LexNATIONAL INSURANCE COMPANY LIMITED versus PRANAY SETHI AND ORS.
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[2017] 13 S.C.R. 100
NATIONAL INSURANCE COMPANY LIMITED
v.
PRANAY SETHI AND ORS.
(Special Leave Petition (Civil) No. 25590of2014)
OCTOBER 31, 2017
(DIPAK MISRA, CJI, A. K. SIKRI, A. M. KHANWILKAR,
DR. D. Y. CJJANDRACHUD AND ASHOK BHUSHAN, JJ.]
Motor Vehicles Act. 1988
ss. 163-A. 166 and 168 - Computation of compensation -
Determination of multiplicand -Determination of income o_fdeceased
- Determination of reasonable figures on conventional heads - Held:
s. I 68 deals with concept ofjust compensation and the same is to
be decided on the foundation of fairness. reasonableness and
equitabilizv on acceptable legal standard - The determination has
to he on the foundation of evidence as regards the age and income
of deceased and !herea.fier apposite multiplier to be applied -
Formula relating to multiplier would he as indicated in *Sarla Verma
case and approved in **Reshma Kumari case - For grant <![just
compensation principle of standardization is approved so that a
specific and c~rtain multiplicand is determined for applying the
multiplier on the basis of age - The principle would include in its
ambit addition of fi1t11re prospects on the proven income at presenr
- The principle of standardization will also apply to the selfemplo.ved
or a person having.fixed salary. and determination of income would
include fi1ture prospects - While determining income of deceased
having permanµnt Joh. an addition of 50% of actual salary to the
income towards .fi1t11re prospects where the deceased was below age
of 40 years. addi1ion of 30°{, if the age of deceased was between
40 and 50 years and addition of 15% would be made if the deceased
was between the age of 50 to 60 years - If the deceased is selF
employed or on .fixed salary. addition of income towards .fi1ture
prospects would be 40% of income where deceased was he/ow 40
years of age; .P5°~ where deceased was between 40 and 50 years
of age and 10% where the deceased was between 5 0 and 60 years
of age. would he regarded as necessary method of computation -
Conventional and Traditional headv namely loss of estate, loss of
100
NATIONAL INSURANCE COMPANY LIMITED v. PRANAY
IOI
SETHI AND ORS.
consortium and funeral expenses cannot be determined on A
percentage basis - Reasonable figures on conventional heads
should be Rs.150001-, Rs.400001- and Rs.150001- respectively to
be enhanced at the rate of 10% in every three years.
Judicial Discipline:
A co-ordinate Bench of the same strength cannot take a
contrary view than what has been held by another co-ordinate Bench
- Earlier decision of co-equal Bench binds the Bench of same
strength - Precedent - Constitution of India - Art. 141.
Judgment:
Judgment per incuriam - A decision or judgment can be per
incuriam any provision in a statute, rule or regulation, which was
not brought to the notice of the court - A judgment can also be per
incuriam if it is not possible to reconcile its ratio with that of a
previously pronounced judgment of a co-equal or a larger Bench.
Answering the referred issues, the Court
HELD : 1.1 In view of the analysis made in *Sar/a Jlerma
case which has been reconsidered in ** Reshma Kumari case, so
far as the guidance provided for appropriate deduction for personal
and living expenses is concerned, the tribunals and courts should
be guided by conclusion 43.6 of ** Reshma Kumari case. The
method provided therein is approved. [Para 43] [131-D-EJ
1.2 So far as the multiplier is concerned, the claims tribunal
and the Courts shall be guided by Step 2 that finds place in
paragraph 19 of *Sar/a Jlerma case read with paragraph 42 of the
said judgment. In Reshma Kumari case, the aforesaid has been
approved. [Paras 44 and 45] [131-E-F; 132-A]
1.3 Insofar as the aforesaid multiplicand/multiplier is
concerned, it has to be accepted on the basis of income established
by the legal representatives of the deceased. Future prospects
are to be added to the sum on the percentage basis and "income"
means actual income less than the tax paid. If the same is
followed, it shall subserve the cause of justice and the
unnecessary contest before the tribunals and the courts would
be avoided. [Paras 46 and 47] [132-F-G]
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SUPREME COURT REPORTS
[2017] 13 S.C.R.
1.4 Section 168 of the Act deals with the concept of "just
compensation" and the same has to be determined on the
foundation of fairness, reasExcerpt shown. Read the full judgment & AI analysis in Lexace.