Supreme Court: The Division Bench of S. Abdul Nazeer* and Krishna Murari, JJ., held that neither the percentage of deduction for personal expenses be governed by a rigid rule or formula of universal application nor does it depends upon the basis of relationship of the claimant with the deceased.
Passing a landmark decision, the Bench granted compensation to mother-in-law of the deceased considering her to be of the dependents of the deceased. The Bench remarked,
“It is not uncommon in Indian Society for the mother-in-law to live with her daughter and son-in-law during her old age and be dependent upon her son-in-law for her maintenance.”
Through the impugned judgment, the High Court of Kerala had scaled down the amount of compensation payable to the appellants and thereby modified the award passed by the Motor Accident Claims Tribunal.
Factual Matrix
The appellants had filed the claim petition before the Tribunal seeking compensation on account of the death of one N. Venugopalan Nair in a motor vehicle accident. Noticing that the deceased had four dependants, the Tribunal awarded a total sum of Rs.73,18,971 towards loss of dependency making the total sum Rs.74,50,971 towards compensation with interest at 7.5 per cent per annum.
In appeal the High Court held that the appellant 4, i. e. mother-in-law of the deceased was not a legal representative of the deceased. Similarly, without denying the fact that the deceased was a meritorious person who possessed the qualification of M.Sc. M.Phil and was availing the monthly salary of Rs.83,831, the High Court took the monthly income of the deceased as Rs.40,000/for the purpose of calculation of loss of dependency opining that the deceased was aged 52 years at the time of the accident, hence he would not have earned the same monthly income after his retirement.
Accordingly, the High Court awarded compensation of Rs.23,65,728 towards loss of dependency for preretiral period and a sum of Rs.22,40,000 towards loss of dependency for postretiral period. In total, a sum of Rs.48,39,728 was awarded as compensation by the High Court.
Observation and Analysis
Whether the High Court was justified in precluding the mother-in-law of the deceased as his legal representative?
The MV Act does not define the term ‘legal representative’. Generally, ‘legal representative’ means a person who in law represents the estate of the deceased person and includes any person or persons in whom legal right to receive compensatory benefit vests. A ‘legal representative’ may also include any person who intermeddles with the estate of the deceased; such person does not necessarily have to be a legal heir. Hence, the Bench observed,
“In our view, the term ‘legal representative’ should be given a wider interpretation for the purpose of Chapter XII of MV Act and it should not be confined only to mean the spouse, parents and children of the deceased.”
Opining that the As MV Act is a benevolent legislation, therefore, it calls for a liberal and wider interpretation to serve the real purpose underlying the enactment and fulfil its legislative intent, the Bench held that in order to maintain a claim petition, it is sufficient for the claimant to establish his loss of dependency.
Reliance was placed on Gujarat SRTC v. Ramanbhai Prabhatbhai, (1987) 3 SCC 234, by the Bench, wherein it had been held that, “We should remember that in an Indian family brothers, sisters and brothers’ children and sometimes foster children live together and they are dependent upon the breadwinner of the family and if the breadwinner is killed on account of a motor vehicle accident, there is no justification to deny them compensation relying upon the provisions of the Fatal Accidents Act, 1855.”
Hence, considering that the mother-in-law of the deceased was staying with the deceased and his family members since a long time and was dependent on him for her shelter and maintenance, the Bench held that she might not be a legal heir of the deceased, but she certainly suffered on account of his death. Therefore, the Bench declared that she was a “legal representative” under Section 166 of the MV Act and was entitled to maintain a claim petition.
Whether the High Court was justified in applying a split multiplier?
The deceased was aged 52 years at the time of the accident and was working as an Assistant Professor on a monthly salary of Rs.83,831. Considering that the deceased was a Selection Grade Lecturer in Mathematics and was a subject expert, the Bench stated that evidence on record also shows that there is acute shortage of lecturers in Mathematics for appointment in colleges and retired Mathematics Professors are appointed in so many colleges.
“It is common knowledge that the teachers, especially Mathematics teachers, are employed even after their retirement in coaching centers. They may also hold private tuition classes. This would increase their income manifold after retirement.”
In the above backdrop, the Bench rejected the findings of High Court that the deceased’s income would necessarily reduce after his retirement, the Bench held that at the time of calculation of the income, the Court has to consider the actual income of the deceased and addition should be made to take into account future prospects. Accordingly, it was held that the High Court was not justified in applying split multiplier in the instant case by bifurcating the deceased’s income as pre- retirement and post-retirement.
What is the amount of compensation that should be awarded to the appellants?
The deceased was aged 52 years at the time of his death and had a permanent job. The annual income of the deceased was Rs.10,00,572, which after income tax deduction came to Rs.8,87,148.
Relying on the decision in National Insurance Company Limited v. Pranay Sethi, (2017) 16 SCC 680, the Bench added additional 15% of his actual salary towards future prospectus, which made the actual salary of the deceased as Rs.1,33,072.
Since the deceased was 52 years at the time of his death, the applicable multiplier was ‘11’. Similarly, considering that he had four dependants, following compensation was granted to the dependants: (i) Towards Loss of dependency Rs.84,16,815 ( ii) Loss of Estate Rs.16,500 iii) Funeral Expenses Rs.16,500 (iv) Spousal Consortium Rs.44,000 ( v) Parental Consortium Rs.88,000. Total Rs.85,81,815 was granted as compensation along with interest at the rate of 7.5% per annum.
[N. Jayasree v. Cholamandalam Ms General Insurance Company Ltd., 2021 SCC OnLine SC 967, decided on 25-10-2021]
Kamini Sharma, Editorial Assistant has put this report together
Appearance by:
For the Appellants: Adv. Seshatalpa Sai Bandaru
For the Respondents: Adv. Chander Shekhar Ashri
*Judgment by: Justice S. Abdul Nazeer