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Rebeka Minz And Others v. Divisional Manager, United India Insurance Company Limited And Another
Factual and Procedural Background
The deceased, aged 35, died on 4-1-1995 when the scooter he was riding (Registration No. OR 06 7703) was hit near Nalco Nagar on NH-42 by a truck (Registration No. ORA 4241) driven rashly and negligently. His wife and children (the appellants) filed MAC Case No. 21 of 1995 before the Motor Accidents Claims Tribunal, which awarded Rs 10,08,000 with 7% interest for specified periods.
Both sides appealed to the High Court of Orissa. The claimants (MACA No. 821/2007) sought a higher multiplier and interest; the insurer (MACA No. 953/2007) challenged the award itself. By order dated 5-3-2009 the High Court reduced the compensation to Rs 5,00,000 and lowered interest to 6% p.a., without giving reasons. The claimants alone appealed to the Supreme Court, resulting in the present judgment.
Legal Issues Presented
- Whether the High Court’s reduction of compensation and interest without assigning reasons was sustainable.
- What multiplier should be applied to compute compensation for a 35-year-old deceased under the prevailing jurisprudence on motor accident claims.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Santosh Devi v. National Insurance Co. Ltd., (2012) 6 SCC 421 | Approved application of the Sarla Verma multiplier table. | Relied on to reaffirm the use of the Sarla Verma formula for selecting a multiplier. |
| Sarla Verma v. DTC, (2009) 6 SCC 121 | Laid down a structured multiplier table based on age. | Bench applied the multiplier of 16 for the 31-35 age group as per this table. |
| Susamma Thomas, (1994) 2 SCC 176 | Earlier authority incorporated into the Sarla Verma table. | Referenced indirectly through the Sarla Verma formulation adopted by the Court. |
| Trilok Chandra, (1996) 4 SCC 362 | Contributed to development of the standardized multiplier method. | Referenced as part of the lineage of cases underpinning the Sarla Verma table. |
| Charlie, (2005) 10 SCC 720 | Another decision forming part of the multiplier evolution. | Referenced within the Sarla Verma-based analysis. |
Court's Reasoning and Analysis
The Supreme Court noted that the High Court’s order was “non-speaking,” giving no reasons for cutting compensation or interest, and thus warranted interference. Turning to the substantive issue, the Court observed that the only surviving question (since only claimants appealed) was the correct multiplier.
Following Santosh Devi and the structured table in Sarla Verma, the Court held that for a deceased aged 35 the appropriate multiplier is 16. The Tribunal had earlier fixed the annual contribution to the family at Rs 84,000 (Rs 7000 per month after deducting one-third personal expenses). Multiplying Rs 84,000 by 16, the Court recalculated the compensation at Rs 13,44,000.
The Court restored the original 7% interest rate, directing that interest run from the date of the claim application until realisation. It also directed the insurer to pay the balance (after crediting sums already paid) within three months, in the proportions specified by the Tribunal.
Holding and Implications
Appeals Allowed; Compensation Enhanced to Rs 13,44,000 with 7% Interest.
The High Court’s reduction was set aside for want of reasons. The Supreme Court reaffirmed the mandatory use of the Sarla Verma multiplier table, ensuring uniformity in motor-accident compensation calculations. No new legal principle was created, but the judgment underscores the necessity for reasoned orders by appellate courts and further solidifies the structured multiplier approach.
F.M Ibrahim Kalifulla, J.— These appeals at the instance of the claimants before the Motor Accidents Claims Tribunal challenge the common order of the High Court of Orissa, Cuttack dated 5-3-2009 passed in Rebeka Minz v. Gopal Pr. Sharma MACAs Nos. 821 and 953 of 2007. MACA No. 821 of 2007 was preferred by the appellants while MACA No. 953 of 2007 was preferred by the first respondent, Insurance Company in the High Court.
2. The husband of the first appellant died in an accident on 4-1-1995 when he was returning from the plant site on a scooter bearing Registration No. OR 06 7703 around 6.30 a.m near Nalco Nagar on NH 42 at a place called Smelter Chhak, due to rash and negligent driving of the driver of the truck bearing Registration No. ORA 4241. The appellants being the wife and children of the deceased preferred the claim before the Motor Accidents Claims Tribunal in MAC Case No. 21 of 1995. The Tribunal, after analysing the entire evidence placed before it, awarded a sum of Rs 10,08,000 as compensation along with interest @ 7% per annum with effect from 3-2-1995 to 22-8-1995 and again from 16-1-2007 till the payment within one month.
3. While the appellants were aggrieved insofar as the Tribunal applied the multiplier 12 instead of 17, having regard to the fact that the deceased at the time of his death was 35 years old as well as non-grant of interest for certain period, the first respondent was aggrieved by the very award of compensation itself. The High Court while disposing of the appeal reduced the compensation awarded by the Tribunal and also the rate of interest by holding as under:
“Considering the submissions of the learned counsel for the parties and keeping in view the findings of the learned Tribunal with regard to the quantum of compensation amount awarded and the basis on which the same has been arrived at, I feel, the interest of justice would be best served if the awarded compensation amount of Rs 10,08,000 is modified and reduced to Rs 5,00,000 which is payable to the claimants. The claimants are also entitled to interest @ 6% per annum from the date of the claim application, till deposit of the amount. The impugned award is modified to the said extent.
The appellant Insurance Company (in MACA No. 953 of 2007) is directed to deposit the modified compensation amount of Rs 5,00,000 along with interest @ 6% per annum from the date of filing of claim application with the learned Tribunal within six weeks from today. On deposit of the amount, the same shall be disbursed to the claimants proportionately as per the direction of the learned Tribunal given in the impugned award.”
4. At the very outset, it is needless to state that the High Court while reducing the quantum of compensation as well as the rate of interest failed to assign any reason. The impugned order MACAs Nos. 821 and 953 of 2007 of the High Court being a non-speaking order calls for interference in these appeals.
5. As stated by us, the appellants, namely, the claimants alone have come forward with these appeals. Therefore, the only question to be examined is as to what is the multiplier to be applied, which ground though raised before the High Court, we find that the High Court has not ventured to answer the said question.
6. This question has time and again been considered by this Court. In a recent decision of this Court, namely, Santosh Devi v. National Insurance Co. Ltd. (2012) 6 SCC 421, to which one of us (Hon'ble G.S Singhvi, J.) was a party, after referring to the decision in Sarla Verma v. DTC (2009) 6 SCC 121 wherein the formula under different headings including the one relating to selection of multiplier was quoted with approval. The said formula has been set out in Sarla Verma (2009) 6 SCC 121 in para 42 which reads as under: (p. 140)
“42. We therefore hold that the multiplier to be used should be as mentioned in Column 4 of the table above (prepared by applying Susamma Thomas (1994) 2 SCC 176, Trilok Chandra (1996) 4 SCC 362 and Charlie (2005) 10 SCC 720), which starts with an operative multiplier of 18 (for the age groups of 15 to 20 and 21 to 25 years), reduced by one unit for every five years, that is, M-17 for 26 to 30 years, M-16 for 31 to 35 years, M-15 for 36 to 40 years, M-14 for 41 to 45 years, and M-13 for 46 to 50 years, then reduced by two units for every five years, that is, M-11 for 51 to 55 years, M-9 for 56 to 60 years, M-7 for 61 to 65 years and M-5 for 66 to 70 years.”
7. The said part of the formula was applied in the said reported decision Santosh Devi v. National Insurance Co. Ltd. (2012) 6 SCC 421 referred to above while working out the compensation payable to the claimants therein. We, therefore, follow the abovereferred decisions and when the said formula is applied, since the deceased was stated to be 35 years old at the time of his death, the multiplier would be 16 which has to be applied for calculating the compensation. The Tribunal after examining the materials before it, found that after deducting 1/3rd of personal expenses, the monthly income of the deceased was Rs 7000 and the net contribution to the family was ascertained at Rs 84,000 per annum. Applying the multiplier of 16, the compensation works out to Rs 13,44,000. Therefore, while setting aside the order of the High Court insofar as it reduced the quantum of compensation, we modify the compensation payable to the appellants in a sum of Rs 13,44,000 [84,000 × 16]. The said sum of Rs 13,44,000 should carry interest @ 7% per annum from the date of application till the date of realisation.
8. The first respondent is, therefore, directed to pay to the appellants the total amount of compensation in the sum of Rs 13,44,000 after giving credit to whatever payment already made by calculating the rate of interest from the date of application till realisation. Such payment should be made in the proportion as set out by the Tribunal in the last para of its order dated 10-7-2007. With the above modification in the quantum of compensation and the rate of interest payable right from the date of application, the compensation shall be made within a period of three months from the date of this order. The appeals stand allowed as above.
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