RANI GUPTA & ORS. versus M/S. UNITED INDIA INSURANCE CO. LTD. & ORS.

Citation: [2009] 5 S.C.R. 721 · Decided: 08-04-2009 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

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Judgment (excerpt)

"/ 
[2009) 5 S.C.R. 721 
RANI GUPTA & ORS. 
A 
v. 
M/S. UNITED INDIA INSURANCE CO. LTD. & ORS. 
(Civil Appeal No. 2241 of 2009) 
APRIL 8, 2009 
a 
[S.B. SINHA AND CYRIAC JOSEPH, JJ.] 
MOTOR VEHICLES ACT, 1988: 
Income of deceased - Computing of - Future income - c 
Appropriate multiplier to be adopted - Held: In order to assess 
loss of dependency, an average gross future monthly income 
must be arrived at by adding the actual gross income at the 
'1 
time of death, to the maximum which the deceased might 
have got had he not met the premature death - Tribunal D 
having considered the age of deceased as 46 years and the 
fact that he had paid up the bank loan, correctly held that the 
income of deceased would have doubled at the time of his 
death- Multiplier of 10 applied by High Court cannot be said 
to be bad in law. 
E 
.-! 
ss.146 and 147- Person travelling in his friend's car died 
due to car accident - Car insured under "Private Car Package 
<; 
Policy" - Held - Insurer would be liable - Interpretation of 
; 
Statutes. 
F 
INSURANCE 
"Private Car Package Policy" - Section 11- Clause (1 )(i) 
- Liability to Third Party - Person travelling in car - Not 
carried for hire or reward - Liability of Insurer - Explained. 
G 
INTERPRETATION OF STATUTES: Motor Vehicles Act 
- HELD: is a beneficial legislation - Its provisions should be 
interpreted liberally but it does not contemplate unjust 
enrichment. 
721 
H 
722 
SUPREME COURT REPORTS 
[2009) 5 S.C.R. 
A 
The husband of the appellant, a businessman, while 
travelling in his friend's car which was insured under 
'Private Car Package Policy', died as a result of the car 
accident. The Tribunal assessed the annual income of 
the deceased at Rs.1,89,500, and keeping in view that the 
B deceased was 46 years of age and the fact that the 
children had attained the age of Majority, applied 
multiplier of 13. The Tribunal deducting 1/3 towards 
personal expenses, awarded a total compensation of 
Rs.17,40,000/-. On the appeal filed by the Insurer, the High 
c Court applied the multiplier of 10, assessed loss of 
dependency at Rs. 1,87 ,500 per annum, apportioned 2/ 
3rd as labour input, i.e. personal input of the deceased 
in business and treated 1/3rd as yield from capital asset 
and held loss due to death to be Rs.12,50,000/-. It further 
D held that the remaining loss of Rs.6,25,000/- could be 
t 
made good by the family out of y'ield from capital asset. 
In the appeal filed by the heirs of the deceased, it 
was contended that the High Court erred in applying 
multiplier of 10 instead of 13. It was submitted that for the 
E purpose of annual dependency, High Court should have 
taken into account that the deceased had paid up the 
-
loan of Rs. 14,00,000/- with which he had purchased an 
industrial plot. 
Dismissing the appeal, the Court 
-\ 
... 
F 
HELD: 1.1. Determination of the amount of 
compensation arising out of loss of life of a person, who 
was the earning member of the family, would depend 
G 
upon a large number of factors; one of them being the 
nature of job or business he was doing. For the said 
purpose, an average gross future monthly income must 
be arrived at by adding the actual gross income at the 
time of his death to the maximum which he might have 
got, had he not met a pre-mature death. [Para 12] [729-F] 
H 
RANI GUPTA & ORS. v. UNITED INDIA INSURANCE CO. 723 
LTD. & ORS . 
..; 
1.2. The Tribunal, keeping in view the fact that within 
A 
a short time, the deceased had been able to wipe off the 
entire loan taken by him from the bank and, thus, became 
the owner of an industrial plot and furthermore in view .. 
of the fact that he was only aged 46 years at the relevant 
time, thought that his income would have doubled at the 
B 
time of his death. The approach of the Tribunal was 
correct. [Para 12] [729-G, H; 730-A] 
Sar/a Dixit v. Ba/want Yadav (1996) 3 SCC 179, relied 
on 
c 
1.3. Average life expectancy in India also is one of 
the factors which must be taken into consideration for the 
. 
purpose of calculating the average gross future monthly 
. 
income. The average life expectancy in India is now 60-
-~ 
-f 
61 years. It is necessary to subtract personal and living 
D 
expenses and other statutory liabilities like payment of 
income tax etc. Ordinarily, and subject to just exceptions, 
a lump sum amount equivalent to 1/3rd of the income of 
the deceased, i.e., living and miscellaneous expenses 
from the income, should be deducted. In a case

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