How to decide a claim petition wherein Fatal Injuries were sustained by the deceased:

 

How to decide a claim petition wherein Fatal Injuries were

sustained by the deceased:

In Sarla Verma v/s Delhi Transport Corporation, reported in 2009

ACJ 1298 (SC) = AIR 2009 SC 3104 guidelines for determination

of multiplier, future prospects of the deceased, deduction towards

personal and living expenditures are issued. The ratio laid down in

the case of Sarla Verma (supra) was considered by the Three

Hon'ble Judges of the Hon'ble Apex Court in the case of Reshma

Kumari v/s Madan Mohan, reported in 2013 ACJ 1253 (SC) and it

is held that ratio laid down in the case of Saral Verma (supra)

should be followed by the all the Tribunals. The principles laid

down in the case of Srala Veram and Reshma Kumari (supra) qua

determination of multiplier, future prospects of the deceased,

deduction towards personal and living expenditures are as under:a)

Choice of Multiplier:Age

of the Deceased Multiplier

Upto 15 years 15

15 to 20 years 18

21 to 25 years 18

26 to 30 years 17

31 to 35 years 16

36 to 40 years 15

41 to 45 years 14

46 to 50 years 13

51 to 55 years 11

56 to 60 years 9

61 to 65 years 7

Above 65 years 5

 

b) What should be the multiplier in the case of Fatal injury

case, where deceased was unmarried son/daughter:There

are difference of opinion as to what should be the

multiplier in the case of fatal injury case, where deceased was

unmarried son/daughter. In Shyam Singh, reported in 2011 (7)

SCC 65 = 2011 ACJ 1990 (SC), it has been held that Multiplier

in the case of death of unmarried son/daughter, proper

multiplier should be arrived at by assessing average age of

parents of the deceased. But different views are taken by

Hon'ble Apex Court in the cases of P. S. Somnathan v/s Dist.

Insurance Officer, reported in 2011 ACJ 737 (SC), Amrit Bhanu

Shali v/s NI Com., reported in 2012 ACJ 2002 (SC), Saktidevi

v/s NI Com, reported in 2010 (14) SCC 575 and Reshma

Kumari v/s Madan Mohan, reported in 2013 ACJ 1253 (SC)

and lastly Hon'ble Constitutional Bench, in the case of N.I.Com

Ltd v/s Pranay Sethi, reported in 2017 (3) GLH 536 = AIR

2017 SC 5157. In the above referred cases it has been held that

in the case of death of unmarried son/daughter, multiplier

should be applied on the basis of age of the deceased and not

on the basis of average age of the parents of the deceased.

c) Future Prospect of Deceased:In

para No.11 of the Sarla Verama's (supra) judgment it is held

as under:“

In view of imponderables and uncertainties, we are in

favour of adopting as a rule of thumb, an addition of 50% of

actual salary to the actual salary income of the deceased

towards future prospects. where the deceased had a

permanent job and was below 40 years. [Where the annual

income is in the taxable range, the words 'actual salary'

should be read as 'actual salary less tax']. The addition

should be only 30% if the age of the deceased was 40 to 50

years. There should be no addition, where the age of

deceased is more than 50 years. Though the evidence may

indicate a different percentage of increase, it is necessary to

standardize the addition to avoid different yardsticks being

applied or different methods of calculations being adopted.

Where the deceased was self employed or was on a fixed

salary (without provision for annual increments etc.), the

courts will usually take only the actual income at the time of

death. A departure therefrom should be made only in rare

and exceptional cases involving special circumstances”.

4.2 In the case of Sanjay Verma v/s Haryana Roadways, reported in

2014 (3) SCC 210, a threejudges

Bench of Hon'ble Apex court,

after considering the ratio laid down in the case of Reshma Kumari

(supra) has held in para No.15 as under:15:

Answering the above reference a three Judge Bench of

this Court in Reshma Kumari v/s Madan Mohan (2013) 9

SCC 65 (para 36) reiterated the view taken in Sarla Verma

(supra) to the effect that in respect of a person who was on

a fixed salary without provision for annual increments or

who was self employed the actual income at the time of

death should be taken into account for determining the loss

of income unless there are extraordinary and exceptional

circumstances. Though the expression “exceptional and

extraordinary circumstances” is not capable of any precise

definition, in Shakti Devi v/s New India Insurance Company

Limited (2010) 14 SCC 575 there is a practical application

of the aforesaid principle. The near certainty of the regular

employment of the deceased in a government department

following the retirement of his father was held to be a valid

ground to compute the loss of income by taking into account

the possible future earnings. The said loss of income,

accordingly, was quantified at double the amount that the

deceased was earning at the time of his death.

4.3 Even in para No.13 of the above referred judgment it is observed

as under:“

13. The view taken in Santosh Devi (supra) has been

reiterated by a Bench of three Judges in Rajesh and Others

vs. Rajbir Singh and Others[(2013) 9 SCC 54] by holding

as follows :

“8. Since, the Court in Santosh Devi case actually intended

to follow the principle in the case of salaried persons as laid

down in Sarla Verma case and to make it applicable also to

the selfemployed and persons on fixed wages, it is clarified

that the increase in the case of those groups is not 30%

always; it will also have a reference to the age. In other

words, in the case of selfemployed or persons with fixed

wages, in case, the deceased victim was below 40 years,

there must be an addition of 50% to the actual income of

the deceased while computing future prospects. Needless to

say that the actual income should be income after paying the

tax, if any. Addition should be 30% in case the deceased was

in the age group of 40 to 50 years.

 

 

9. In Sarla Verma case, it has been stated that in the case of

those above 50 years, there shall be no addition. Having

regard to the fact that in the case of those selfemployed

or on fixed wages, where there is normally no age of

superannuation, we are of the view that it will only be just

and equitable to provide an addition of 15% in the case

where the victim is between the age group of 50 to 60 years

so as to make the compensation just, equitable, fair and

reasonable. There shall normally be no addition thereafter.”

4.4 In the case of Munna Lal Jain v. Vipin Kumar Sharma, reported

in AIR 2015 SC (Supp) 1130, after referring to the ratio laid down

in the case of Rajesh and others v. Rajbir Singh (supra) has held

that parents of the selfemployed, Pandit are entitled to get amount

of compensation calculated on the basis of the future prospect of

the deceased.

4.5 From the above referred observations, it becomes clear that

where the deceased had a permanent job and in other cases, where

it is proved that there was scope for the increase in the income of

the deceased, addition, varying from 50% to 15% may be made,

depending on the age of the deceased. Addition should be 50% and

if the age of the deceased was between 40 to 50 years, addition

should be only 30% and an addition of 15% in the case where the

deceased was between the age group of 50 to 60 years.

4.6 However, it is also required to be noted that issue with respect to

assessment of compensation on the basis of future prospect income

has been referred to the Larger Bench. Please refer to the ratio laid

down by Hon'ble Apex Court in the cases of National Insurance

Company Ltd. v. Pushpa, reported in (2015) 9 SCC 166 and

Shashikala v/s Gangalakshmamma, reported in 2015 ACJ 1239

(SC).

4.7 Hon'ble Supreme Court in the case N.I. Com v/s. Pranay Sethi,

(supra) has held in para 61 as under:61.

In view of the aforesaid analysis, we proceed to record

Ourconclusions:                                                                                            (i) The twoJudge Bench in Santosh Devi should have been

well advised to refer the matter to a larger Bench as it

was taking a different view than what has been stated in

Sarla Verma, a judgment by a coordinate Bench. It is

because a coordinate Bench of the same strength cannot

take a contrary view than what has been held by another

coordinate Bench.

(ii) As Rajesh has not taken note of the decision in Reshma

Kumari, which was delivered at earlier point of time, the

decision in Rajesh is not a binding precedent.

(iii) While determining the income, an addition of 50% of

actual salary to the income of the deceased towards

future prospects, where the deceased had a permanent

job and was below the age of 40 years, should be made.

The addition should be 30%, if the age of the deceased

was between 40 to 50 years. In case the deceased was

between the age of 50 to 60 years, the addition should be

15%. Actual salary should be read as actual salary less

tax.

(iv) In case the deceased was selfemployed

or on a fixed

salary, an addition of 40% of the established income

should be the warrant where the deceased was below the

age of 40 years. An addition of 25% where the deceased

was between the age of 40 to 50 years and 10% where

the deceased was between the age of 50 to 60 years

should be regarded as the necessary method of computation.

 The established income means the income minus the tax

component.

(v) For determination of the multiplicand, the deduction for

personal and living expenses, the tribunals and the courts

shall be guided by paragraphs 30 to 32 of Sarla Verma

which we have reproduced hereinbefore.

(vi) The selection of multiplier shall be as indicated in the

Table in Sarla Verma read with paragraph 42 of that

judgment.

(vii) The age of the deceased should be the basis for

applying the multiplier.

(viii) Reasonable figures on conventional heads, namely,

loss of estate, loss of consortium and funeral expenses

should be Rs. 15,000/, Rs. 40,000/and Rs. 15,000/respectively.

The aforesaid amounts should be enhanced at the rate of 10% in every three years.

Therefore, in view of the judgment reported in the case of

Parany Sethi (supra), all the Courts are required to be follow the

directions contained under para 61 of the said judgment.

4.7.1.Ratio laid down in the case of Pranay Sethi will apply

retrospectively.

2019 ACJ 65 (HP) – OI Com. V/s. Mathu Ram

4.8 It is also required to be noted that House Rent Allowance, Medical

Allowance, Dearness Allowance, Dearness Pay, Employees

Provident Fund, Government Insurance Scheme, General Provident

Fund, C.C.A. etc should be treated as part and parcel of the income

of the deceased, while calculating income of the deceased for the

purpose of computing compensation. Reference may be made to

ratio laid down by Hon'ble Apex Court in the case of Sunil Sharma

v/s Bachitar Singh, reported in 2011 ACJ 1441 (SC) also see Vimal

Kanwar v/s Kishore Dan, reported in 2013 ACJ 1441.

4.9 When notional income of the deceased is taken into consideration

for the assessment of the compensation, whether in such situation,

future prospect of the deceased can be taken into consideration. HeldYes.

refer to the ratio laid down by Hon'ble Apex Court in case of V. Mekala v/s. Malathi, reported in 2014 ACJ 1441 (SC) and also case reported in 2016 ACJ 2742 (Ker).

4.9.1 Hon'ble Supreme Court in the case of Sunita Tokas v/s. New India

Insurance Com. Ltd, AIR 2019 SC 3921 = 2019 (20) SCC 688 has

held that even in the case where notional income has been taken

into account for calculation of amount of compensation, future

prospect of the deceased shall be taken into consideration.

4.9.1.1 Similar view has been taken in the case of Rajendra Singh v/s.

N.I.Com., AIR 2020 SC 595.

4.9.1.2 Similar view has been taken by the Full Bench of Hon'ble

Supreme Court in the case of Kirti v/s. Oriental Insurance Com.,

ACJ 2021 1 (SC) (FB)also see Meena Pawaia v/s. Ashraf Ali, 2022

ACJ 528 (SC).

4.9.1.3 The amount of compensation has to be decided in one go and

while passing the future eventualities, same shall be taken into

consideration at the time of deciding claim petition.

 

1HDFC Ergo General Insu Com. V/s. Mukesh Kumar, 2021 ACJ 2665

(SC)

d) Deduction towards Personal and Living Expenditures:4.10

In the case of Pranay Sethi (supra) Hon'ble Supreme Court has held

in para No.61 (v) that, for determination of the multiplicand, the

deduction for personal and living expenses, the tribunals and the

courts shall be guided by paragraphs 30 to 32 of Sarla Verma which

we have reproduced hereinbefore.

4.11 In the case of Sarla Veram's case (supra) it is held as under:“

Having considered several subsequent decisions of this court, we

are of the view that where the deceased was married, the deduction

towards personal and living expenses of the deceased, should be

onethird

(1/3rd) where the number of dependent family members

is 2 to 3, onefourth

(1/4th) where the number of dependent

family members is 4 to 6, and onefifth

(1/5th) where the number

of dependent family members exceed six”.

4.12 It is further held in the case of Sarla Verma (supra) as under:“

Where the deceased was a bachelor and the claimants are the

parents, the deduction follows a different principle. In regard to

bachelors, normally, 50% is deducted as personal and living

expenses, because it is assumed that a bachelor would tend to

spend more on himself. Even otherwise, there is also the possibility

of his getting married in a short time, in which event the

contribution to the parents and siblings is likely to be cut

drastically”.

4.13 Meaning thereby, the deduction towards personal and living

expenses of the deceased, should be one third (1/3rd) where the

number of dependent family members is less than 3, onefourth

(1/4th) where the number of dependent family members is 4 to 6,

and one fifth (1/5th) where the number of dependent family

members exceed six. And in the cases where deceased was

unmarried son/daughter, the deduction towards personal and

living expenses of the deceased, should be one half.