IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 8127 OF 2002

RAMZAN KHAN & ANR. .......APPELLANT(S) Versus  NATIONAL INSURANCE CO. LTD. .....RESPONDENT(S)

O R D E R

This is claimant's appeal.  Habib, the son of the appellants  died  in  a  motor  accident  which  occurred  on 24.11.1988.  The deceased was a bachelor aged about 23 years. He was working as a driver and earning Rs.1050/- p.m. as salary apart from daily batta.  The claimants who were  the  parents  were  aged  58  years  and  45  years respectively.   The  claimants  prayed  for  award  of compensation of Rs.4,10,000/-.  The tribunal awarded a compensation of Rs.50,000/-.  On appeal, the High Court by its judgment dated 2.7.1998 increased the compensation to Rs.80,000/- with interest at 12% p.a. for a period of five years only.  For arriving at the compensation, the High Court calculated the annual contribution to the family as Rs.7800 (Rs.650 x 12).  By applying multiplier of 10, the tribunal  arrived  at  the  total  loss  of  dependency  as

Rs.78,000/-  and  by  adding  Rs.2000/-  towards  funeral expenses came to the conclusion that Rs.80,000/- should be the  compensation.  The  judgment  of  the  High  Court  was rendered  on  2.7.1998.   The  High  Court  felt  that  the insurer  was  not  responsible  for  the  long  pendency  of litigation and therefore restricted the award of interest for a period of five years only.   

2. The said judgment is challenged by the claimants on two grounds: (a) the multiplier applied is erroneous, and (b) the interest should not have been restricted to five years.

3. It is now well-settled that where the deceased is a bachelor and the claimants are the parents, the multiplier should be determined not with reference to the age of the deceased but with reference to the age of the parents, in particular  the age of the mother.  In this case, the mother  was  aged  45  years.   Therefore,  the  appropriate multiplier was 13 and not 10.  The High Court apparently determined the multiplier with reference to the age of the father who was 58 years which is erroneous.  There is no dispute in regard to the annual dependency of Rs.7800/- arrived at by the High Court.  In the circumstances, the loss of dependency will be 7800 x 13 = 1,01,400/-.  The claimants will also be entitled to a sum of Rs.5000/-

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towards  loss  of  estate  and  Rs.5000/-  towards  funeral expenses.   Therefore,  the  total  compensation  will  be Rs.1,11,400/-.

4. Insofar as interest is concerned, the reasoning of the High Court that due to long pendency of the litigation the liability of the insurer should be restricted only for a period of five years is not sound.  While it is true that the insurer is not responsible for the pendency of the litigation, it is equally true that the claimants were also not responsible for the pendency of the litigation. If the insurer had voluntarily worked out and paid the just compensation when the accident occurred there would be no reason to fasten any liability for interest on the insurer.   Therefore,  it  would  be  unjust  to  deny  the claimants, interest for the entire period either on the ground that the litigation was pending for long or the hearing of the case was delayed.

5. We therefore hold that the claimants are entitled to interest from the date of claim petition till the date of payment.  It is stated that the amount awarded by the High Court  with  interest  was  calculated  and  a  sum  of Rs.1,41,682 was deposited on 3.12.2002. Be that as it may.

6. We  allow  this  appeal  in  part  and  increase  the

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compensation from Rs.80,000/- to Rs.1,11,400/-  Insofar as the interest is concerned, the claimant will be entitled to interest @ 12% p.a. on Rs.80,000/- from the date of claim petition till the date of deposit.  Insofar as the amount of compensation increased by this Court, namely Rs.31,400/-, it shall carry interest at the rate of 6% p.a. from the date of claim petition till the date of payment.   The  insurer  is  given  three  months'  time  to deposit  the  difference  amount  with  the  tribunal.  The insurer  shall  also  pay  Rs.2500/-  as  costs  to  the appellants.  

  ...........................J.    ( R.V. RAVEENDRAN )

...........................J.           ( LOKESHWAR SINGH PANTA )

New Delhi;  September 30, 2008.     

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