)  by the person who has sustained the injury; or (b)  by the owner of the property; or  (c) where death  has resulted from the accident, by all or any of the  legal representatives of the deceased: or (d) by any  agent duly authorised by the person injured or all  or any of the legal representatives of the deceased,  as  the  case  may  be.  Under  the  proviso  to  Sub- section  (1),  all  the  legal  representatives  of  the  

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deceased who have not joined as the claimants are  to be impleaded as respondents to the application  for compensation. Other important part of the said  Section is Sub-section (4) which provides that "the  Claims Tribunal shall treat any report of accidents  forwarded to it  under  Sub-section  (6)  of  Section  158 as an application for compensation under this  Act." Hence, Claims Tribunal in appropriate case  can  treat  the  report  forwarded  to  it  as  an  application for compensation even though no such  claim is made or no specified amount is claimed.”

14. The deceased died at a very young age.  He being highly qualified  

could have been promoted to higher posts.  Although the multiplier specified  

in the Second Schedule appended to the Motor Vehicles Act are stricto sensu  

not  applicable in a case under Section 166 of  the Act,  it  is  not  of  much  

dispute  that  wherever  the  court  has  to  apply  the  appropriate  multiplier  

having regard to several factors in mind, one of them would be the factor of  

a high income of the deceased.  The family background as also the income  

of the family would also be a relevant factor.  

15. The  deceased,  apart  from his  wife  and  children  who were  five  in  

number, had to maintain the parents also.  His father’s age at the time of  

filing the claim application was 70 years.  He expired during pendency of  

the  proceeding.   While  making  an  endeavour  to  find  the  appropriate  

multiplier, one of the factors which may have to be borne in mind although  

not  wholly relevant  as to whether  the other members  of the family  were  

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having  independent  income.   There  is  nothing  to  show that  the  wife  or  

children of the deceased as well as his parents had any independent income  

as on the date of his death.  His family was not getting any family pension.  

We,  therefore,  are of the opinion that  application of  the multiplier  of  15  

cannot be said to be on a very higher side.   

16. So for as the issue of “contributory negligence” is concerned, we may  

notice that the tribunal has deducted 1/3rd from the total compensation on the  

ground that deceased had contributed to the accident. The same, we find, has  

been upheld by the High Court. This court in  Usha Rajkhowa and Ors. v.  

Paramount Industries and Ors. [Civil Appeal No.1088 of 2009 (arising out of  

SLP (C) No.16647 of 2008)] discussed the issue of contributory negligence  

noticing, inter alia, earlier decisions on the same topic. It was held that :

“10.  The  question  of  contributory  negligence  on  the  part  of  the  driver  in  case  of  collision  was  considered  by  this  Court  in  Pramodkumar  Rasikbhai Jhaveri v.  Karmasey Kunvargi Tak and  Ors. reported in (2002) 6 SCC 455. That was also a  case of collusion in between a Car and a truck. It  was observed in Para 8:

‘The  question  of  contributory  negligence  arises  when  there  has  been  some  act  or  omission on the claimant's  part,  which has  materially contributed to the damage caused,  and is of such a nature that it may properly  be  described  as  `negligence'.  Negligence  ordinarily means breach of  a legal  duty to  care,  but  when  used  in  the  expression  

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"contributory negligence", it does not mean  breach of any duty. It only means the failure  by a person to use reasonable care for the  safety of either himself or his property, so  that he becomes blameworthy in part as an  author of his own wrong.”

17. The principle of 50:50 in cases of contributory negligence has been  

discussed  and  applied  in  many  cases  before  this  court.  In  Sri  Krishna  

Vishweshwar Hede v. The General Manager, K.S.R.T.C. (2008 ACJ 1617),  

this court upheld the judgment of the Tribunal assessing the ratio of liability  

at 50:50 in view of the fact that there was contributory negligence on the  

part of the appellant and fixed the responsibility for the accident in the ratio  

of 50:50 on the driver of the bus and the appellant.  In this case, the truck  

was stationary.   Some amount of  negligence on the part  of  the deceased  

cannot be ruled out.

18. Hence  in  the  insistent  case,  we  find  that  there  was  contributory  

negligence on the part  of the deceased and accordingly the claimant was  

entitled to only 50% of the total amount of loss of dependency.

19. The  question  now  arises  for  consideration  is  as  to  whether  the  

Tribunal could have made a further deduction of 1/3rd from the amount of  

compensation on the rationale that the amount is being paid in lump sum.  

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We do not think so.   Few decisions of this  court  may be noticed in this  

regard.

In  National Insurance Co. Ltd. V.  Swarnalatha Das  [1993 Supp.(2)  

SCC 743], it is held :

“This is all the reasoning in the judgment. We are  afraid that the reasoning is incomplete and cannot  by itself support the enhancement. The appropriate  method  of  assessment  of  compensation  is  the  method of capitalisation of net income choosing a  multiplier appropriate to the age of the deceased or  the age of the dependants whichever multiplier is  lower.  It  is,  no  doubt,  true  that  as  a  rough  and  ready measure, the method of aggregating the total  expected  income  for  the  remainder  of  the  life- expectancy  with  appropriate  deductions  towards  uncertainties of life and for lump sum payments is  also resorted to. But this method is now considered  unscientific and is virtually obsolete. At all events  wherever  it  is  resorted to  it  would require  to  be  cross-checked with the  results  of  the  appropriate  and the more scientific method of capitalisation of  the loss of dependency.”

20. The practice of deduction for lump sum payments from the amount of  

compensation awarded in Motor Accident cases by the tribunal have been  

disapproved by this court in several other decisions.  [(See Hardeo Kaur v.  

Rajasthan State Transport Corporation [(1992) 2 SCC 567)];    Renu Bala  

Kalitha v. Dhiren Chakravatty [(1998) 8 SCC 363]; and Urmilla Pandey v.  

Khalil Ahmad [(1994) 4 SCC 207].

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Thus, the High Court as well as the Tribunal have erred in deducting a  

further 1/3rd from the amount of compensation on the reasoning of payment  

of lump sum amount.

21. It has furthermore to be borne in mind that apart from the amount of  

compensation and funeral expenses as also a partial sum towards the loss of  

consortium on the part of wife, no amount has been paid on other heads.

22. We, therefore,  are of the opinion that  the amount of compensation  

should be calculated at Rs. 17,431/- per month plus Rs.25,000/- considering  

his future prospects of promotion as an Executive Engineer divided by 2 for  

the purpose of calculating the loss of income, which should be multiplied by  

12  and  then  Annual  Income,  multiplied  by  15  which  comes  to  Rs.  

38,18,790/-. Further, as 1/3rd should be deducted towards personal expenses  

of  the  deceased,  the  financial  dependency would come to  Rs.25,45,860/-  

from which a further deduction of 50% shall be made by way of contributory  

negligence on the part of the deceased. Thus, the claimants are entitled to  

Rs.12,72,930/-.  An  amount  of  Rs.7000/-  towards  funeral  Expenses  and  

consortium shall be added making it Rs.12,79,930/- which is rounded off to  

Rs.12,80,000/- with interest throughout at the rate of 7½% per annum.

23. The appeals are disposed of on the above terms.

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..…………………………..…J.  [S.B. Sinha]

..…………………………..…J.  [Dr. Mukundakam Sharma]

New Delhi; May 06, 2009

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