REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. __________ of 2009 (Arising out of SLP ( C ) No 8205 of 2007).

Reshma Kumari and others … Appellants

Versus

Madan Mohan and another … Respondents

WITH

CIVIL APPEAL NO. __________ of 2009 (Arising out of SLP ( C ) No 21649 of 2006).

Smt. Puneet Kaur and others … Appellants

Versus

Delhi Transport Corporation … Respondents

AND

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CIVIL APPEAL NO. __________ of 2009 (Arising out of SLP ( C ) No 6791 of 2006).

Anjani Singh and others … Appellants

Versus

Salauddin and others … Respondents

J U D G M E N T

S.B. SINHA, J.

1. Application  of  the  principles  for  grant  of  compensation  under  the  

Motor Vehicles Act, 1939 (for short ‘the 1939 Act’) and the Motor Vehicles  

Act, 1988 (for short ‘the 1988 Act’) is the question involved herein.  Before,  

embarking  on  the  said  question  we  may  notice  the  fact  of  the  matters  

involved in each case.

Civil Appeal arising out of SLP (C) NO.8205/2007

2. Madan Mohan Singh Saini met with an accident  on 3rd September,  

1987, when the scooter on which he was riding, collided with a Maruti van,  

driven  by  respondent  No.1.   Respondent  No.2  is  the  insurer.   He  was  

admitted  to  Ram  Manohar  Lohia  Hospital  where  he  succumbed  to  his  

injuries on 8th September, 2006.    

2

Appellants herein who are, wife, children and mother of the deceased  

filed  a  claim  petition  before  the  Motor  Accident  Claims  Tribunal,  New  

Delhi, under Sections 110-A and 92-A of the Act.    

By an award dated 13th July,  1992 the Tribunal  awarded a sum of  

Rs.3,36,000/- by way of  compensation with 12% interest from the date of  

filing of the claim petition.   

3. Aggrieved by and dissatisfied with the said amount, appellants filed  

an appeal  being FAO before the High Court of Delhi.   A learned Single  

Judge of  the High Court by reason of  the impugned judgment and order  

dated 8th February, 2007 enhanced the compensation by Rs.17,000/-.

The  appellants  still  dissatisfied  have  filed  the  present  appeal  by  

obtaining special leave.  

Civil Appeal arising out of SLP (C) No.21649 of 2006.  

4. Jagmohan  Singh,  (deceased),  husband  of  appellant  No.1;  father  of  

appellant Nos. 2 and 3 and son of appellant Nos. 4 and 5, died in an accident  

with a D.T.C. bus.   

3

The appellants  filed a  claim petition before  the  Additional  District  

Judge/Motor  Vehicle  Accident  Tribunal,  Ghaziabad  claiming  a  sum  of  

Rs.27,50,000/- by way of compensation.    

By its order dated 21st May, 1996 a sum of Rs.2,88,000/- with 12%  

interest thereon from the date of filing  of the claim petition, was awarded.   

5. Feeling dissatisfied, the appellants filed an FAO before the Allahabad  

High Court.  A Division Bench of the said Court by its judgment and order  

dated  26th May,  2006  enhanced  the  amount  of  compensation  to  Rs.  

4,08,000/-.   

Aggrieved by and dissatisfied with the said judgment,  the appellants  

have preferred this appeal by special leave.  

Civil Appeal arising out of SLP (C) No.6791 of 2007.  

6. Sergeant Dalbir Singh died in a road accident on 17th September, 1997  

with a truck which was driven by respondent No.1.  Respondent Nos. 2 and  

3 are the owner and insurance company respectively.   

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The appellants, who are the legal heirs, i.e. wife, children and mother  

of the deceased, filed a claim petition before the Motor Accident Claims  

Tribunal, Faridabad under Sections 166 and 140 of the 1988 Act for grant of  

compensation of Rs.15,00,000/-.  The Motor Accident Claims Tribunal by  

its award dated 26th June, 2000 awarded a sum of Rs.2,49,600/-with 12%  

interest on the said amount by way of compensation.  

7. Feeling dissatisfied, appellants filed an FAO before the High Court of  

Punjab  and  Haryana  at  Chandigarh  and  by  the  impugned  judgment  and  

order, a learned Single Judge of the High Court partly allowed the appeal  

and enhanced the amount compensation by Rs.1,20,600/- besides interest @  

6% per annum on the enhanced compensation.  

8. The  common  questions  which  arise  for  our  consideration  in  these  

appeals are :-

1) Whether the multiplier specified in the Second Schedule  

appended to the Act should be scrupulously applied in all  

the cases?

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2) Whether for determination of the multiplicand,  the Act  

provides  for  any  criterion,  particularly  as  regards  

determination of future prospects?

Before we, however, advert to the said questions we may notice that  

Section 163-A of the Act was inserted on or about 14th November, 1994.   

9. Even  prior  to  the  enactment  of  the  said  provision,  this  Court  in  

General  Manager,  Kerala  State  Road  Transport  Corporation,  Trivandrum

v.  Susamma  Thomas  and  others,  [  (1994)  2  SCC  176  ]  following  the  

decisions of the English Courts applied structured formula for determination  

of  the  amount  of  compensation.    The  principle  with  regard  to  the  

determination of the amount of compensation on the basis of the structured  

formula in  Susamma Thomas (supra) was considered having regard to the  

decision of  Diplock, J in his speech in  Mallett's case  [ (1970) AC 166 :  

(1969) 2 All ER 178 178 ].  We would refer to Mallett (supra) a little later  

but we may at this stage notice that the principle laid down therein has been  

stated to be logically sound and legally well established.   

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10. So  far  as  the  question  of  loss  of  future  earnings  on  the  basis  of  

average  life  expectancy  is  concerned,  this  Court,  having  regard  to  the  

phraseology  used  in  Section  110-B  of  the  Motor  Vehicles  Act,  1939  

envisaging  payment  of  just  compensation  to  the  victims  and/or  the  

successors of the deceased, stated that any application of a rigid formula  

may not be applied.

In  Susamma  Thomas (supra)  it  was  observed  that  the  multiplier  

method is the appropriate one which should ordinarily be not departed from  

save in  rare  and extraordinary  circumstances  and very  exceptional  cases.  

The rationale for applying the said principle was laid down stating :-  

“17.   The  multiplier  represents  the  number  of  years' purchase on which the loss of dependency is  capitalised. Take for instance a case where annual  loss of dependency is Rs. 10,000/ -. If a sum of Rs.  1,00,000/- is invested at 10% annual interest, the  interest  will  take  care  of  the  dependency,  perpetually. The multiplier in this case works out  to 10. If the rate of interest is 5% per annum and  not  10% then the  multiplier  needed to  capitalise  the loss of the annual dependency at Rs. 10,000/-  would be 20. Then the multiplier, i.e., the number  of  years'  purchase  of  20  will  yield  the  annual  dependency perpetually.  Then allowance to scale  down the multiplier would have to be made taking  into  account  the  uncertainties  of  the  future,  the  allowances for immediate lump sum payment, the  

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period over which the dependency is to last being  shorter and the capital feed also to be spent away  over  the  period  of  dependency  is  to  last  etc.  Usually in English Courts the operative multiplier  rarely  exceeds  16  as  maximum.  This  will  come  down  accordingly  as  the  age  of  the  deceased  person  (or  that  of  the  dependants,  whichever  is  higher) goes up,”

11. It is, however, of some significance to notice that at the relevant point  

of  time  the  rate  of  bank  interest  was  about  12%  per  annum  to  which  

reference has also been made by the High Court at some length.  

12. In  Susamma  Thomas (supra)  apart  from  applying  the  structured  

formula with regard to the determination of the amount of compensation as  

regards the future prospect, it was opined :-

 “19. In the present case the deceased was 39 years  of  age.  His  income was Rs 1032 per  month.  Of  course, the future prospects of advancement in life  and  career  should  also  be  sounded  in  terms  of  money  to  augment  the  multiplicand.  While  the  chance  of  the  multiplier  is  determined  by  two  factors, namely, the rate of interest appropriate to a  stable economy and the age of the deceased or of  the  claimant  whichever  is  higher,  the  ascertainment  of  the  multiplicand  is  a  more  difficult exercise. Indeed, many factors have to be  put into the scales to evaluate the contingencies of  

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the future. All contingencies of the future need not  necessarily be baneful. The deceased person in this  case had a more or less stable job. It will not be  inappropriate to take a reasonably liberal view of  the prospects  of  the future and in estimating the  gross income it  will  be unreasonable  to estimate  the  loss  of  dependency  on  the  present  actual  income of Rs 1032 per month. We think, having  regard  to  the  prospects  of  advancement  in  the  future  career,  respecting  which there  is  evidence  on  record,  we  will  not  be  in  error  in  making  a  higher estimate of monthly income at Rs 2000 as  the gross income. From this has to be deducted his  personal  living  expenses,  the  quantum of  which  again depends on various factors such as whether  the style of living was spartan or bohemian. In the  absence  of  evidence  it  is  not  unusual  to  deduct  one-third of the gross income towards the personal  living expenses and treat the balance as the amount  likely to have been spent on the members of the  family  and  the  dependents.  This  loss  of  dependency should capitalize with the appropriate  multiplier.  In the present case we can take about  Rs 1400 per month or Rs 17,000 per year as the  loss  of  dependency  and  if  capitalized  on  a  multiplier of 12, which is appropriate to the age of  the deceased, the compensation would work out to  (Rs 17,000 x 12 = Rs 2,04,000) to which is added  the usual award for loss of consortium and loss of  the  estate  each  in  the  conventional  sum  of  Rs  15,000.”

13. Parliament thereafter inserted Section 163A and the Second Schedule  

in the Act.  One of the features thereof which we may immediately notice is  

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that  it  provides  for  claim of  compensation  in  a  case  involving  no  fault,  

stating :-

“163A.  Special  provisions  as  to  payment  of  compensation on structured formula basis

(1) Notwithstanding anything contained in this Act  or in any other law for the time being in force or  instrument having the force of law, the owner of  the motor vehicle or the authorised insurer shall be  liable  to  pay  in  the  case  of  death  or  permanent  disablement due to accident arising out of the use  of motor vehicle, compensation, as indicated in the  Second Schedule, to the legal heirs or the victim,  as the case may be.

Explanation.-For  the  purposes  of  this  sub- section,  "permanent  disability"  shall  have  the  same meaning and extent as in the Workmen's  Compensation Act, 1923 (8 of 1923).  

(2)  In  any  claim  for  compensation  under  sub- section (1),  the claimant shall  not be required to  plead  or  establish  that  the  death  or  permanent  disablement in respect of which the claim has been  made was due to any wrongful  act or neglect or  default  of  the  owner  of  the  vehicle  or  vehicles  concerned or of any other person.

(3) The Central Government may, keeping in view  the  cost  of  living  by  notification  in  the  Official  Gazette,  from  time  to  time  amend  the  Second  Schedule.”

14. After the aforementioned provision was brought in the Statute Book,  

this Court had the occasion to consider the applicability of the structured  

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formula  once  again  in  U.P.  State  Road  Transport  Corporation.  v.  Trilok  

Chandra, [ (1996) 4 SCC 362].  Ahmadi, C.J. noticed certain discrepancies  

therein and inter alia pointed out :-,  

“18. We must at once point out that the calculation  of compensation and the amount worked out in the  Schedule suffer from several defects. For example,  in Item 1 for a victim aged 15 years, the multiplier  is  shown to  be 15 years  and the  multiplicand  is  shown  to  be  Rs 3000.  The  total  should  be  3000x15=45,000  but  the  same  is  worked  out  at  Rs .  60,000.  Similarly,  in  the  second  item  the  multiplier is 16 and the annual income is Rs 9000;  the  total  should  have  been  Rs. 1,44,000  but  is  shown  to  be  Rs.1,71,000.  To  put  it  briefly,  the  table  abounds  in  such  mistakes.  Neither  the  tribunals  nor  the  courts  can  go  by  the  ready  reckoner. It can only be used as a guide. “

15. However,  it  is  pertinent  to  notice  that  the  Bench categorically  laid  

down that those mistakes are limited to actual calculations only and not in  

respect of other items.  It was emphasized that the multiplier cannot exceed  

18 years’ purchase factor.  It noticed that the same was an improvement over  

the earlier position that ordinarily it should not exceed 16.  

This Court stated the law thus :-

“15.  We  thought  it  necessary  to  reiterate  the  method  of  working  out  ‘just’  compensation  

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because, of late, we have noticed from the awards  made by tribunals and courts that the principle on  which  the  multiplier  method  was  developed  has  been lost sight of and once again a hybrid method  based on the subjectivity of the Tribunal/Court has  surfaced,  introducing  uncertainty  and  lack  of  reasonable  uniformity  in  the  matter  of  determination of compensation. It must be realised  that  the  Tribunal/Court  has  to  determine  a  fair  amount of compensation awardable to the victim  of an accident which must be proportionate to the  injury caused. The two English decisions to which  we have referred earlier provide the guidelines for  assessing the loss occasioned to the victims. Under  the formula advocated by Lord Wright in  Davies,  the loss has to be ascertained by first determining  the  monthly  income  of  the  deceased,  then  deducting  therefrom  the  amount  spent  on  the  deceased,  and  thus  assessing  the  loss  to  the  dependants  of  the  deceased.  The  annual  dependency assessed in this manner is then to be  multiplied by the use of an appropriate multiplier.  Let us illustrate: X, male, aged about 35 years, dies  in an accident. He leaves behind his widow and 3  minor children. His monthly income was Rs 3500.  First, deduct the amount spent on X every month.  The  rough  and  ready  method  hitherto  adopted  where no definite evidence was forthcoming, was  to break up the family into units, taking two units  for an adult and one unit for a minor. Thus X and  his  wife  make  2+2=4 units  and  each  minor  one  unit i.e. 3 units in all,  totalling 7 units.  Thus the  share per unit works out to Rs 3500/7=Rs 500 per  month.  It  can thus be assumed that Rs 1000 was  spent on X. Since he was a working member some  provision  for  his  transport  and  out-of-pocket  expenses has to be estimated. In the present case  we estimate the out-of-pocket expense at Rs 250.  Thus the amount spent on the deceased X works  out  to  Rs 1250  per  month  leaving  a  balance  of  

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Rs 3500-1250=Rs 2250  per  month.  This  amount  can  be  taken  as  the  monthly  loss  to  X’s  dependants.  The  annual  dependency  comes  to  Rs 2250x12=Rs 27,000.  This  annual  dependency  has to be multiplied by the use of an appropriate  multiplier  to  assess  the  compensation  under  the  head  of  loss  to  the  dependants.  Take  the  appropriate multiplier to be 15. The compensation  comes to Rs 27,000x15=Rs 4,05,000. To this may  be added a conventional amount by way of loss of  expectation  of  life.  Earlier  this  conventional  amount  was  pegged  down  to  Rs 3000  but  now  having regard to the fall in the value of the rupee,  it  can  be  raised  to  a  figure  of  not  more  than  Rs10,000.  Thus  the  total  comes  to  Rs 4,05,000+10,000= Rs 4,15,000.  

16. We may place on record that despite the recommendations made by  

this  Court  in  Trilok  Chandra (supra)  the  Parliament  did  not  amend  the  

Second Schedule.   

17. We  must  also  place  on  record  that  according  to  Mr.  Atul  Nanda,  

learned counsel appearing on behalf of the Insurance Company, the Second  

Schedule does not contain any such mistake.  Be that as it may this Court  

even in subsequent decisions reiterated the said principle in a large number  

of cases.  We would, however, notice only a few of them.  

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In Kaushnuma Begum  v.  New India Assurance Co. Ltd., [ (2001) 2  

SCC 9 ] this Court observed:-

22. The appellants claimed a sum of Rs 2,36,000.  But  PW 1  widow of  the  deceased  said  that  her  husband’s income was Rs 1500 per month. PW 4  brother  of  the  deceased also supported the  same  version. No contra-evidence has been adduced in  regard to that aspect. It is, therefore, reasonable to  believe that the monthly income of the deceased  was  Rs. 1500.  In  calculating  the  amount  of  compensation  in  this  case  we  lean  ourselves  to  adopt  the  structured  formula  provided  in  the  Second Schedule to the MV Act.  Though it  was  formulated for the purpose of Section 163-A of the  MV Act, we find it a safer guidance for arriving at  the  amount  of  compensation  than  any  other  method so far as the present case is concerned.”

In  United  India  Insurance  Co.  Ltd.  v.   Patricia  Jean  Mahajan,  

[ (2002) 6 SCC 281 ] this Court held :-  

“21. The purpose to compensate the dependants of  the  victims  is  that  they  may  not  be  suddenly  deprived of the source of their maintenance and as  far  as  possible  they  may  be  provided  with  the  means  as  were  available  to  them  before  the  accident  took  place.  It  will  be  a  just  and  fair  compensation.  But in cases where the amount of  compensation  may  go  much  higher  than  the  amount  providing  the  same  amenities,  comforts  and  facilities  and  also  the  way  of  life,  in  such  circumstances also it may be a case where, while  

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applying  the  multiplier  system,  the  lesser  multiplier  may  be  applied.  In  such  cases,  the  amount  of  multiplicand  becomes  relevant.  The  intention is not to overcompensate.

22. We  therefore,  hold  that  ordinarily  while  awarding compensation,  the  provisions contained  in the Second Schedule may be taken as a guide  including the multiplier, but there may arise some  cases,  as the one in hand, which may fall  in the  category having special features or facts calling for  deviation from the multiplier usually applicable.”

It is evident from the above that this Court in the said decision had  

taken a departure from the Second Schedule.  

In  Jyoti Kaul  v.  State of M.P., [ (2002) 6 SCC 306 ] multiplier of 15  

was adopted, stating :-  

 “The  aforesaid  decision  makes  it  clear  that  the  principle of multiplier would depend on the facts  and  circumstances  of  each  case.  Looking  to  the  facts  of  this  case  we  find  that  the  Tribunal  has  given good reasons for applying the multiplier of  15.  This  was  in  addition  of  taking  into  consideration that the predecessors of the deceased  all lived for more than 80 years. The High Court  reduced  the  multiplier  from  15  to  10  without  taking into consideration circumstances considered  by the Tribunal and thus committed the error. We,  accordingly,  set  aside  the  findings  of  the  High  Court  only  to  the  extent  of  the  application  of  

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multiplier  and  uphold  other  findings  including  reduction  of  interest.  The  present  appeal,  accordingly, succeeds in part. The computation of  compensation now shall be made on the basis of  multiplier  of  15.  The  difference  of  enhanced  amount  which  has  yet  not  been  paid  by  the  respondent  State  shall  be  paid  to  the  claimants  within a period of three months from today.”

18. The said decisions have not yet been overruled.  We may, however,  

immediately notice that recently this Court had advocated application of a  

lower  multiplier  in  cases  involving Section 166 of  the  Act,  but  no legal  

principles have been laid down therein.  In New India Assurance Co. Ltd.  v.  

Shanti Pathak, (2007) 10 SCC 1, this Court held :-  

6. Considering  the  income  that  was  taken,  the  foundation  for  working  out  the  compensation  cannot be faulted with. The monthly contribution  was fixed at Rs 3500. In the normal course we  would have remitted the matter to the High Court  for consideration on the materials placed before it.  But considering the fact that the matter is pending  since  long,  it  would  be  appropriate  to  take  the  multiplier of 5 considering the fact that the mother  of the deceased was about 65 years at the time of  the accident and age of the father was more than  65  years.  Taking  into  account  the  monthly  contribution at Rs 3500  as  held  by  the  Tribunal  and the High Court,  the entitlement of the claim  would be Rs 2,10,000.  The  same  shall  bear  interest  @  7.5%  p.a.  from  the  date  of  the  application  for  compensation.  Payment  already  made shall be adjusted from the amount due.

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8. In the instant case the age of the deceased was  52 years as per the post-mortem report, and the  multiplier  thus  has  to  be  8  instead  of  13  as  adopted by the Tribunal and upheld by the High  Court. The rate of interest awarded does not need  any interference. The monthly income has to be  taken as Rs 11,684  and  one-third  has  to  be  deducted therefrom for personal expenses. Thus,  the annual loss of income comes to Rs  93,939.  The  same  is  rounded  to  Rs.  93,000.  The  entitlement  for  loss  of  income  comes  to  Rs 7,44,000. The other amounts awarded by the  Tribunal  totalling  Rs  29,500  remain  unaltered.  Thus,  the  claimant  is  entitled  to  Rs  7,73,500  along  with  interest  at  the  rate  fixed  by  the  Tribunal.  The  payment  already  made  shall  be  adjusted.”

19. Learned  counsel  for  the  appellants  contended  that  later  decisions  

should not be followed keeping in view the binding precedents of this Court  

in the earlier cases.  It was urged  that the prospective loss of future earnings  

by way of career advancement as also revision in the scale of pay must be  

taken into consideration for the purpose of determination of the multiplicand  

while  applying  the  structured  formula  contained  in  the  Second Schedule  

appended to the Act.

20. The compensation which is required to be determined must be just.  

While the  claimants  are required to be compensated  for the loss of their  

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dependency,  the  same should not  be considered to  be a  windfall.  Unjust  

enrichment should be discouraged.   This Court cannot also lose sight of the  

fact that in given cases, as for example death of only son to a mother, she  

can never be compensated in monetary terms.   

21. The  question  as  to  the  methodology  required  to  be  applied  for  

determination  of  compensation  as  regards  prospective  loss  of  future  

earnings, however, as far as possible should be based on certain principles.  

A person may have a bright future prospect; he might have become eligible  

to promotion immediately;  there might have been chances of an immediate  

pay revision, whereas in another the nature of employment was such that he  

might not have continued in service; his chance of promotion, having regard  

to  the  nature  of  employment  may be distant  or  remote.   It  is,  therefore,  

difficult for any court to lay down rigid tests which should be applied in all  

situations. There  are divergent views.  In some cases it has been suggested  

that some sort of hypotheses or guess work may be inevitable.  That may be  

so.   

22. As regards future prospects for determination of compensation, some  

precedents may also be noticed by us.   

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In Sarla Dixit  v. Balwant Yadav, [ (1996) 3 SCC 179 ], this Court has  

held :-  

“7. So far as the adoption of the proper multiplier  is  concerned,  it  was  observed  that  the  future  prospects of advancement in life and career should  also be sounded in terms of money to augment the  multiplicand. While the chance of the multiplier is  determined  by  two  factors,  namely,  the  rate  of  interest  appropriate  to  a  stable  economy and the  age of the deceased or of the claimant whichever is  higher, the ascertainment of the multiplicand is a  more difficult exercise. Indeed, many factors have  to  be  put  into  the  scales  to  evaluate  the  contingencies  of  the  future.  All  contingencies  of  the  future  need  not  necessarily  be  baneful.  Applying these principles to the facts of the case  before  this  Court  in  the  aforesaid  case  it  was  observed that the deceased in that case was of 39  years of age. His income was Rs 1032  per  month.  He was more or less on a stable job and  considering the prospects of advancement in future  career  the  proper  higher  estimate  of  monthly  income of Rs 2000 as gross income to be taken as  average gross future income of the deceased and  deducting  at  least  1/3rd  therefrom  by  way  of  personal living expenses, had he survived the loss  of  dependency,  could be  capitalised  by  adopting  the  multiplicand  of  Rs 1400  per  month  or  Rs 17,000  per  year  and  that  figure  could  be  capitalised by adopting multiplier of 12 which was  appropriate to the age of deceased being 39 and to  that amount was added the conventional figure of  Rs 15,000  by  way  of  loss  of  consortium and  loss  of  estate.  Adopting  the  same  scientific  yardstick as laid down in the aforesaid judgment,  the  computation  of  compensation  in  the  present  case  can  almost  be  subjected  to  a  well-settled  

19

mathematical  formula.  Deceased  in  the  present  case,  as seen above,  was earning gross salary of  Rs 1543 per  month.  Rounding it  up to  figure  of  Rs 1500  and  keeping  in  view  all  the  future  prospects which the deceased had in stable military  service in the light of his brilliant academic record  and  performance  in  the  military  service  spread  over 7 years, and also keeping in view the other  imponderables  like  accidental  death  while  discharging  military  duties  and  the  hazards  of  military  service,  it  will  not  be  unreasonable  to  predicate  that  his  gross  monthly  income  would  have shot up to at least double than what he was  earning at the time of his death, i.e., up to Rs 3000  per  month  had  he  survived  in  life  and  had  successfully  completed  his  future  military  career  till the time of superannuation. The average gross  future  monthly  income  could  be  arrived  at  by  adding  the  actual  gross  income  at  the  time  of  death, namely, Rs 1500 per month to the maximum  which  he  would  have  otherwise  got  had  he  not  died a premature death, i.e., Rs 3000  per  month  and dividing that figure by two. Thus the average  gross monthly income spread over his entire future  career,  had it  been available,  would work out  to  Rs 4500 divided by 2, i.e.,  Rs 2250. Rs 2200 per  month would have been the gross monthly average  income available to the family of the deceased had  he  survived  as  a  breadwinner.  From  that  gross  monthly  income  at  least  1/3rd  will  have  to  be  deducted  by  way  of  his  personal  expenses  and  other  liabilities  like  payment  of  income tax  etc.  That would roughly work out to Rs 730 per month  but  even  taking  a  higher  figure  of  Rs 750  per  month and deducting the same by way of average  personal  expenses  of  the  deceased  from  the  average  gross  earning  of  Rs 2200  per  month  balance of  Rs 1450 which can be rounded up to  Rs 1500  per  month  would  have  been  the  average  amount  available  to  the  family  of  the  

20

deceased, i.e.,  his dependants,  namely, appellants  herein. It is this figure which would be the datum  figure  per  month  which  on  annual  basis  would  work out to Rs 18,000.  Rs 18,000 therefore would  be  the  proper  multiplicand  which  would  be  available  for  capitalisation  for  computing  the  future economic loss suffered by the appellants on  account of untimely death of the breadwinner. As  the age of the deceased was 27 years and a few  months,  at  the  time  of  his  death  the  proper  multiplier in the light of the aforesaid decision of  this  Court  in  G.M.,  Kerala SRTC2 would be 15.  Rs 18,000  multiplied  by  15  will  work  out  to  Rs 2,70,000. To this figure will have to be added  the conventional figure of Rs 15,000  by  way  of  loss of estate and consortium etc. That will lead to  a total  figure of Rs 2,85,000. This is the amount  which the appellants would be entitled to get by  way of compensation from Respondents 1 and 2  subject to our decision on Point No. 2.”

In  Abati  Bezbaruah v.  Dy.  Director  General,  Geological  Survey of  

India, [ (2003) 3 SCC 148 ] it was observed :-  

“11. It is now a well-settled principle of law that  the  payment  of  compensation  on  the  basis  of  structured  formula  as  provided  for  under  the  Second Schedule should not ordinarily be deviated  from. Section 168 of the Motor Vehicles Act lays  down  the  guidelines  for  determination  of  the  amount of compensation in terms of Section 166  thereof.  Deviation  from  the  structured  formula,  however, as has been held by this Court, may be  resorted to in exceptional cases. Furthermore, the  amount of compensation should be just and fair in  the facts and circumstances of each case.”

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23. Learned  Single  Judge of  the  Delhi  High Court  in  the  appeal  filed  

against the Award which is subject matter of SLP (C) No. 8205 of 2007  

opined that  one of the two methods  adopted to determine the amount of  

compensation in fatal accident actions is the multiplier method adopted in  

Davies   v.   Powell  Duffregn  Associaed  Colliers  Ltd. [  1942  AC 601 ].  

According to learned Judge it takes care of future prospects.  A statement  

has  been  appended,  which  we  intend  to  reproduce  hereinafter  for  

consideration as to whether the assumption made by him that the Second  

Schedule  takes  care  of  inflation  of  interest,  loss  of  future  prospects,  is  

correct.  The statement reads, thus:-

S.No.   Year  Money  in  Capital  Account

Interest  (12%  for  87-95,  10%  for  95- 02, 8% for 02- 12)

Loss  of  dependency  (Assuming  10%  increase every eyar)

Excess  of  interest  over  dependency

1,   1987- 88  3,36,000   40,320 1344 x 12 - 16128  24,192  2.   1988 - 89  3,60,192   43,223 1478 x 12 = 17736  25,487  3.   1989 - 90   3,85,679   46,281  1625 x 122 = 19500  26,781   4.   1990 - 91   4,12,461   49,495  1787 x 12 = 21444  28,051  5.   1991 - 92   4,69, 793   52,861  1965 x 12 = 25932  29,281  6.   1992 - 93   4,69,793   56,375  2161 x 12 = 25932  30,443  7.   1993 - 94   5,00,236   60,028  2376 x 12 = 28512  31,516  8.   1994 - 95   5,31,753  63,810  2613 x 12 = 31356  32,454  9.   1995 – 96   5,64,207  56,421  2874 x 12 = 34,488  21,933 10.   1996 – 97   5,86,140   58,614  3161 x 12 = 37931  20,682 11.   1997 - 98   6,06,822  60,682  3476 x 12 = 41712  18,970 12.   1998 - 99   6,25,792  62,579  3823 x 12 = 45,876  16,703 13.   1999 - 00   6,42,495  64,250  4205 x 12 = 50460  13,790 14.   2000 - 01   6,56,285  65,628  4625 x 12 = 55500  10,128 15.   2001 - 02   6,66,413  66,641  5087 x 12 = 61044  5,597  16.   2002 - 03  6,72,010  55,761  5595 x 12 = 67140  13,379

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17.   2003 – 04   6,58,631  52,960  6154 x 12 - 73848  21,558 18.   2004 – 05   6,37,474  50,998  6769 x 12 = 81228  30,230 19.   2005 – 06  6,07,224  48,579  7445 x 12 = 89340  40,881 20.   2006 - 07  5,66,363  45,309  8189 x 12 = 98268  52,959 21.   2007 - 08  5,12,404  41,072  9007 x 12 = 108084  67,012 22.   2008 - 09  4,46,393  35,711  9907 x 12 = 118884  83,173 22.   2009 - 10  3,63,220  29,058 10897 x 12= 130764  1,01,706 24.   2010 – 11  1,61,514  20,291 11986 x 12=143832  1,22,911 25.   2011 - 12  1,38,603  11,088 13184x12=158208 1,47,120

24. An attempt has been made by the learned Judge to show that till the  

15th year, there will be an excess of interest over dependency. The excess  

interest can be capitalized for the next year and after 15 years, the capital is  

eroded and stands completely eroded in the 25th year.    

25. Mr.  Nanda,  learned  counsel  appearing  for  the  insurance  company,  

however,  submits  that  not  only  earning  growth  but  also  inflation  and  

uncertainty of life are taken care of by applying the structured formula.  In  

support of the aforementioned proposition reliance has been placed upon the  

decision of  Bhagwandas  v.  Mohd. Arif, AIR 1988 A.P. 99 wherein the  

learned Judge opined :-

“10. In the entire gamut of the law of tort damages,  this is the most difficult problem. However, over  the years, the Courts have, with the aid of modern  techniques in the field of Demography, Statistics  and the  Mathematical  Theory  of  Probability  and  

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Actuaries, developed systems which are today very  near perfect.”

As  regards  application  of  actuary’s-multiplier,  the  learned  Judge  

stated :-

18A. What is the basis for the actuary's multiplier,  what  are  the  factors  it  takes  into  account,  is  the  next question. In the judgment in A.P.S.R.T.C. v.  Shafiya  Khatoon  (AIR  1985  Andh  Pra  83)  the  mathematical  and  actuarial  background  was,  perhaps for the first time, explained at considerable  length. The net future losses from date of trial for  the remaining expected period of life (in accident  cases) and the net future losses from date of death  of the person (in fatal cases) have to be estimated.  This involves two exercises :

(I) Firstly, the mortality rates for the future years  have to be ascertained year by year to off-set the  future  uncertainties  of  life.  The  annual  loss  for  each future year is to be multiplied by the chance  of living up to the end of the year. If the chance of  an injured person living from 20 to  21st  year  is  0.99 (from mortality tables), and the actual loss is  Rs.  12,000/-,  the real  loss is  Rs.  12,000/-x  0.99.  For the next year, if the probability of living up to  22nd year is (say) 0.90, the real loss would be Rs.  12,000 x 0.90. Like this, the real losses for all the  future years, say up to 58 or 60 years (in the case  of those in service) or up to 70 years or so (in the  case  of  non-salarised  persons)  have  to  be  computed, the future annual probabilities of living  decreasing.  The  sum  total  is  not,  therefore,  the  gross sum arrived at by adding the Rs. 12000/- for  all the future years, but a gross sum arrived at by  

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multiplying  each  future  Rs.  12,000/-  by  the  probability  of  the  victim  living  in  each  of  the  future  years  as  taken  from  the  mortality  rates  published by the Government.

(II) The next exercise consists of taking each of the  figures for the future years i.e., Rs. 12,000 x 0.99.,  Rs. 12,000 x 0.90; and so on and converting them  to  their  present  value  or  discounting  them  for  accelerated  payment.  The  simple,  mathematical  formula  were  for  purpose  is  the  reverse  of  the  compound interest formula. (See Munkman 1985,  page  57)  Po=  Pn  /  (1+r)n /100  where  Pn  is  the  future annual figures, r is the rate of interest n is  the number of years (between the date of trial and  date relating to the year for which the income is  being  converted  into  present  value;  in  fatal  accident cases it will be the date of death and the  relevant  future  year  whose  income  is  being  converted). Like that,  the income for each future  year, is reduced to present value. Then these sums  for each of the future years are added up.”  

26. Decisions of English, Australian, Canada, U.S.A., Switzerland as also  

the Netherland Courts were liberally applied.   The learned Judge applied  

Mallet case (supra) in the Indian context and the decisions of the different  

High Courts where principles were either applied taking into consideration  

the rate of interest, inflation etc   There has been no decision rendered either  

by the High Court or this Court as to what is the real rate of interest which  

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would be appropriate in India and what multiplier should be applied in this  

country.    

27. We may at this juncture refer back to Mallet case (supra).  We may at  

once notice the formula applied therein which is to the following effect :-   

S.No. Year Capital Formula 1. 1st year 0 150 x 12 = 1800 2. 2nd year 1800 1800x1.045-100= 1781 3. 3rd year 1781 1761.14 4. 4th year 1761.14 1740.39 5. 5th year 1740.39 1718.71 6. 6th year 1718.71 1596.05 7. 7th year 1596.05 1672.37 8. 8th year 1672.37 1647.62 9. 9th year 1647.62 1621.76 10. 10th year 1621.76 1594.74 11. 11th year 1594.74 1800x1.045-

200=1566.51 12. 12th year 1466.51 1382.50 13. 13th year 1332.50 1192.46 14. 14th year 1192.46 1046.13 15. 15th year 1046.46 893.20 16. 16th year 893.20 733.40 17. 17 year 733.40 566.40 18. 18th year 566.40 391.89 19. 19th year 391.89 209.52 20. 20th year  209.52 18.95

Lord Diplock observed :-

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“The starting point in any estimate of the amount  of  the  "dependency"  is  the  annual  value  of  the  material  benefits provided for the dependants out  of the earnings of the deceased at the date of his  death. But, quite apart from inflation with which I  have already dealt,  there are many factors which  might  have  led  to  variations  up  or  down in  the  future. His earnings might have increased and with  them  the  amount  provided  by  him  for  his  dependants.  They  might  have  diminished  with  a  recession in trade or he might have had spells of  unemployment.  As  his  children  grew  up  and  became independent the proportion of his earnings  spent on his dependants would have been likely to  fall. But in considering the effect to be given in the  award  of  damages  to  possible  variations  in  the  dependency there  are two factors  to  be borne in  mind.  The  first  is  that  the  more  remote  in  the  future is the anticipated change the less confidence  there can be in the chances of its occurring and the  smaller  the  allowance  to  be  made  for  it  in  the  assessment. The second is that as a matter of the  arithmetic of the calculation of present value, the  later  the  change  takes  place  the  less  will  be  its  effect  upon the total  award of  damages.  Thus at  interest rates of 4 1/2 per cent. the present value of  an annuity for 20 years, of which the first ten years  are at £100 per annum and the second ten years at  £200 per annum, is about 12 years' purchase of the  arithmetical  average annuity of £150 per  annum,  whereas if the first ten years are at £200 per annum  and the second ten years at  £100 per annum the  present  value  is  about  14  years'  purchase  of  the  arithmetical mean of £150 per annum. If therefore  the chances of variations in the "dependency" are  to  be  reflected  in  the  multiplicand  of  which  the  years' purchase is the multiplier, variations *178 in  the  dependency  which  are  not  expected  to  take  place  until  after  ten  years  should  have  only  a  relatively small effect in increasing or diminishing  

27

the "dependency" used for the purpose of assessing  the damages.”

28. We may also notice a later decision of House of Lords in  Wells  v.  

Wells [  [1998]  3  W.L.R.  329  ].   It  was  a  case  where  the  plaintiff  had  

sustained serious injuries classified as injuries of maximum severities.  The  

question before the House was whether a lump-sum award could be made  

which takes into account all of the elements of future loss as well as the loss  

for the past.  It was opined that index linked government securities should be  

accepted as the best guide to calculate the appropriate discount rate.  Lord  

Hope of Craighead supplemented the reasonings of Denning, L.J., stating :-

“Some of the assumptions which have to be made  in  the assessment  of  future  loss are  made at  the  stage of arriving at the multiplicand for each head  of the claim. The selection of the right multiplier  requires that further assumptions be made, so that  the calculation can be related to the period of the  annual loss or expense which is to be compensated  for. The general point of principle which is raised  in all three cases relates to the final  stage in the  selection of the multiplier. This is the choice of the  interest rate, which represents the discount for the  payment  now of  a  lump sum to  compensate  for  loss to be sustained over a period of years in the  future.

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The measure of the discount is the rate of return  which can reasonably be expected on that sum if  invested in such a way as to enable the plaintiff to  meet  the  whole  amount  of  the  loss  during  the  entire period which has been assumed for it by the  expenditure of income together with capital. It was  suggested for the defendants in the course of the  argument  that  the  plaintiff  was  under  a  duty  to  minimise the loss to be borne by the defendants by  investing  the  lump sum prudently,  that  is  to  say  with a view to obtaining a reasonable return for it.  The duty to invest prudently was an important part  of the reasoning which was designed to show that  this meant a duty to invest in equities, and that the  discount rate to be applied was that appropriate to  the return to be expected on equities. But I do not  think that the duty to minimise loss has anything to  do with the selection of the appropriate  discount  rate. The stage at which the duty to minimise loss  is  to  be applied  is  at  the  earlier  stage  when the  court has to identify the amount of the annual sum  to be compensated for and the period over which it  is  to  be  compensated.  That  exercise  is  over  and  done with when the time comes to select and apply  the discount rate.”

It was furthermore observed :-

“There is much to be said for the view that a better  return  can  be  obtained  by  the  ordinary  investor  who invests  his  money in equities.  But  the rises  and  falls  in  the  market  value  of  equities  are  unpredictable both as to their timing and as to their  amount. Further problems are presented by the cost  of investment advice and by the possible impact of  capital gains tax if reliance has to be placed on the  capital gains which can be achieved to deal with  

29

inflation and to supplement the income return by  way  of  dividend.  Moreover  the  plaintiff  who  is  receiving the amount of his future loss in the form  of  a  lump sum is  not  an  ordinary  investor.  The  amount awarded under each head of his claim is  calculated on the assumption that this part of his  loss will have to be met entirely out of the relevant  portion of the lump sum.”

29. The  Parliament  enacted  the  Actuaries  Act,  2006.   However,  its  

activities are little known.  We do not know whether any Actuarial Society  

has  come into  effect.   It  is  also  not  clear  what  sort  of  service  is  being  

rendered  by  it.   Not  much  assistance,  therefore,  can  be  derived  from  

referring  to  the  said  Act  to  which  our  attention  has  been drawn by Mr.  

Nanda.

30. Indisputably, grant of compensation involving an accident is within  

the  realm of  law of  torts.   It  is  based  on  the  principle  of  restitution  in  

integrum.   The said principle provides that a person entitled to damages  

should, as nearly as possible, get that sum of money which would put him in  

the same position as he would have been if he had not sustained the wrong.  

[See Livingstone  v.  Rawyards Coal Co.  [ (1880) 5 AC 25 ].   

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31. The accident may result in death ; it may result in injuries which may  

be of  different  counts.   When a death occurs  the benefit  accruing to the  

dependent must be taken into account ; the balance of loss and gain to him  

must be ascertained ; the position of each dependent in each case may have  

to be considered separately  [  See  Davis  v.   Powell  Duffrya Associated  

Collieries Ltd.  [ 1942) AC 601 ]..  The said principle has been applied by  

this Court  in  Gobald  Motor  Service  Ltd.,  Allahabad  v.  R.M.K.  

Veluswami, [ AIR 1962 SC 1 ] as also in Susamma Thomas  (supra)  

32. The heads of pecuniary loss are basically two.  One, loss of earnings  

upto the date of trial and the other, loss of future earnings.  Principally we  

are concerned with the second issue herein.  For calculating future earning,  

the following factors are taken into consideration:-

(i) interest method ;

(ii) lump sum method ; and

(iii) multiplier method.

Whereas in the first and third method, interest method for all intent  

and purport has not been applied in India.  Multiplier method was applied as  

a mode of estimating the present value as a loss of benefit to the dependent  

in Davis (supra) wherein it was observed:  

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“ In the case of the appellant, Mrs. Williams, I  think the judge has awarded a wholly inadequate  sum.  There  is  no question here  of  what  may be  called  sentimental  damage,  bereavement  or  pain  and  suffering.  It  is  a  hard  matter  of  pounds,  shillings  and  pence,  subject  to  the  element  of  reasonable future probabilities.  The starting point  is  the amount of  wages which the  deceased was  earning, the ascertainment of which to some extent  may depend on the regularity of his employment.  Then  there  is  an  estimate  of  how  much  was  required  or  expended  for  his  own  personal  and  living expenses. The balance will give a datum or  basic figure which will generally be turned into a  lump  sum by  taking  a  certain  number  of  years'  purchase.  That  sum,  however,  has  to  be  taxed  down by  having  due  regard  to  uncertainties,  for  instance, that the widow might have again married  and thus  ceased  to  be  dependent,  and other  like  matters of speculation and doubt. It seems as if the  award of 250l. was based on something like three- and-a-half years' purchase of the basic figure. This  appears to me to be out of all proportion and much  too low. I should, after allowing for all reasonably  probable  chances  of  the  diminution  of  the  loss,  accept the figure taken by Luxmoore L.J. of 750l.  as  being  not  unfair,  and  I  should  increase  the  damages  recoverable  by  the  appellant,  Mrs.  Williams,  accordingly.  In  that  respect  I  should  allow her appeal.”

The  said  principle  was  reiterated  in  Nance  v.   British  Columbia  

Electric Railway Co, Ltd. { 1951 AC 601 } wherein it was observed :-

“ The  claim to  damages  in  the  present  case  falls  under  two  separate  heads.  First,  if  the  

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deceased had not been killed, but had eked out the  full  span  of  life  to  which  in  the  absence  of  the  accident he could reasonably have looked forward,  what sums during that period would be probably  have applied out of his income to the maintenance  of  his  wife  and family?  (Under  this  head in  the  present  case  the  wife  or  widow  need  alone  be  considered,  since  his  children  and  step-children  were all adults and self supporting, and at the time  of  his  death  he  contributed  nothing  material  to  their  maintenance.)  Secondly,  in  addition  to  any  sum arrived at under the first head, the case has  been argued on the assumption,  common to both  parties,  that  according  to  the  law  of  British  Columbia  it  would  be  proper  to  award  a  sum  representing such portion of any additional savings  which he would or might have accumulated during  the period for which, but for his accident, he would  have lived, as on his death at the end of this period  would  probably  have  accrued  to  his  wife  and  family  by  devolution  either  on  his  intestacy  or  under his will, if he made a will.”  

33. An element of sentiment of the deceased was also introduced while  

determining compensation  payable  to  the  dependent.   One of  the  factors  

which had been taken into consideration in Davis (supra) was that the widow  

might  be again married and ceases to be dependent;  in India,  we cannot  

proceed on such presumption.   

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34. In  the  Indian  context  several  other  factors  should  be  taken  into  

consideration including education of the dependents and the nature of job.  

In  the  wake  of  changed  societal  conditions  and  global  scenario,  future  

prospects may have to be taken into consideration not only having regard to  

the  status  of  the  employee,  his  educational  qualification;  his  past  

performance but also other relevant factors, namely – the higher salaries and  

perks which  are being   offered by the private companies these days.  In fact  

while  determining  the  multiplicand  this  Court  in  Oriental  Insurance  

Company Ltd.   v.  Jashuben and others,_[ (2008) 4 SCC 162 ] held that  

even  dearness  allowance  and  perks  with  regard  thereto  from  which  the  

family  would  have  derived  monthly  benefit,  must  be  taken  into  

consideration.  

35. One  of  the  incidental  issues  which  has  also  to  be  taken  into  

consideration is inflation.   

36. Is the practice of taking inflation into consideration wholly incorrect?  

Unfortunately, unlike other developed countries in India there has been no  

scientific  study.   It  is  expected  that  with  the  rising  inflation  the  rate  of  

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interest would go up.  In India it does not happen.  It, therefore, may be a  

relevant factor which may be taken into consideration for determining the  

actual ground reality.  No hard and fast rule, however, can be laid down  

therefor.   

37. A large number of English decisions have been placed before us by  

Mr. Nanda to contend that inflation may not be taken into consideration at  

all.  While the reasonings adopted by the English courts and its decisions  

may not be of much dispute, we cannot blindly follow the same ignoring  

ground realities.  

38. We have noticed the precedents operating in the field as also the rival  

contentions raised before us by the learned counsel for the parties with a  

view to show that law is required to be laid down in clearer terms.  The  

Second Schedule refers to Section 163-A of the 1988 Act, which, as noticed  

hereinbefore, provides for quantum of compensation to a third party in case  

of fatal accident or injuries suffered.  It provides for a table.  It specifies the  

amount required to be paid to the legal heirs/representatives of the deceased  

in the case of fatal accident and the claimants in the case of injuries suffered  

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by them depending upon his age and annual income as specified therein.  

The question which arises for consideration is as to whether the multiplier  

specified in the second schedule should be taken to be a guide for calculation  

of amount of compensation payable in a case falling under Section 166 of  

the 1988 Act?   

39. We have noticed hereinbefore that in  Patricia Jean Mahajan (supra)  

and Abati Bezbaruah and the other cases following them multiplier specified  

in the Second Schedule has been taken to be guiding factor for calculation of  

the amount of compensation even in a case under Section 166 of the Act.  

However, in Shanti Pathak (supra) this Court advocated application of lesser  

multiplier, although no legal principle has been laid therein.  

40. In Trilok Chandra (supra) this Court has pointed out certain purported  

calculation mistakes in the Second Schedule.  It, however, appears to us that  

there  is  no  mistake  therein.   Amount  of  compensation  specified  in  the  

Second  Schedule  only  is  required  to  be  paid  even  if  a  higher  or  lower  

amount can be said to be the quantum of compensation upon applying the  

multiplier system.   

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41. Section 163-A of the 1988 Act does not speak of application of any  

multiplier.  Even the Second Schedule, so far as the same applies to fatal  

accident, does not say so.  The multiplier, in terms of the Second Schedule,  

is  required  to  be  applied  in  a  case  of  disability  in  non  fatal  accident.  

Consideration for payment of compensation in the case of death in a ‘no  

fault liability’ case vis-à-vis the amount of compensation payable in a case  

of permanent total disability and permanent partial disability in terms of the  

Second Schedule is to be applied by different norms.  Whereas in the case of  

fatal accident the amount specified in the Second Schedule depending upon  

the age and income of  the  deceased is  required  to  be paid  wherefor  the  

multiplier is not to be applied at all but in a case involving permanent total  

disability  or  permanent  partial  disability  the  amount  of  compensation  

payable is required to be arrived at by multiplying the annual loss of income  

by  the  multiplier  applicable  to  the  age  of  the  injured  as  on  the  date  of  

determining  the  compensation  and  in  the  case  of  permanent  partial  

disablement  such  percentage  of  compensation  which  would  have  been  

payable in the case of permanent total disablement as specified under item  

(a) of the Second Schedule.  

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42. The Parliament in its wisdom thought to  provide for a higher amount  

of compensation in case of permanent total disablement and proportionate  

amount of compensation in case of permanent partial disablement depending  

upon the percentage of disability.   

43. Thus,  prima  facie,  it  appears  that  the  multiplier  mentioned  in  the  

Second Schedule, although in a given case, may be taken to be a guide but  

the  same  is  not  decisive.   To  our  mind,  although a  probable  amount  of  

compensation as specified in the Second Schedule in the event the age of  

victim is 17 or 20 years and his annual income is Rs.40,000/-, his heirs/ legal  

representatives  is  to  receive  a  sum  of  Rs.7,60,000/-,  however,  if  an  

application for grant of compensation is filed in terms of Section 166 of the  

1988 Act that  much amount may not be paid, although in the former case  

the amount of compensation is to be determined on the basis of ‘no fault  

liability’ and in the later on ‘fault liability’  In the aforementioned situation  

the Courts, we opine, are required to lay down certain principles.   

44. We are not unmindful of the Statement of Objects and Reasons to Act  

54  of  1994  for  introducing  Section  163-A  so  as  to  provide  for  a  new  

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predetermined  formula  for  payment  of  compensation  to  road  accident  

victims on the basis of age/income, which is more liberal and rational.  That  

may be so, but it defies logic as to why in a similar situation, the injured  

claimant or his heirs/legal representatives, in the case of death, on proof of  

negligence on the part of the driver of a motor vehicle would get a lesser  

amount than the one specified in the Second Schedule.  The Courts, in our  

opinion, should also bear that factor in mind.   

45. Having regard to divergence of opinion and this aspect of the matter  

having  not  been  considered  in  the  earlier  decisions,  particularly  in  the  

absence  of  any  clarification  from  the  Parliament  despite  the  

recommendations made by this Court in Trilok Chandra (supra), the issue, in  

our opinion, shall be decided  by a Larger Bench.  It is directed accordingly.  

46. The Registry is directed to place the matter before the Hon’ble Chief  

Justice of India for appropriate orders for constituting a Larger Bench.

………………………..J. [S.B. Sinha]

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………………………..J.            [Cyriac Joseph]

New Delhi July 23, 2009

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