201 INSC 0666
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6451 OF 2021
(Arising out of S.L.P. (C.) No. 14558 of 2019)
N. JAYASREE & ORS.     …APPELLANT(S) 
VERSUS
CHOLAMANDALAM MS GENERAL 
INSURANCE COMPANY LTD.        …RESPONDENT(S)
J U D G M E N T
S. ABDUL NAZEER, J.
Leave granted.
2. This   appeal   is   directed   against   the   judgment   dated
09.08.2017   passed   by   the   High   Court   of   Kerala   at   Ernakulam   in
MACA   No.   1560   of   2013.     Through   the   impugned   judgment,   the
High   Court   scaled   down   the   amount   of   compensation   payable   to
the   present   appellants   and   thereby   modified   the   award   dated
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26.04.2013   passed   by   the   Motor   Accident   Claims   Tribunal,
Kottayam (for short ‘MACT’) in OP(MV) No.843 of 2011.
3.  The   appellants   filed   the   aforesaid   claim   petition   before   the
MACT   seeking   compensation   on   account   of   the   death   of   N.
Venugopalan   Nair   in   a   motor   vehicle   accident   which   occurred   on
20.06.2011.     Appellant   no.1   is  the   wife   of  the   deceased,  appellant
nos.   2   and   3   are   his   daughters   and   appellant   no.4   is   his
mother­in­law. 
4. There  is  no  dispute  as  to   the  occurrence  of  the  accident  and
the liability of the respondent­insurer to pay the compensation. In
view   of   this   admitted   position,   it   is   unnecessary   to   narrate   the
factual aspects of the accident.  
5. The   deceased   was   aged   52   years   at   the   time  of   the   accident.
The MACT took the annual salary of the deceased as Rs.8,87,148.
To   this,   the   MACT   applied   a   multiplier   of   ‘11’   and   deducted
one­fourth (1/4 th
) of the income towards his personal expenses for
the   purpose   of  calculation   of   the  compensation   under   the  head   of
loss   of   dependency.   A   total   sum   of   Rs.73,18,971/­   (Rupees
seventy­three   lakhs   eighteen   thousand   nine   hundred   seventy­one
only) was awarded towards loss of dependency. The MACT awarded
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a   total   sum   of   Rs.74,50,971/­   (Rupees   seventy­four   lakhs   fifty
thousand   nine   hundred   seventy­one   only)   towards   compensation
with interest @ 7.5 per cent per annum from the date of the claim
petition   till   the   date   of   realization.     Thus,   the   amount   awarded   to
the appellants is as under: 
S.No. Head of Claim  Amount
Claimed   (in
rupees) Amount
Awarded   (in
rupees) Basis   vital   details
in a nut shell
1. Transportation 5,000/­ 4,000/­ In   view   of   the
transportation
charges
2. Funeral expenses 10,000/­  7,000/­ Nominal amount
3. Damage to clothings 1,500/­ 1,000/­ …do……
4. Loss of dependency  1,06,82,100/­ 73,18,971/­ (8,87,148­
2,21,787)×11
=73,18,971/­
5. Pain and sufferings 10,000/­ 15,000/­ In view of the pain
suffered   by   the
victim   before   his
death
6. Loss   of   love   and
affection 1,00,000/­ 70,000/­ Petitioners   2,3
and   4   have   lost
the   love   and
affection   of   the
victim
7. Loss of consortium 1,00,000/­ 25,000/­ The   first   petition
has   lost   the
companionship   of
her husband
8. Loss of estate 1,00,000/­ 10,000/­ Nominal amount
9. Loss of expectation of
life 2,00,000/­ Not allowed Other   heads
allowed
TOTAL 1,12,08,600/­ 74,50,971/­ ……………
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6. However,   the   High   Court   held   that   appellant   no.4   was   not   a
legal   representative  of   the   deceased.  Further,  the   High   Court   held
that   the   MACT   ought   to   have   applied   split   multiplier   for   the
assessment   of   the   dependency   compensation.     The   High   Court
fixed monthly income of the deceased as Rs.40,000/­ (Rupees forty
thousand   only)   and   deducted   one­third   (1/3 rd
)   of   the   income
towards   his   personal   expenses.   It   applied   multiplier   ‘7’   for
calculating   dependency   compensation   for   the   post­retiral   period
and,   for   the   pre­retirement   period,   a   multiplier   of   ‘4’   was   applied.
Accordingly,   the   High   Court   awarded   compensation   of
Rs.23,65,728/­   (Rupees   twenty­three   lakhs   sixty­five   thousand
seven   hundred   twenty­eight   only),   towards   loss   of   dependency   for
pre­retiral period and a sum of Rs.22,40,000/­ (Rupees twenty­two
lakhs   forty   thousand   only)   towards   loss   of   dependency   for
post­retiral period.  A sum of Rs.1,00,000/­ (Rupees one lakh only)
was   awarded   towards   loss   of   consortium,   Rs.25,000/­   (Rupees
twenty­five   thousand   only)   towards   funeral   expenses,   and
Rs.80,000/­   (Rupees   eighty   thousand   only)   towards   loss   of   love
and affection. In total, a sum of Rs.48,39,728/­ (Rupees forty­eight
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lakhs   thirty­nine   thousand   seven   hundred   twenty­eight   only)   was
awarded as compensation by the High Court.
7. We   have   heard   the   learned   counsel   for   the   parties.     Learned
counsel   for   the   appellants   submits   that   the   High   Court   was   not
justified   precluding   appellant   no.4   as   legal   representative   of   the
deceased.  She is the mother­in­law of the deceased and was living
with   the   deceased   and   his   family   members.   Therefore,   she   was
entitled   to   be   treated   as   a   legal   representative   for   the   purpose   of
determination of compensation.  Accordingly, 1/4 th
 of the income of
the   deceased   should   have   been   deducted   towards   his   personal
expenses.   Further,   it   was   contended   that   the   High   Court   was   not
justified   in   applying   a   split   multiplier   having   regard   to   the
judgment of this Court in   Sarla Verma (Smt.) and Ors.   vs.   Delhi
Transport   Corporation   and   Anr. 1
  and   the   subsequent
Constitution Bench judgment of this Court in  National Insurance
Company   Limited   vs.   Pranay   Sethi   and   Ors . 2
.     It   was   also
argued that the deceased was a meritorious person who possessed
the   qualification   of   M.Sc.   M.Phil.     His   monthly   salary   was
1  (2009) 6 SCC 121
2  (2017) 16 SCC 680
5

Rs.83,831/­   which   is   evident   from   the   materials   on   record.   The
High   Court   took   his   monthly   income   as   Rs.40,000/­   for   the
purpose   of   calculation   of   loss   of   dependency   without   any
justification.  In view of the above, the High Court was not justified
in   scaling   down   the   amount   of   compensation   awarded   by   the
MACT. 
8. On   the   other   hand,   learned   counsel   for   the   respondent
submits   that   the   deceased   was   aged   52   years   at   the   time   of   the
accident.     He   would   not   have   earned   the   same   monthly   income
after his retirement. In view of the same, the High Court applied a
split   multiplier   for   calculating   the   loss   of   dependency.   It   was   also
argued   that   appellant   no.4,   who   is   the   mother­in­law   of   the
deceased, cannot be treated as his legal representative. Further, it
was   contended   that   the   High   Court   was   justified   in   taking   the
monthly salary of the deceased as Rs.40,000/­ and deducting 1/3 rd
of   the   income   towards   the   personal   expenses,   fair   compensation
has been awarded towards loss of dependency.  
9. In view of the above, the questions for consideration before us
are:   (I)   whether   the   High   Court   was   justified   in   precluding   the
mother­in­law   of   the   deceased   (appellant   no.4)   as   his   legal
6

representative?   (II)   whether   the   High   Court   was   justified   in
applying   a   split   multiplier?   (III)   based   on   the   findings   on   the
preceding   questions,   what   is   the   amount   of   compensation   that
should be awarded to the appellants? 
(I)   whether   the   High   Court   was   justified   in   precluding   the
mother­in­law   of   the   deceased   (appellant   no.4)   as   his   legal
representative?
10. The provisions of the Motor Vehicles Act, 1988 (for short, “MV
Act”)   gives   paramount   importance   to   the   concept   of   ‘just   and   fair’
compensation.   It is a beneficial legislation which has been framed
with   the   object   of   providing   relief   to   the   victims   or   their   families.
Section   168   of   the   MV   Act   deals   with   the   concept   of   ‘just
compensation’ which ought to be determined on the foundation of
fairness,   reasonableness   and   equitability.   Although   such
determination   can   never   be   arithmetically   exact   or   perfect,   an
endeavor   should   be   made   by   the   Court   to   award   just   and   fair
compensation   irrespective   of   the   amount   claimed   by   the
applicant/s. In  Sarla Verma 1
, this Court has laid down as under:
“16.   ...“Just   compensation”   is   adequate
compensation   which   is   fair   and   equitable,   on
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the   facts   and   circumstances   of   the   case,   to
make good  the loss  suffered as a  result  of the
wrong, as far as money can do so, by applying
the   well­settled   principles   relating   to   award   of
compensation.   It   is   not   intended   to   be   a
bonanza, largesse or source of profit.” 
11. In   Sarla Verma 1
  it was further held that where the deceased
was   married,   the   deduction   towards   personal   and   living   expenses
of   the   deceased   should   be   one­third   (1/3 rd
)   where   the   number   of
dependent   family   members   is   between   2   and   3,   one­fourth   (1/4 th
)
where the number of dependent family members is between 4 and
6,   and   one­fifth   (1/5 th
)   where   the   number   of   dependent   family
members exceeds six. 
12. In   the   instant   case,   the   appellants   have   contended   that   the
mother­in­law   of   the   deceased   was   staying   with   the   deceased   and
his   family   members   since   a   long   time.   Taking   into   consideration
the   number   of   dependents   of   the   deceased   including   his
mother­in­law   (four   in   number),   the   MACT   had   deducted   one
fourth   (1/4 th
)   of   the   income   towards   his   personal   expenses.
However,   the   High   Court   has   held   that   appellant   no.4   being   the
mother­in­law of the deceased, cannot be reckoned as a dependent
8

of the deceased. The High Court, therefore, determined the number
of   dependents   as   3   and   accordingly   deducted   one­third   (1/3 rd
)   of
the income of the deceased towards his personal expenses. 
13.  Section 166 of the MV Act provides for filing of an application
for   compensation.   The   relevant   portion   of   the   said   Section   is   as
under:
“166. Application for  compensation . —
(1)   An application for compensation arising out
of   an   accident   of   the   nature   specified   in
sub­section (1) of section 165 may be made—
(a)   by the person who has sustained the injury;
or
(b)   by the owner of the property; or
(c)   where death has resulted from the accident,
by all or any of the legal representatives of the
deceased; or
(d)   by any agent duly authorised by the person
injured   or   all   or   any   of   the   legal
representatives   of   the   deceased,   as   the   case
may be:        
Provided   that   where   all   the   legal
representatives of the deceased have not joined
in   any   such   application   for  compensation,   the
application   shall   be   made   on   behalf   of   or   for
the   benefit   of   all   the   legal   representatives   of
the deceased and the legal representatives who
have   not   so   joined,   shall   be   impleaded   as
respondents to the application.”
9

14. 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.     Legal   heirs   are   the
persons   who   are   entitled   to   inherit   the   surviving   estate   of   the
deceased.  A legal heir may also be a legal representative.    
15. Indicatively   for   the   present   inquiry,   the   Kerala   Motor   Vehicle
Rules, 1989, defines the term ‘legal representative’ as under:
“Legal Representative” means  a  person who in
law   is   entitled   to   inherit   the   estate   of   the
deceased if he had left any estate at the time of
his   death   and   also   includes   any   legal   heir   of
the   deceased   and   the   executor   or
administrator of the estate of the deceased.” 
16. 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. As noticed above, MV Act is a benevolent
legislation enacted for the object of providing monetary relief to the
10

victims   or   their   families.   Therefore,   the   MV   Act   calls   for   a   liberal
and   wider   interpretation   to   serve   the   real   purpose   underlying   the
enactment   and  fulfil its  legislative intent.    We  are also   of  the  view
that   in   order   to   maintain   a   claim   petition,   it   is   sufficient   for   the
claimant   to   establish   his   loss   of   dependency.     Section   166   of   the
MV   Act   makes   it   clear   that   every   legal   representative   who   suffers
on   account   of   the   death   of   a   person   in   a   motor   vehicle   accident
should have a remedy for realization of compensation.  
17. It is settled that percentage of deduction for personal expenses
cannot   be   governed   by   a   rigid   rule   or   formula   of   universal
application.  It also does not depend upon the basis of relationship
of the claimant with the deceased.   In some cases, the father may
have   his   own   income   and   thus   will   not   be   considered   as
dependent.  Sometimes, brothers and sisters will not be considered
as dependents because they may either be independent or earning
or   married   or   be   dependent   on   the   father.     The   percentage   of
deduction   for   personal   expenditure,   thus,   depends   upon   the   facts
and circumstances of each case. 
18. In the instant case, the question for consideration is whether
the   fourth   appellant   would   fall   under   the   expression   ‘legal
11

representative’   for   the   purpose   of   claiming   compensation.     In
Gujarat   State   Road   Transport   Corporation,   Ahmedabad   vs.
Ramanbhai Prabhatbhai and Anr . 3
  this Court while considering
the   entitlement   of   the   brother   of   a   deceased   who   died   in   a   motor
vehicle  accident   to   maintain   a  claim  petition   under   the  provisions
of the MV Act, held as under:
“13.   We   feel   that   the   view   taken   by   the
Gujarat   High   Court   is   in   consonance   with
the   principles   of   justice,   equity   and   good
conscience   having   regard   to   the   conditions
of   the   Indian   society.   Every   legal
representative   who   suffers   on   account   of
the   death   of   a   person   due   to   a   motor
vehicle   accident   should   have   a   remedy   for
realisation   of   compensation   and   that   is
provided by Sections 110­A to 110­F of the
Act .   These   provisions   are   in   consonance   with
the   principles   of   law   of   torts   that   every   injury
must   have   a   remedy.   It   is   for   the   Motor
Vehicles   Accidents   Tribunal   to   determine   the
compensation which appears to it to be just as
provided   in   Section   110­B   of   the   Act   and   to
specify   the   person   or   persons   to   whom
compensation shall be paid. The determination
of   the   compensation   payable   and   its
apportionment as required by Section 110­B of
the   Act   amongst   the   legal   representatives   for
whose   benefit   an   application   may   be   filed
under Section 110­A of the Act have to be done
in   accordance   with   well­known   principles   of
3 3
 (1987) 3 SCC 234
12

law.   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   which   as   we   have
already   held   has   been   substantially   modified
by   the   provisions   contained   in   the   Act   in
relation   to   cases   arising   out   of   motor   vehicles
accidents.   We   express   our   approval   of   the
decision   in   Megjibhai   Khimji   Vira   v.
Chaturbhai   Taljabhagujri   4
  and   hold   that
the   brother   of   a   person   who   dies   in   a   motor
vehicle   accident   is   entitled   to   maintain   a
petition under Section 110­A of the Act if he is
a legal representative of the deceased.”
19. In   Hafizun Begum (Mrs)   vs.   Mohd.  Ikram Heque and Ors . 5
it was held that:
“ 7.  … 12 .   As   observed   by   this   Court   in
Custodian   of   Branches   of   Banco   National
Ultramarino   v.   Nalini   Bai   Naique 6
  the
definition   contained   in   Section   2(11)   CPC   is
inclusive in character  and its scope  is wide, it
is   not   confined   to   legal   heirs   only.   Instead,   it
stipulates   that   a   person   who   may   or   may
not   be   legal   heir,   competent   to   inherit   the
4  AIR 1977 Guj 195
5  (2007) 10 SCC 715
6  1989 Supp (2) SCC 275
13

property of the deceased, can represent the
estate   of   the   deceased   person.   It   includes
heirs   as   well   as   persons   who   represent   the
estate   even   without   title   either   as
executors   or   administrators   in   possession
of   the   estate   of   the   deceased .   All   such
persons   would   be   covered   by   the   expression
‘legal   representative’.   As   observed   in   Gujarat
SRTC   v.   Ramanbhai   Prabhatbhai 3
  a   legal
representative is one who suffers on account of
death   of   a   person   due   to   a   motor   vehicle
accident   and   need   not   necessarily   be   a   wife,
husband, parent and child.”
20. In   Montford   Brothers   of   St.   Gabriel   and   Anr.   vs.   United
India   Insurance   and   Anr . 7
  this   Court   was   considering   the   claim
petition   of   a   charitable   society   for   award   of   compensation   on
account   of   the   death   of   its   member.   The   appellant­society   therein
was   a   registered   charitable   society   and   was   running   various
institutions as a constituent unit of Catholic church.  Its members,
after   joining   the   appellant­society,   renounced   the   world   and   were
known as ‘brother’.  In this case, a ‘brother’ died in a motor vehicle
accident.   The claim petition filed by the appellant­society seeking
compensation   on   account   of   the   death   of   aforesaid   ‘brother’   was
rejected   by   the   High   Court   on   the   ground   of   its   maintainability.
7  (2014) 3 SCC 394
14

This   Court   after   examining   various   provisions   of   the   MV   Act   held
that   the   appellant­society   was   the   legal   representative   of   the
deceased   ‘brother’.     While   allowing   the   claim   petition   it   was
observed as under:
“17.     A   perusal   of   the   judgment   and   order   of
the   Tribunal   discloses   that   although   Issue   1
was   not   pressed   and   hence   decided   in   favour
of   the   appellant   claimants,   while   considering
the   quantum   of   compensation   for   the
claimants,   the   Tribunal   adopted   a   very
cautious   approach   and   framed   a   question   for
itself   as   to   what   should   be   the   criterion   for
assessing   compensation   in   such   case   where
the deceased was a Roman Catholic and joined
the   church   services   after   denouncing   his
family,   and   as   such   having   no   actual
dependents   or   earning?   For   answering   this
issue,   the   Tribunal   relied   not   only   upon
judgments   of   American   and   English   Courts
but also upon Indian judgments for coming to
the   conclusion   that   even   a   religious   order   or
an   organisation   may   suffer   considerable   loss
due   to   the   death   of   a   voluntary   worker.   The
Tribunal also went on to decide who should be
15

entitled   for   compensation   as   legal
representative   of   the   deceased   and   for   that
purpose   it   relied   upon   the   Full   Bench
judgment   of   Patna   High   Court   in   Sudama
Devi   v.   Jogendra   Choudhary 8
,   which   held
that   the   term   “legal   representative”   is   wide
enough   to   include   even   “intermeddlers”   with
the   estate   of   a   deceased.   The   Tribunal   also
referred to  some Indian judgments  in  which  it
was   held   that   successors   to   the   trusteeship
and   trust   property   are   legal   representatives
within   the   meaning   of   Section   2(11)   of   the
Code of Civil Procedure.”
21. Coming  to  the  facts of  the present  case, the  fourth  appellant
was the mother­in­law of the deceased.  Materials on record clearly
establish   that   she   was   residing   with   the   deceased   and   his   family
members.   She   was   dependent   on   him   for   her   shelter   and
maintenance.     It   is   not   uncommon   in   Indian   Society   for   the
mother­in­law to live with her daughter and son­in­law during her
old   age   and   be   dependent   upon   her   son­in­law   for   her
maintenance.   Appellant no.4 herein may not be a legal heir of the
8  AIR 1987 Pat 239
16

deceased,   but   she   certainly   suffered   on   account   of   his   death.
Therefore,   we   have   no   hesitation   to   hold   that   she   is   a   “legal
representative” under Section 166 of the MV Act and is entitled to
maintain a claim petition.  
(II)     Whether   the   High   Court   was   justified   in   applying   a   split
multiplier?
22. The   deceased   was   aged   52   years   at   the   time  of   the   accident.
He   was   working   as   an   Assistant   Professor   and   getting   a   monthly
salary of Rs.83,831/­ (Rupees eighty­three thousand eight hundred
thirty­one   only).     The   evidence   on   record   shows   that   he   was   a
meritorious man having the qualifications of M.Sc, M.Phil.    He was
a first­class holder in M.Sc.    He was a   Selection Grade Lecturer in
Mathematics   and   was   a   subject   expert.     He   was   also   included   in
the   panel   of   Mahatma   Gandhi   University   and   was   appointed   as
Examiner   in   the   Board   of   Examiners   for   CBCCSS   Programme   in
Mathematics.     Subsequently,   he   was   appointed   as   Deputy
Chairman of the Examiners Board.  Evidence on record also shows
that   there   is   acute   shortage   of   lecturers   in   Mathematics   for
appointment   in   colleges   and   retired   Mathematics   Professors   are
17

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.
23. In   Sarla   Verma 1
,   this   Court   has   held   that   while   calculating
the   compensation,   the   courts   should   take   into   consideration   not
only   the   actual   income   at   the   time   of   the   death   but   should   also
make additions by taking note of future prospects.   It was further
held   that   though  the  evidence  may   indicate  a   different  percentage
of   increase,   it   is   necessary   to   standardize   the   addition   to   avoid
disparate   yardsticks   being   applied   or   disparate   methods   of
calculation being adopted.
24. In   Reshma   Kumari   &   Ors.   vs.   Madan   Mohan   &   Anr . 9
,   a
three­Judge   Bench   of   this   Court   has   approved   the   judgment   in
Sarla Verma 1
.
9  (2013) 9 SCC 65
18

25. In   Pranay   Sethi 2
,   this   Court   has   not   only   approved   the
aforesaid   observations   made   in   Sarla   Verma 1
  but   also   held   as
under:
“ 59.3.   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.
59.4.   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.”
26. In  K.R. Madhusudhan and Ors.  vs.  Administrative Officer
and   Anr . 10
,   this   Court   was   considering   a   case   where   the   High
Court had applied split multiplier for the purpose of calculation of
compensation towards loss of dependency and held as under:
10  (2011) 4 SCC 689
19

“ 8.   In   Sarla   Verma 1
  judgment   the   Court   has
held   that   there   should   be   no   addition   to
income   for   future   prospects   where   the   age   of
the   deceased   is   more   than   50   years.   The
learned Bench called it a rule of thumb and it
was   developed   so   as   to   avoid   uncertainties   in
the outcomes of litigation. However, the Bench
held that a departure can be made in rare and
exceptional   cases   involving   special
circumstances.
9.  We are of the opinion that the rule of thumb
evolved   in   Sarla   Verma 1
  is   to   be   applied   to
those   cases   where   there   was   no   concrete
evidence   on   record   of   definite   rise   in   income
due   to   future   prospects.   Obviously,   the   said
rule   was   based   on   assumption   and   to   avoid
uncertainties   and   inconsistencies   in   the
interpretation   of   different   courts,   and   to
overcome the same.”
27. In   Puttamma   and   Ors.   vs.   K.L.   Narayana   Reddy   and
Anr . 11
,   this   Court   was   again   considering   a   case   where   split
multiplier   for   the   purpose   of   calculation   of   dependency
compensation was applied.  It was held thus: 
“ 32.   For   determination   of   compensation   in
motor   accident   claims   under   Section   166   this
Court   always   followed   multiplier   method.   As
there were inconsistencies in the selection of a
multiplier,   this   Court   in   Sarla   Verma 1
11  (2013) 15 SCC 45
20

prepared   a   table   for   the   selection   of   a
multiplier   based   on   the   age   group   of   the
deceased/victim.   The   1988   Act,   does   not
envisage application of a split multiplier.
33.  In  K.R. Madhusudhan  v.  Administrative
Officer 10
  this   Court   held   as   follows:   (SCC   p.
692, paras 14­15)
“ 14 .   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   multiplier   used   by   the
Tribunal   without   disclosing   any   reason
therefor.   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   2nd
column   in   the   Second   Schedule   to   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.
15 .   We   are,   thus,   of   the   opinion   that   the
judgment of the High Court deserves to be set
aside   for   it   is   perverse   and   clearly   contrary   to
the   evidence   on   record,   for   having   not
considered   the   future   prospects   of   the
deceased   and   also   for   adopting   a   split
multiplier method.
21

34.   We, therefore, hold that in absence of any
specific   reason   and   evidence   on   record   the
tribunal   or   the   court   should   not   apply   split
multiplier   in   routine   course   and   should   apply
multiplier   as   per   decision   of   this   Court   in
Sarla   Verma 1
  as   affirmed   in   Reshma
Kumari 9
. ”
28. From   the   above   discussion   it   is   clear   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.   Further,   while   the   evidence   in   a   given
case   may   indicate   a   different   percentage   of   increase,
standardization   of   the   addition   for   future   prospects   should   be
made   to   avoid   different   yardsticks   being   applied   or   different
methods   of   calculation   being   adopted.     In   Pranay   Sethi 2
,   the
Constitution   Bench   has   directed   addition   of   15%   of   the   salary   in
case   the   deceased   was   between   the   age   of   50   to   60   years   as   a
thumb rule, where a deceased had a permanent job. In view of the
above, the High Court was not justified in applying split multiplier
in the instant case.  
(III)     What   is   the   amount   of   compensation   that   should   be
awarded to the appellants?
22

29. That takes us to the award of compensation.  We have already
noticed   that   the   deceased   was   working   as   Assistant   Professor   at
Devaswom   Board   Pampa   College,   Paruamala,   and   was   drawing   a
monthly   income   of   Rs.83,381/­   which   is   clear   from   his   salary
certificate   (Ex.A­5)   issued   by   the   Principal   of   Devaswom   Board
Pampa   College,   Paruamala.     The   salary   slip   received   by   the
deceased   for   the   month   of   May   2011   (Ex.A­6)   also   shows   that   his
monthly   salary   was   Rs.83,381/­.     These   documents   have   been
marked   in   evidence   through   the   Principal   of   the   said   College   who
was   examined   as   PW­1.   Thus,   annual   income   of   the   deceased
comes to Rs.10,00,572/­.  This Court in  Sarla Verma 1
 has made it
clear that the Annual Income of the deceased minus the income tax
should   be   taken   into   account   at   the   time   of   his   death   for   the
purpose of calculation of loss of dependency. The deceased had to
pay Rs.1,13,424/­ towards income tax per annum.  After deducting
the   said   amount   the   actual   income   of   the   deceased   comes   to
Rs.8,87,148/­.    
23

30. The deceased was aged 52 years at the time of his death and
had   a   permanent   job.     Having   regard   to   the   judgment   in   Pranay
Sethi 2
,   an   addition   of   15%   of   his   actual   salary   should   be   added
towards   future   prospectus.   Therefore,   15%   of   his   actual   salary
comes to Rs.1,33,072/­
31. Since the deceased was 52 years at the time of his death, the
applicable multiplier  is ‘11’.   As we have held that  appellant  no.4,
the mother­in­law of the deceased is also a dependent and a “legal
representative” under Section 166 of the MV Act, the total number
of dependents left behind by the deceased is four.   Hence, 1/4 th
  of
the   income   (actual   salary   +   future   prospects)   should   be   deducted
towards   his   personal   expenses.   Thus,   the   total   compensation
payable towards loss of dependency is as under:
(1) (i) Annual Salary 
(ii) less Tax
(iii) Actual Salary : Rs.10,00,572
Rs.1,13,424
Rs.8,87,148
(2) Future   Prospects   :15%   of
Actual Salary  Rs.1,33,072
(3) Loss of dependency :
(1) 8,87,148 + (2) 1,33,072 Rs.84,16,815
24

– ¼	 i.e. Rs.2,55,055 x 11 
32. In   Pranay   Sethi 2
,   this   Court   has   awarded   a   total   sum   of
Rs.70,000/­   (Rupees   seventy   thousand   only)   under   conventional
heads,   namely,   loss   of   estate,   loss   of   consortium   and   funeral
expenses.  It was held that the said sum should be enhanced at the
rate of 10% in every three years.  It was held thus:
“ 59.8.   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.”
33. The   judgment   in   Pranay   Sethi 2
  was   rendered   in   the   year
2017.   Therefore, the claimants are entitled for 10% enhancement.
Thus, a sum of Rs.16,500/­ each is awarded towards loss of estate
and funeral expenses. 
34. A   three­Judge   Bench   of   this   Court   in   United   India
Insurance   Co.   Ltd.   vs .   Satinder   Kaur   @   Satwinder   Kaur   and
Ors 12
,   after   considering   Pranay   Sethi 2
,   has   awarded   spousal
12  (2020) SCC Online SC 410 : AIR 2020 SC 3076
25

consortium at the rate of Rs.40,000/­ (Rupees forty thousand only)
and towards loss of parental consortium to each child at the rate of
Rs.40,000/­   (Rupees   forty   thousand   only).     The   compensation
under  these  heads  also  needs  to  be  increased  by  10%.    Thus,  the
spousal   consortium   is   awarded   at   Rs.44,000/­   (Forty­four
thousand   only),   and   towards   parental   consortium   at   the   rate   of
Rs.44,000/­   each   (Total   Rs.88,000/­)   is   awarded   to   the   two
children.
35. Thus, the appellants are entitled to compensation as under:
(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/­
36. The appellants are also entitled to interest on the said amount
at  the  rate  of 7.5% per   annum  from   the date  of the  claim  petition
till   the   date   of   its   realization.     The   respondent   is   accordingly
directed to deposit the above amount with accrued interest thereon
26

at   the   rate   of   7.5%   per   annum   from   the   date   of   claim   petition   till
the   date   of   deposit,   after   deducting   amounts,   if   any,   deposited   by
the respondent, within eight weeks from today.
37. Resultantly,   the   appeal   is   allowed   in   the   aforesaid   terms.
Parties are directed to bear their respective costs.
38. Pending applications, if any, shall also stand disposed of.
……………………………………J.
(S. ABDUL NAZEER)
……………………………………J.
(KRISHNA MURARI)
New Delhi;
October 25, 2021.
27