Can a MACT Compensation be calculated by applying Two Multipliers? SC says NO

 

The Supreme Court in case of R. Valli Vs Tamil Nadu State Transport Corporation Ltd. has observed that determination of compensation by applying two multipliers is an erroneous mehod.

The Bench comprising of Justice Hemant Gupta and Justice V. Ramasubramanian while dealing with a plea challenging MACT Ruling wherein multiplier of 3 upto the date of superannuation and thereafter multiplier of 8 keeping in view the dependency of life for 10 years has been applied, held that suitable multiplier is to be applied keeping in view the age of the deceased.

Brief Facts of the Case

The deceased herein was riding a two-wheeler when a bus belonging to the respondent dashed into his vehicle. The deceased suffered head injuries and died instantly. In claim so filed thereafter, on the basis of income and age, the Motor Accident Claim Tribunal awarded a compensation of Rs.13,82,628/-

The learned Tribunal assessed the income at Rs.23,062/-. Further observing that the age of superannuation was 58 years, therefore, the dependency was only for a period of 3 years. After deducting income tax @10%, monthly income was assessed as Rs.20,756/-. The Tribunal deducted 1/4th of the said amount towards personal expenses and awarded a compensation of Rs.5,60,412/- for the period the deceased was to be in employment and thereafter applied a multiplier of 8 on 50% of the income which he would have earned and awarded a sum of Rs.7,47,216/-. The Tribunal also awarded compensation on the conventional heads and thus awarded a total sum of Rs.13,82,628/.

When challenged, the the High Court affirmed the findings recorded by theTribunal in respect of multiplier of 3 upto the date of superannuation and thereafter multiplier of 8 keeping in view the dependency of life for 10 years. The High Court maintained the amount of compensation on account of dependency but enhanced the compensation under the conventional heads, so as to award a sum of Rs.15,12,628/-.

Learned Counsel for the appellants has argued that the multiplier methodology adopted by the Tribunal and affirmed by the High Court was erroneous and not sustainable. It was contended that the multiplier is applied keeping in view the age of deceased and income at the time of death and not by considering the remaining years of service. 

He cited Sarla Verma & Ors. Vs. Delhi Transport Corp.& ANR., 2009 Latest Caselaw 381 SC and submitted that the age of the deceased at the time of death is the base for choosing a multiplier and not the years left in employment.



The judgment in Sarla Verma was affirmed in Reshma Kumari and Ors. Vs. Madan Mohan and ANR., 2013 Latest Caselaw 243 SC. Both the judgments were affirmed by the Constitution Bench of this Court reported as National Insurance Company Limited Vs. Pranay Sethi and Ors., 2017 Latest Caselaw 767 SC wherein it was held that the age of the deceased is the basis for applying suitable multiplier and that the compensation is to be determined keeping in view the future prospects. The future prospects were held to 15% in respect of a deceased between the age of 50 to 60 years.

Learned AAG, on the other hand in order to support the applicability of split multiplier i.e., multiplier upto the date of retirement and another multiplier after retirement, referred to sone High Court Rulings.

The Court pointed out that judgments so referred are prior to the enunciation of law by this Court in Pranay Sethi. Therefore, such judgments no longer can be said to be good law as suitable multiplier is to be applied keeping in view the age of the deceased in terms of para 59.7 of the judgment in Pranay Sethi.



The Court mentioned that UNITED INDIA INSURANCE CO. LTD. vs. SATINDER KAUR @ SATWINDER KAUR AND ORS., 2020 Latest Caselaw 415 SC, the Court has applied the multiplier keeping in view the age of the deceased even if he was a bachelor.

In view of the above, the Court affirmed that the method of determination of compensation applying two multipliers is clearly erroneous and run counter to the judgment of this Court in Pranay Sethi, affirming the judgment in Sarla Verma. Since the deceased was 54 years of age on the date of incident, therefore, the suitable multiplier would be 11 as per the judgment of this Court in Sarla Verma approved by this Court in Pranay Sethi. 

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(With input from news agency language)

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