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MAC. APP. No.503/2011
Page 1 of 5 $~17 * IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision:19th July, 2012
+ MAC. APP. No.503/2011
USHA GROVER & ORS.
..... Appellant Through: Mr.Kundan Kumar Lal, Advocate
Versus
HDFC ERGO GENERAL INSURANCE CO. LTD. & ORS.
..... Respondents Through: Ms. Neerja Sachdeva, Advocate for the Respondent 1 Insurance Company.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
J U D G M E N T
G. P. MITTAL, J. (ORAL)
The Appeal is for enhancement of compensation of `9,73,176/- awarded for the death of Bhim Sain Grover who died in a motor vehicle accident which occurred on 13.03.2010. 2. The finding on negligence reached by the Motor Accident Claims Tribunal(the Claims Tribunal) is not challenged by any of the Respondents. Thus, the same has attained finality. 3. During inquiry before the Claims Tribunal, it was proved that
MAC. APP. No.503/2011
Page 2 of 5 the deceased Bhim Sain Grover was working as Chief Manager in Senior Management Scale Grade IV in Service Branch of State Bank of Patiala. At the time of his death, he was drawing a gross salary of `44,994/- which was retrospectively increased to `55,624/- on account of revision of pay as per bipartite settlement and the deceased was paid arrears of `2,25,250.42P. The deceased was aged more than 59 years and was about to retire in four months. The Claims Tribunal, therefore, awarded a compensation of `1,79,976/- on the basis of the deceased’s salary at the time of his death and then granted the loss of dependency on the minimum wages of a graduate by applying a multiplier of ‘9’. 4. It is urged by the learned counsel for the Appellant that retired bank officers at senior positions have very good future prospects in non-banking financial companies as well as in multinational companies. The deceased would have got employment on a much better salary after the age of his superannuation. It is contended that the Claims Tribunal was not entitled to take a split multiplier till the date of retirement on the basis of the salary drawn by him in State Bank of Patiala and on the minimum wages of a graduate after the date of superannuation. Reliance is placed on K.R. Madhusudhan & Ors. v. Administrative Officer and Anr., (2011) 4 SCC 689. 5. In K.R. Madhusudhan & Ors.(supra), the High Court had applied a split multiplier i.e. one till the age of superannuation and the other since the age of superannuation. The Supreme
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Page 3 of 5 Court had deprecated the practice of applying the split multiplier. Paras 4, 5 and 14 of the report are extracted hereunder: “4. The deceased was of 53 years of age and was survived by his wife and three sons, the present appellants. They filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 claiming Rs.20,00,000/- as compensation. It was contested by the respondents.
Motor Accident Claims Tribunal (hereinafter “MACT”) found that the death of V. Rajagopalaiah was due to the rash and negligent driving of the van driver (the second respondent). The deceased was working as Senior Assistant in Karnataka Electricity Board (hereinafter “KEB”) and his last drawn gross monthly salary was Rs.15,642/- i.e. Rs.1,87,704/- annually. 1/3rd was deducted for personal expenses, after which the amount came to Rs.1,25,136/-. As deceased was 53 years of age, a multiplier of 11 was applied. The Tribunal also awarded funeral and transport expenses amounting to Rs.10,000/-, medical expenses prior to death was Rs.6,000 and compensation for loss and affection at Rs.25,000/-. Accordingly, total compensation awarded was Rs.14,27,496/- along with interest of 9% p.a. xxx
xxx
xxx
xxx 14. In view of this evidence the Tribunal should have considered the prospect of future income while computing compensation but the Tribunal has not done that. In the appeal, which was filed by the appellants before the High Court, the High Court instead of maintaining the amount of compensation, granted by the Tribunal, reduced the same. In doing so, the High Court had not given any reason. The High Court introduced the concept of split multiplier and departed from the
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Page 4 of 5 multiplier used by the Tribunal without disclosing any reason therefore. The High Court has also not considered the clear and corroborative evidence about the prospect of future increment of the deceased. When the age of the deceased is between 51 and 55 years the multiplier is 11, which is specified in the II Column in the II Schedule in the Motor Vehicles Act, and the Tribunal has not committed any error by accepting the said multiplier. This Court also fails to appreciate why the High Court chose to apply the multiplier of 6.”
The multiplier has to be applied on the multiplicant as per the actual income of the deceased at the time of his death (Sarla Verma & Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 121). The actual income of the deceased at the time of his death was `55,624/- as the pay was revised retrospectively and the arrears were paid to the legal representatives of the deceased. Thus, the Claims Tribunal was not justified in applying the split multiplier and reducing the multiplicand on the age of superannuation. Moreover, the deceased was working in a public sector bank. After his superannuation, he would have been entitled to pension @ 50% of his salary. If he would have sought any employment in any non-banking financial company he would also have got the salary which he was getting from State Bank of Patiala. The loss of dependency after making deduction towards Income Tax and applying a suitable multiplier comes to `34,52,928/-(`55,624/- x 12 – 92,000/-(Income Tax) x 2 ÷ 3 x 9). On addition of a notional sum of `25,000/- towards loss of love and affection and
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Page 5 of 5 `10,000/- each towards loss to estate, loss of consortium and funeral expenses, the overall compensation comes to `35,07,928/-. 7. The enhanced compensation of `25,34,752/- shall carry interest @ 7.5% per annum. The Respondent Insurance Company is directed to deposit the enhanced compensation with interest in the name of the Appellants with UCO Bank, Delhi High Court Branch within six weeks. 8. 40% of the enhanced compensation along with proportionate interest shall be payable to the Appellant No.2. Rest 60% shall be payable to the First Appellant. 9. 80% of the enhanced compensation shall be held in Fixed Deposit for a period of two years, four years, six years and eight years in equal proportion. Rest shall be released to the Appellants on deposit. 10. The Appeal is allowed in above terms. 11. Pending Applications stand disposed of.
(G.P. MITTAL) JUDGE JULY 19, 2012 pst