2002 (7) TMI 834 - SC - Indian Laws

Supreme Court adjusts compensation rules, reduces interest rate, upholds exchange rate, disallows deductions.

United India Insurance Co. Ltd. Etc. Etc. Versus Patrica Jean Mahajan And Ors. Etc. Etc.

The Supreme Court restored a multiplier of 10 for compensation, reduced the interest rate to 9%, and upheld an exchange rate of Rs. 30. Deductions for ... - Issues Involved:1. Application of appropriate multiplier for compensation.2. Deduction of benefits received from social security systems.3. Rate of interest on the awarded compensation.4. Exchange rate for converting compensation amount from Dollars to Rupees.5. Finding of negligence on the part of the driver of the Troller.Detailed Analysis:1. Application of Appropriate Multiplier:The core issue was the application of the appropriate multiplier to determine the compensation amount. The Tribunal applied a multiplier of 7, which was deemed too low. The Single Judge applied a multiplier of 10, while the Division Bench applied a multiplier of 13 as per the Second Schedule of the Motor Vehicles Act. The Supreme Court held that while the Second Schedule provides a safe guide, deviations are permissible in special circumstances. Considering the high amount of multiplicand ($226,297) and the ages of the dependents, the Court restored the multiplier of 10 as applied by the Single Judge, emphasizing that a lower multiplier can be applied to a high multiplicand to strike a balance between overcompensation and undercompensation.2. Deduction of Benefits from Social Security Systems:The Insurance Company argued for deductions from the compensation amount for benefits received by the claimants under social security systems. The Tribunal had deducted these amounts, but the High Court disallowed these deductions. The Supreme Court upheld the High Court's decision, stating that only benefits directly related to the accidental death should be deducted. Benefits like life insurance and social security payments, which are not contingent upon the accidental death, should not be deducted from the compensation amount.3. Rate of Interest on Awarded Compensation:The Tribunal and the High Court awarded interest at the rate of 12% per annum. The Supreme Court reduced the interest rate to 9%, referencing the economic changes and the Reserve Bank of India's policy that had lowered interest rates. The Court emphasized that the rate of interest should reflect current economic conditions to ensure fairness.4. Exchange Rate for Converting Compensation Amount:The Tribunal applied an exchange rate of Rs. 30 per Dollar, while the Single Judge applied Rs. 47. The Division Bench reverted to Rs. 30. The Supreme Court upheld the exchange rate of Rs. 30, reasoning that the claimants had initially prayed for compensation in Rupees using this rate. The Court found no basis for changing the exchange rate to Rs. 47, as the decree was for a definite sum in Rupees, and there was no occasion to reconvert the amount.5. Finding of Negligence on the Part of the Driver:The Insurance Company challenged the finding of negligence on the part of the Troller's driver. The Supreme Court dismissed this appeal, affirming the findings of the Motor Accident Claims Tribunal and the High Court. The Court found no reason to re-assess the evidence on this point, thus upholding the original finding of negligence.Conclusion:The Supreme Court's judgment provided a balanced approach to determining compensation by restoring the multiplier of 10, reducing the interest rate to 9%, and upholding the exchange rate of Rs. 30. The Court also upheld the High Court's decision to disallow deductions for social security benefits and confirmed the finding of negligence on the part of the Troller's driver. The Motor Accident Claims Tribunal was directed to calculate the compensation accordingly, ensuring a fair and just award for the claimants.