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Sureshchandra Bagmal Doshi And Another v. New India Assurance Company Limited And Others
Factual and Procedural Background
The case concerns the death of a 25-year-old civil engineer who was the only daughter of lawyer and doctor parents. She had been widowed in 1996 and was living with her parents when she died in a road accident on 16 August 1998. Her monthly salary at the time of death was proven to be Rs 6,273. The Motor Accidents Claims Tribunal (MACT) initially awarded Rs 15,71,000 with 12% interest, applying a 100% addition for future prospects, deducting one-third towards personal expenses and using a multiplier of 16.
Both the insurer and the claimants appealed to the High Court of Gujarat. The High Court, relying on Sarla Verma, reduced future prospects to 50%, increased personal-expense deduction to 50%, and raised the multiplier to 18, resulting in compensation of Rs 10,72,360 plus Rs 50,000 each for loss of estate and loss of love and affection, and Rs 5,000 for funeral expenses.
The parents alone appealed to the Supreme Court, resulting in the present judgment.
Legal Issues Presented
- Whether the addition towards future prospects should be 100% (as fixed by the Tribunal) or limited to 50% (as applied by the High Court) for a 25-year-old salaried employee.
- What percentage of the deceased’s income should be deducted as personal and living expenses when the claimants are her parents.
- What amounts are payable under the conventional heads of loss of estate, loss of consortium/love and affection, and funeral expenses.
Arguments of the Parties
Appellants’ Arguments (Parents)
- Relied on two employer certificates (dated 16-10-1998 and 8-7-2005) showing that, based on actual career progression, the deceased’s salary would have been between Rs 14,000 and Rs 17,000 per month, justifying the Tribunal’s 100% future-prospects addition.
- Cited Hem Raj v. Oriental Insurance Co. Ltd. to contend that Pranay Sethi’s standard percentages do not bar higher additions where specific evidence supports greater future prospects.
- Sought restoration of the Tribunal’s award and questioned the High Court’s reduction.
Respondent’s Arguments (Insurance Company)
- Invoked Sarla Verma and Pranay Sethi to submit that future prospects for a salaried person under 40 years should be capped at 50%.
- Defended the High Court’s 50% deduction towards personal expenses as consistent with binding precedent where the deceased is unmarried/widowed and survived only by parents.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Sarla Verma v. DTC, (2009) 6 SCC 121 | Standard multipliers; 50% addition for future prospects for salaried persons below 40; 50% deduction for personal expenses when dependants are parents only. | Used by High Court to reduce future prospects to 50% and increase personal-expense deduction to 50%; Supreme Court accepted the 50% deduction but revisited future prospects in light of additional evidence. |
| National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680 | Constitution Bench approval to Sarla Verma norms; fixed figures for conventional heads; reiterated 50% future-prospect addition for salaried employees under 40. | Supreme Court followed the standard amounts for conventional heads (Rs 70,000 total) and accepted 50% deduction, but held that Pranay Sethi does not preclude higher future-prospect additions where evidence justifies it. |
| Hem Raj v. Oriental Insurance Co. Ltd., (2018) 15 SCC 654 | Clarified that courts may allow higher future-prospect additions if specific evidence demonstrates greater earning potential. | Cited by the appellants and accepted by the Court to justify retaining the Tribunal’s 100% addition based on employer certificates. |
Court's Reasoning and Analysis
1. Future Prospects: The Court acknowledged Pranay Sethi’s standardized 50% addition but noted Hem Raj permits deviation where concrete evidence supports higher income growth. The two employer certificates were unrebutted and showed substantial salary escalation potential. Consequently, the 100% addition adopted by the Tribunal was restored.
2. Deduction for Personal Expenses: Consistent with Sarla Verma and Pranay Sethi, when the deceased is unmarried or widowed and survived only by parents, 50% of income is to be deducted toward personal expenses. The Supreme Court upheld the High Court’s 50% deduction, overturning the Tribunal’s one-third deduction.
3. Multiplier: The deceased was 25 years old; therefore, multiplier 18 (as per Sarla Verma) was appropriate. The Court agreed with the High Court on this point.
4. Conventional Heads: Following Pranay Sethi, the Court fixed Rs 15,000 (loss of estate) + Rs 40,000 (loss of love and affection/consortium) + Rs 15,000 (funeral expenses) = Rs 70,000. Because less than three years had lapsed since Pranay Sethi, no 10% enhancement was applied.
5. Computation: Monthly income (Rs 6,273) doubled for future prospects → Rs 12,546; 50% deduction → Rs 6,273; annual dependency → Rs 75,276; applying multiplier 18 → Rs 13,54,968; adding Rs 70,000 under conventional heads → Rs 14,24,968, rounded to Rs 14,25,000.
6. Interest and Costs: Interest at 12% per annum from the date of the application till realisation was retained. In view of prolonged litigation (over two decades), costs of Rs 25,000 were awarded to the appellants.
Holding and Implications
Appeal Allowed. The Supreme Court set aside the High Court’s reduction and restored a compensation of Rs 14,25,000 with 12% interest, plus costs of Rs 25,000 in favour of the parents.
Implications: The judgment reaffirms that while Pranay Sethi provides standard parameters, courts may depart from the prescribed percentage for future prospects when concrete, unrebutted evidence demonstrates higher earning potential. The ruling, however, is fact-specific and does not create a new universal standard.
Sanjay Kishan Kaul, J.— Fate can be cruel. This is a tragic case where the only daughter of a lawyer husband and a doctor wife, who got married early and unfortunately became a widow also at a young age, died in a vehicular accident, which took place on 16-8-1998. The claim of the parents (the appellants herein) in respect of this unfortunate demise forms the subject-matter of the present appeal.
2. It is not necessary to go into the details of the facts, as those are not really liable to be examined in view of the limited controversy before us. The claim was laid on the basis that the deceased daughter was working in the company of original Respondent 4 as an International Internal Sales Engineer at a monthly salary of Rs 6273. She had a BE (Civil) qualification. Her husband, after an early marriage, had unfortunately passed away in the year 1996 and since then she was living with her parents, the claimants. The deceased had a quick successful progression in her career from the initial post of a Secretary, and the claim was based on the prospective earning of the deceased of more than Rs 25,000 per month.
3. We may note that qua the accident, the driver of the vehicle in which the deceased daughter was travelling died, and there was apportionment of contributory negligence to the extent of 80% qua the truck driver, and 20% qua the Tata Sierra, the two vehicles, which met with the accident. However, this would not affect the claim qua the parents before us.
4. There is no dispute that the assessed income of the deceased at the time of the accident was Rs 6273 per month. This is a finding of fact, both by the Tribunal and the High Court 2015 SCC OnLine Guj 2369. The Tribunal, however added approximately 100% towards future rise in income and considered the prospective income at Rs 12,000 per month, and after deducting 1/3rd towards personal expenses of the deceased, the Tribunal assessed the loss of dependency or the future economic loss at Rs 8000 per month and thereafter a multiplier of 16 was applied. The Tribunal, thus, awarded a sum of Rs 15,36,000 towards loss of dependency benefit; Rs 15,000 towards conventional amount under the head loss of estate; Rs 15,000 towards loss of love and affection and Rs 5000 towards funeral expenses totalling to Rs 15,71,000 in terms of an award dated 29-3-2007. The claimants were also held entitled to interest @ 12% per annum on the award amount from the date of application till realisation.
5. Both the sides were aggrieved by the assessment of this claim and filed appeals before the High Court, which modified the award of the Tribunal vide the impugned judgment dated 9-2-2015 2015 SCC OnLine Guj 2369, which is the subject-matter of the present appeal.
6. The High Court declined to accept the future income rise as 100% and took the same as 50% in view of the judgment of this Court in Sarla Verma v. DTC (2009) 6 SCC 121. The High Court, considering that the claimants were the parents of the deceased, deducted 50% towards personal expenses instead of 1/3rd of the amount, as per the Tribunal. In fact, a reading of the order shows that these were the only two pleas advanced on behalf of the Insurance Company on which the appeal of the Insurance Company succeeded.
7*. The High Court, however, fixed the multiplier at 18 instead of 16 as fixed by the Tribunal, as the deceased was aged about 25 years, and that would have been the appropriate multiplier as per Sarla Verma (2009) 6 SCC 121. The High Court also examined the two other pleas made on behalf of the claimants i.e. that the award of Rs 15,000 for loss of estate and Rs 15,000 for loss of love and affection was inadequate.
8. In view of what the High Court held as aforesaid, the amount was computed at Rs 10,72,360 with a sum of Rs 50,000 being awarded under the head of loss of estate as well as loss of love and affection instead of Rs 30,000 as awarded by the Tribunal and Rs 5000 towards funeral expenses. The interest awarded was also upheld.
9. The claimants alone are the appellants before us.
10. On having heard the learned counsel for the parties and having examined the record, we may note that the parties are ad idem on the assessment of the income of the deceased at Rs 6273 per month. The question, thus, is whether the Tribunal was right in increasing the amount for future rise in income by 100%, or the High Court was within its right to reduce the said amount to 50%.
11. We have the benefit of the Constitution Bench judgment of this Court in National Insurance Co. Ltd. v. Pranay Sethi (2017) 16 SCC 680, AIR 2017 SC 5157. While examining the observations in Sarla Verma (2009) 6 SCC 121, the Constitution Bench gave its imprimatur to the addition of 50% to actual salary of the deceased towards future prospects where the deceased had a permanent job and was below the age of 40 years, as in the present case. However, the learned counsel for the appellant has brought to our notice a recent order passed by this Court in Hem Raj v. Oriental Insurance Co. Ltd. (2018) 15 SCC 654 dated 22-11-2017 wherein while taking note of the views expressed by National Insurance Co. Ltd. (2017) 16 SCC 680, AIR 2017 SC 5157, it has been observed that the percentage for calculating future rise in income is no bar to future prospects being taken at a higher level where the assessment is based on actual evidence led to the satisfaction of the Tribunal/the Court that the future prospects were higher than the standard percentage. The learned counsel, thus, submitted in the context of the evidence led in the present case that the two certificates dated 16-10-1998 and 8-7-2005 were proved in terms whereof the deceased's future prospects would have entitled her to a gross salary in the range of Rs 14,000 to Rs 17,000 per month. No doubt the second certificate is dated 8-7-2005, after a lapse of 7 years from the first certificate, but then that would be a more realistic estimate of what a person holding that post would be earning at that stage of time. There is no rebuttal evidence led by the Insurance Company and we see no reason to doubt these certificates. Thus, the assessment of the Tribunal is based on the evidence led in the present case. As noticed above, the standardised percentage is capable of being varied if the evidence is so led.
12. We are, thus, of the view that looking into the conspectus of the aforesaid facts and the legal position, the Tribunal was justified in giving a 100% increase and taking the future prospects at Rs 12,000 per month.
13. The second aspect relates to the percentage of deduction. It really could not be seriously disputed before us that considering that the deceased is survived by the two parents, 50% amount be deducted as personal and living expenses of the deceased when the deceased is unmarried or widowed, as in the present case in view of the judgment in National Insurance Co. Ltd. (2017) 16 SCC 680, AIR 2017 SC 5157, which has affirmed the position in Sarla Verma (2009) 6 SCC 121. Thus, the High Court was justified in increasing the percentage of personal expenses to the extent of 50% and not 1/3rd as held by the Tribunal.
14. Now coming to the last aspect i.e. the conventional heads, in National Insurance Co. Ltd. (2017) 16 SCC 680, AIR 2017 SC 5157, it has been standardised at Rs 15,000 for loss of estate; Rs 40,000 towards loss of consortium (in the present case loss of love and affection) and Rs 15,000 towards funeral expenses. The total amount, thus, would be Rs 70,000, which as per the said judgment is capable of being enhanced @ 10% in the span of every three years. However, we are still within the window of three years.
15. The result of the aforesaid is that after deducting 50% of the amount towards personal expenses and adding 100% towards future rise in income, we would be back at the figure of Rs 6273 per month to which a multiplier of 18 has to be applied. The amount would come to Rs 13,54,968. The amount under the conventional heads would be Rs 70,000 i.e. totalling to Rs 14,24,968 rounded off at Rs 14,25,000. The award of interest would continue @ 12% as awarded by the Tribunal.
16. We may also notice the litigation of two decades, which the appellants have had to go through before different forums to claim the amounts due to them and we are of the view that they should be held entitled to costs throughout, which we assess at Rs 25,000.
17. We, thus, allow the appeal in the aforesaid terms with costs assessed as aforesaid.
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