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Remarking that it is not uncommon in Indian Society for the mother­-in-­law to live with her daughter and son­-in-­law during her old age and be dependent upon her son­-in-­law for her maintenance, the Supreme Court on Monday held that a mother-in-law would qualify as a “legal representative” under Section 166 of the Motor Vehicles Act, 1988 and was entitled to maintain a claim petition. 

“We are also of the view that in order to maintain a claim petition, it is sufficient for the claimant to establish his loss of dependency. Section 166 of the MV Act makes it clear that every legal representative who suffers on account of the death of a person in a motor vehicle accident should have a remedy for realization of compensation”, held the Court.

The Court found that the MV Act did not define the term ‘legal representative’. It added that the terms generally meant a person who in law represents the estate of the deceased person and includes any person or persons in whom legal right to receive compensatory benefit vests. 

The bench was further of the view, that the term ‘legal representative’ should be given a wider interpretation and it should not be confined only to mean the spouse, parents and children of the deceased as the MV Act is a benevolent legislation enacted for the object of providing monetary relief to the victims or their families

“A ‘legal representative’ may also include any person who intermeddles with the estate of the deceased.   Such person does not necessarily have to be a legal heir. Legal heirs are the persons who   are entitled to inherit the surviving estate of the deceased. A legal heir may also be a legal representative”, said a bench of Justices S Abdul Nazeer and Krishna Murari.

An appeal was filed before the Supreme Court against the judgment passed by the High Court of Kerala at Ernakulam through which it had scaled down the amount of compensation payable to the appellants while modifying  the  award  dated passed   by   the   Motor   Accident   Claims   Tribunal, Kottayam in 2013.

The MACT took the annual salary of the deceased as Rs.8,87,148, applied a multiplier of ‘11’ and   deducted one-­fourth (1/4th) of the income towards his personal expenses  and went on to award a sum  of Rs.73,18,971/­  towards loss of dependency.

On the other hand, the High Court held that appellant no.4, the mother-in-law of the deceased, was not his legal representative. It further held that   the   MACT   ought   to   have   applied   split   multiplier   for the assessment of the dependency compensation.   

The High Court fixed monthly income of the deceased as Rs.40,000/­ and thus deducted one­-third (1/3rd) of the income towards his personal expenses.

Furthermore, a multiplier ‘7’ was applied by the High Court  for calculating dependency compensation for the post-­retiral period and, for the pre­retirement period, a multiplier of ‘4’ was applied.

Accordingly, the High Court awarded   compensation   of Rs.23,65,728/­ towards loss of dependency for pre­-retiral period and a sum of Rs.22,40,000/­ towards   loss   of   dependency   for post­-retiral period.  A sum of Rs.1,00,000/- was   awarded   towards   loss   of   consortium, Rs.25,000/­   towards   funeral   expenses,   and Rs.80,000/­ towards loss of love and affection. In total, a sum of Rs.48,39,728/­ was awarded as compensation by the High Court.

Thus, the following questions arose for consideration:

(I) whether the High Court was justified in precluding the mother-­in-­law of the deceased (appellant   no.4)   as   his   legal  representative?  

(II) whether the High Court was justified in applying a split multiplier?  

(III)  based   on   the   findings   on   the preceding questions, what is the amount of compensation that should be awarded to the appellants?

The Bench relied on the Kerala Motor Vehicle Rules, 1989, which defined the term ‘legal representative’ to include a person who in law   is   entitled   to   inherit   the   estate   of   the deceased if he had left any estate at the time of his death and also includes any legal heir of the   deceased   and   the   executor or administrator of the estate of the deceased.

Holding that percentage of deduction for personal expenses could not be governed by a rigid rule or formula of universal application, the court held that the same also did not depend upon the basis of relationship of the claimant with the deceased.

Furthermore, while relying on a plethora of judgments,  the top Court held that the  time of calculation of the income, the Court has to consider the actual income of the deceased and addition should be made to take into account future prospects.

It added, while the evidence in a given case may indicate a different percentage of increase, standardization   of   the   addition   for   future   prospects   should   be made   to   avoid   different   yardsticks   being   applied   or   different methods   of   calculation   being   adopted.    Hence, the High Court was not found to be justified in applying split multiplier in the instant case.

While relying on the salary slip of the deceased and including future prospects into the consideration, taking the mother-in-law as a dependant, the Court awarded a  compensation of Rs.85,81,815/­- with an interest at the rate of 7.5% per annum from the date of the claim petition till the date of its realization.

Cause Title: N. Jayasree & Ors. v Cholamandalam Ms General Insurance Company Ltd.