LATA WADHWA AND ORS. versus STATE OF BIHAR AND ORS.

Citation: [2001] SUPP. 1 S.C.R. 578 · Decided: 16-08-2001 · Supreme Court of India · Bench: G.B. PATTANAIK · Disposal: Disposed off

Judgment (excerpt)

A 
LATA WADHWA AND ORS. 
v. 
ST A TE OF BIHAR AND ORS. 
AUGUST 16, 2001 
B 
[G.B. PATTANAIK, U.C. BANERJEE AND S.N. VAR!AVA, JJ.] 
Compensation-Determination of-Fire accident-Multiple deaths and 
injuries-Writ petition under Article 32 seeking payment of appropriate 
compensation-Court appointed former Chief Justice of India to determine 
C the compensation-Parties agreed for deiermination in accordance with the 
principles laid down in Safia Khatoon, Bhagwan Dass and Ramaniya's 
cases*-Determination by Multiplier method-Determination questioned-
Held, determination not arbitrary and Multiplier method correctly applied-
In the facts of the case, set/led principles for determination adequately 
D followed-However, compensation enhanced-Constitution of India, 1950-
Article 32. 
E 
Compensation-Determination of-For damages for personal injury--
Held, pecuniary and non-pecuniary heads of damages required to be taken 
into account. 
In a fire accident, which broke out during the celebration of a function 
organised by Tata Iron and Steel Company (Company), 60 persons died and 
113 were injured. The appellants who had lost their relatives in the accident 
filed writ petition under Article 32 of the Constitution on behalf of all the 
victims seeking direction against the State Government and the Company for 
F payment of appropriate compensation to the victims of the accident. It was 
alleged in the petition that the accident had taken place due to negligence 
of the officers of the Company. 
The court appointed a former Chief Justice of India to determine the 
G compensation payable to the legal heirs of the deceased and to the injured. 
The parties agreed that the compensation would be determined according to 
the principles laid down in Safia Khatoon's case, Bhagwan Das's case and 
G. Ramanaiya's case*. The former Chief Justice submitted his report wherein 
he concluded that Multiplier method had universal application and as per the 
principles laid down in the cases above-mentioned determined the 
H 
578 
LATA WADl-IWA v. STATE 
579 
compensation for deceased house wives, deceased employees and deceased A 
children between the age of5 to IO years an'd 10 to 15 years. After multiplier 
method, a conventional figure of Rs. 25,000 was added to the compensation 
amount of house wives and employees of the company. For the children below 
IO years, a uniform amount of Rs. 5,000 was determined and Rs. 25,000 was 
added as conventional figure. For the children above IO years, their annual B 
income was assessed at Rs. 12,000, multiplier of 11 was applied and 
conventional amount of Rs. 25,000 added. In case of the injured, compensation 
was arrived at ranging from 3 lakhs to 10 lakhs in case of girls and from 
Rs. 3 lakhs to 5 lakhs in case of boys. However, it rejected the claim on the 
special heads in absence of any proof and pleadings in that respect. No 
punitive or exemplary compensation was awarded. 
c 
Petitioners contended that fresh determination of compensation was 
necessary against determination of compensation because applying the 
multiplier method itself was incorrect; that the determination was vitiated as 
guiding principles for determination, were not considered; that refusal to 
award punitive or exemplary compensation itself was grossly erroneous, D 
particularly when the hazard had taken place solely on account of negligence 
on the part of the organisers; and that the report had not followed the settled 
principles for determination of compensation and committed serious error 
in not taking into account the future prospects of earning; that the 
compensation awarded for death of house-wives was wholly arbitrary; and E 
that the entire suffering being the outcome of the celebration in ultra 
hazardous conditions, adequate care ought to have been taken in determining 
the compensation even in absence of any positive data on broad principles. 
The company contended that principles in Sajia Khatoon's case had 
been duly analysed and applied; and that in the absence of any data and p 
figures for different heads of claim the only option for determination was 
broad principles on which compensation was determined in the report. 
However, it agreed that compensation amount for children could be doubled 
by the Court. 
Disposing of the petitions, the Court 
HELD: 1. In view of the report by the former Chief Justice, it cannot 
be said that the settled principle for determination of compensation has not 
been foll

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