TAMIL NADU STATE TRANSPORT CORPORATION LTD. versus S. RAJAPRIYA AND ORS.

Citation: [2005] 3 S.C.R. 737 · Decided: 20-04-2005 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

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Judgment (excerpt)

TAMIL NADU STATE TRANSPORT CORPORATION LTD. 
A 
v. 
S. RAJAPRIY A AND ORS. 
APRIL 20, 2005 
[ARIJIT PASAYAT AND S.H. KAPADIA, JJ.] 
B 
Motor Vehicles Act, 1988 : 
Section 166-Quantum of Compensation-Assessment of-Adopting 
appropriate multiplier-Deceased aged 38 years-Jn the facts and C 
circumstances of the case multiplier of 12 would be appropriate and not 16 
as adopted by Courts below. 
Multiplier-Fixation of appropriate multiplier.!-Determining factors-
Discussed 
The question which arose for consideration in the present appeal is 
whether the multiplier of 16 was appropriate while assessing the quantum 
of compensation payable on the death of a person aged 38 years in an 
automobile accident. 
Allowing the appeal, the Court 
HELD : 1. While assessing the damages to compensate the 
dependants many imponderables have to be taken into account e.g., the 
life expectancy of the deceased and the dependants, the amount that the 
deceased would have earned during the remainder of his life, the amount 
that he would have contributed to the dependants during that period, the 
chances that the deceased may not have lived or the dependants may not 
live up to the estimated remaining period of their life expectancy, the 
chances that the deceased might have got better employment or income 
or might have lost his employment or income together etc. The manner 
D 
E 
F 
of arriving at the damages is to ascertain the net income of the deceased G 
available for the· support of himself and his dependants, and to deduct 
therefrom such part of his income as the deceased was accustomed to 
spend upon himself, as regards both self-maintenance and pleasure, and 
to ascertain what part of his net income the deceased was accustomed to 
spend for the benefit of the dependants. (741-D-G) 
737 
H 
738 
SUPREME COURT REPORTS 
[2005] 3 S.C.R. 
A 
Municipal Corporation of Delhi v. Subhagwanti, 11966) 3 SCR 649; 
Gobald Motor Service Ltd. v. R.MK. Vel':'swami, 1196211 SCR 929, referred 
to. 
Davies v. Powell Duffregn Associated Collieries Ltd, (1942) AC 601; 
Baker v. Bolton, 11979) l All ER 774; Nance v. British Columbia Electric 
B Railway Co. Ltd., 11951) 2 All ER 448 and Mallett v. Mc Mong/e, (1969) 2 
All ER 178, referred to. 
2. The multiplier method involves the ascertainment of the loss of 
dependency or the multiplicand having regard to the circumstances of 
C the case and capitalizing the multiplicand by an approprfate multiplier. 
The choice of the multiplier is determined by the age of the deceased or 
that of the claimants whichever is higher and by the calculation as to 
what capital sum, if invested at a rate of interest appropriate to a stable 
economy, would yield the multiplicand by way of annual interest. In 
ascertaining this, r.egard should also be had to the fact that ultimately the 
D capital sum should also be consumed-up over the period for which the 
dependency is expected to last. The multiplier has to be adopted taking 
note of the prevalent banking rate of interest. 1742-A-C; 744-C-D) 
General Manager, Kera/a State Road Transport Corporation, 
Trivandrum v. Susamma Thomas (Mrs.) and Ors., 11994) 2 SCC 176; U.P. 
E State Road Transport Corporation and Ors. v. Trilok Chandra and Ors., 
(1996) 4 sec 362, relied on. 
Ha/sbury's Laws of England, referred to. 
3. Th·e highest multiplier has to be for the age group of 21 years to 
F 25 years when an ordinary Indian Citiun starts independently earning 
and the lowest would be in respect of a person in the age group of 60 to 
70, which is the normal retirement age. Considering the age of the deceased 
and the principles indicated above, the appropriate multiplier would be 
12 and not 16 as adopted by the Tribunal and affirmed by the High 
G Court. By applying multiplier 12, amount of compensation is fixed at 
Rs.4,50,000. The Tribunal has fixed interest @ 9% per annum from the 
date of the claim petition. Taking note of the prevailing rate of interest in 
bank deposits, the same is fixed at 7.5% per annum. (744-F-G) 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2765 of 2005. 
H 
I 
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TAMILNADUSTATETRANSPORTCORPORATIONLTD.v.S.RAJAPRIYAcPASAYAT,J.] 739 
From the Judgment and Order dated 18.9.2003 of the Madras High A 
Court in C.M.A. No. 2351 of 2003. 
Subramonium Prasad for the Appellant. 
The Judgment of the Court was delivered by 
B 
ARIJIT PASAYA T, J. Leave granted. 
Tamil Nadu State Transport Corporation Ltd. (hereinafter referred to as 
the 'Corporation') cal

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