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Insurance: Multiplier should depend on the age of the deceased and not on the age of the dependants

In Sube Singh and Anr.Vs Shyam Singh (Dead) and Ors., the in a motor accident, Ajit Singh, who was at the relevant time 23 years of age died. His parents, who were in the age group of 40 to 45 years, filed a petition claiming compensation. The Motor Accident Claims Tribunal held that the established income of the deceased was around Rs.4,200/­ per month and after deduction of 50% as the deceased was unmarried, calculated the same as Rs.2,100/­ per month. Thereafter, it applied multiplier 15, taking the age of the “parents of the deceased” into consideration. This was challenged by the appellants by way of an appeal before the High Court of Punjab and Haryana at Chandigarh, being FAO No.330 of 2012 (O&M) which was partly allowed in relation to other heads of compensation. As regards multiplier applied for determination of loss of future income, the High Court held that multiplier 14 will be applicable. For that, the High Court relied on the decision of this Court of (Two Judge Bench) in Ashvinbhai Jayantilal Modi Vs. Ramkaran Ramchandra Sharma   Resultantly, the appellants have filed the present appeal, questioning the correctness of the conclusion so reached by the High Court.

The Supreme Court held that the legal position, however, is no more res integra. In the case of Munna Lal Jain (supra) decided by a three Judge Bench of this Court, it is held that multiplier should depend on the age of the deceased and not on the age of the dependants. Therefore Sarla Verma (Smt.) and Others Vs. Delhi Transport Corporation And Anr. which has been affirmed by the Constitution Bench of this Court in National Insurance Company Ltd. Vs. Pranay Sethi and Ors.4, the appellants are justified in insisting for applying multiplier 18.

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