REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.                OF 2009 (Arising out of SLP (C) No.15167 of 2008)

National Insurance Company Ltd. … Appellant

Versus

Gurumallamma & Anr. … Respondents

J U D G M E N T

S.B. Sinha, J.

1. Leave granted.

2. Application of the Second Schedule appended to the Motor Vehicles  

Act, 1988 (the Act) in the facts and circumstances of this case is involved in  

this  appeal  which  arises  out  of  a  judgment  and  order  dated  19.11.2007  

passed by a Division Bench of the High Court of Karnataka at Bangalore in  

MFA No.6627 of  2007  dismissing  the  appeal  preferred  by  the  appellant  

insurance company from a judgment and award dated 29.11.2006 passed in

MVC No.982  of  2006 by  the  16th Additional  Judge,  MACT,  Bangalore,  

awarding compensation for a sum of Rs.4,78,300/- by way of compensation.

3. Indisputably,  one  Nagraj,  predecessor-in-interest  of  the  respondent,  

died in an accident  which took place on 14.12.2005.  The deceased was  

travelling in an auto rickshaw bearing registration No.KA-05-A/4240.   It  

collided with a car bearing Registration No.KA-02-N/4605.   

4. An  application  under  Section  163A  of  the  Act  was  filed.   The  

deceased, at the time of accident, was aged about 22 years; whereas the age  

of the claimant was 50 years.  The learned Tribunal as also the High Court,  

in determining the amount of compensation, applied the multiplier of 17.

5. Ms.  Meenakshi  Midha,  learned counsel  appearing on behalf  of  the  

appellant,  would submit that the learned Tribunal as also the High Court  

committed a serious error in passing the impugned judgment insofar as they  

failed to take into consideration the fact that keeping in view the age of the  

claimant, the multiplier of 13 should have been applied.  It was furthermore  

contended that no proof of income of the deceased having been brought on  

record,  the Tribunal as also the High Court  committed a serious error in  

holding that his income was Rs.3,300/- per month.   

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6. The  deceased  was  a  bachelor.   He  was  running  a  small  hotel.  

Although there is some dispute in regard to the nature of the claim petition,  

the learned Tribunal as also the High Court having proceeded on the basis  

that  the same was filed in terms of  Section 163A of the Act,  we see no  

reason to take a different view.   

7. Section 163A was inserted by Act No.54 of 1994 as a special measure  

to ameliorate the difficulties of the family members of a deceased who died  

in use of a motor vehicle.  It contains a non-obstante clause.  It makes the  

owner of a motor vehicle or the authorized insurer liable to pay in the case of  

death, the amount of compensation as indicated in the Second Schedule to  

his  legal  heirs.   The  Second  Schedule  provides  for  the  amount  of  

compensation  for  third  party  Fatal  Accident/Injury  Cases  Claims.   It  

provides for the age of the victim and also provides for the multiplier for  

arriving at the amount of compensation which became payable to the heirs  

and legal representatives of the deceased depending upon his annual income.  

The Second Schedule furthermore provides that in a case of fatal accident,  

the  amount  of  claim  shall  be  reduced  by  1/3rd in  consideration  of  the  

expenses which the victim would have incurred upon himself, had he been  

alive.  It provides for the amount of minimum compensation of Rs.50,000/-.  

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It furthermore provides for payment of general damages as specified in Note  

3 thereof.

8. Multiplier stricto sensu is not applicable in the case of fatal accident.  

The multiplier would be applicable only in case of disability in non-fatal  

accidents  as  would  appear  from  the  Note  5  appended  to  the  Second  

Schedule.   Thus,  even  if  the  application  of  multiplier  is  ignored  in  the  

present case and the income of the deceased is taken to be Rs.3,300/- per  

month, the amount of compensation payable would be somewhat between  

6,84,000/-  to  Rs.7,60,000/-.   As  the  Second  Schedule  provides  for  a  

structured  formula,  the  question  of  determination  of  payment  of  

compensation by application of judicial mind which is otherwise necessary  

for  a  proceeding  arising  out  of  a  claim petition  filed  under  Section  166  

would not arise.  The Tribunals in a proceeding under Section 163A of the  

Act is required to determine the amount of compensation as specified in the  

Second Schedule.  It is not required to apply the multiplier except in a case  

of injuries and disabilities.

9. The Parliament in laying down the amount of compensation in the  

Second  Schedule,  as  indicated  hereinbefore,  in  its  wisdom,  provided  for  

payment of some amount which should be treated to be the minimum.  It  

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took into consideration the fact that a person’s potentiality to earn is highest  

when  he  is  aged  between  25  and  30  years  and  that  is  why  in  case  of  

permanent disability multiplier of 18 has been specified.  The very fact that  

even if the deceased had an income of Rs.3,000/- per month, he being aged  

about 15 years would receive a sum of Rs.60,000/- but if his income was  

Rs.40,000/- per annum, his legal heirs and representatives would receive a  

sum of Rs.8,00,000/-.  In the case of any non-earning person, the notional  

income has been fixed at Rs.15,000/- per annum.   

10. The deceased was running a hotel.  He was, therefore, having some  

income.  No document, however, was produced in support of the statement  

of the claimant (the mother of the deceased) that his income was 3,300/- per  

month.  On what basis such a claim was made has not been disclosed.  No  

document  was  produced.   The  deceased  was  not  an  income  tax  payee.  

Income of Rs.3,300/- might have been chosen so as not to cross the deadline  

of income of Rs.40,000/- per annum.   

11. Although both the Tribunal as also the High Court has accepted the  

same, in our opinion, the income of the deceased should be determined at  

Rs.24,000/-  per  annum.  Applying the  said principle,  the claimant  would  

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have been entitled to a compensation of Rs.4,22,000/-.  From that sum, one-

third should be deducted.

12. In view of the aforementioned finding, we are of the opinion that it is  

not necessary for us to take into consideration, the decisions cited at the bar  

suggesting that in a case of death of an unmarried person and wherein the  

claimants are the parents of the deceased, the age of the deceased shall be  

irrelevant  factor  for  applying  the  multiplier  specified  in  the  Second  

Schedule.

13. To the aforementioned extent, this appeal is allowed.  In the facts and  

circumstances of the case, however, there shall be no order as to costs.

……………….…..……J. [S.B. Sinha]

..………………..……..J.    [Cyriac Joseph]

New Delhi; July 23, 2009

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