Motor Vehicles Act, 1988: s.168 – Fatal accident – Just and Fair Compensation – Claimants (the heirs and legal representative of the victim-deceased) sought compensation of Rs.20 Lakhs – Tribunal estimated the deceased’s monthly income at Rs. 4000 and allowed the claim of Rs. 6,24,000 with interest – High Court increased monthly income of deceased to Rs. 5000 and awarded compensation of Rs. 11,41,000 with interest – Hence instant appeal – Held: The Tribunal and the High Court both committed grave error while estimating the deceased’s income by disregarding the Income Tax Return (ITR) of the deceased – The ITR of deceased reflected his annual income to be Rs.1,18,261/-, approx. Rs.9,855/- per month – Since the deceased is survived by the seven dependents, the appropriate deduction for personal expenses for deceased ought to be 1/5 th only and not 1/4 th as applied by the Tribunal and High Court – Further, Tribunal erred by not making any additions to future prospects of the deceased, whereas High Court by placing reliance on Sarla Verma and Pranay Sethi held that since the deceased was under 40 years of age and was selfemployed, he is entitled to addition of future prospects of 40% of his established income – There is no error in High Court’s reasoning for adding 40% of the deceased’s income towards future prospects – Further, Tribunal awarded meagre sums of Rs.10,000/- and Rs.2,000/- towards conventional heads and funeral expenses, respectively, whereas High Court while placing reliance on Pranay Sethi awarded Rs.70,000/- under conventional heads and Rs.10,000/- towards funeral expenses of the deceased – Although, High Court was correct in placing reliance on Pranay Sethi, High Court erred by not granting an increment of 10% on the conventional heads in every three years as directed in the Pranay Sethi – A three-Judge Bench of this Court in United India Insurance Co. Ltd. vs. Satinder Kaur after considering Pranay Sethi awarded spousal consortium at the rate of Rs.40,000/ and towards loss of parental consortium to each child at the rate of Rs.40,000/- – The compensation under these heads also needs to be increased by 10% – Thus, the spousal consortium is awarded at Rs.44,000/ and towards parental consortium at the rate of Rs.44,000/ each is awarded to the three children – Thus the total compensation payable to the Appellants is Rs.25,91,388/- with interest at 9% per annum from the date of filing of the application till the date of payment of the compensation to the appellants.
Motor Vehicles Act, 1988 – Beneficial Legislation – The Motor Vehicles Act, 1988 is a beneficial legislation which has been framed with the object of providing relief to the victims or their families – s.168 of the MV Act deals with the concept of ‘just compensation’ which ought to be determined on the foundation of fairness, reasonableness and equitability.
Allowing the appeal, the Court
HELD: 1. The Tribunal and the High Court both committed grave error while estimating the deceased’s income by disregarding the Income Tax Return of the Deceased. The appellants had filed the Income Tax Return (2009- 2010) of the deceased, which reflects the deceased’s annual income to be Rs.1,18,261/-, approx. Rs.9,855/- per month. The deceased’s annual income be fixed at Rs.1,18,261/-, approx. Rs.9,855/- per month keeping in mind the deceased’s Income Tax Return for the year 2009-2010. [Para 9][667-D-E, G]
2. The provisions of the Motor Vehicles Act, 1988 gives paramount importance to the concept of ‘just and fair’ compensation. It is a beneficial legislation which has been framed with the object of providing relief to the victims or their families. Section 168 of the MV Act deals with the concept of ‘just compensation’ which ought to be determined on the foundation of fairness, reasonableness and equitability. Although such determination can never be arithmetically exact or perfect, an endeavor should be made by the Court to award just and fair compensation irrespective of the amount claimed by the applicant/s. [Para 10][667-G-H; 668-A-B]
3. Since the deceased is survived by the seven dependents, the appropriate deduction for personal expenses for deceased ought to be 1/5th only and not 1/4th as applied by the Tribunal and High Court. The Tribunal erred by not making any additions to future prospects of the deceased, whereas the High Court by placing reliance on Sarla Verma and Pranay Sethi held that since the deceased was under 40 years of age and was self-employed, he be entitled to addition of future prospects of 40% of his established income. Therefore there is no error in the High Court’s reasoning for adding 40% of the deceased’s income towards future prospects. [Paras 12 and 15][668-E-F; 669-E-F]
4. The Tribunal awarded meagre sums of Rs.10,000/- and Rs.2,000/- towards conventional heads and funeral expenses, respectively, whereas the High Court while placing reliance on Pranay Sethi awarded Rs.70,000/- under conventional heads and Rs.10,000/- towards funeral expenses of the deceased. Although the High Court was correct in placing reliance on Pranay Sethi, the High Court erred by not granting an increment of 10% on the conventional heads in every three years as directed in the Pranay Sethi. Hence the High Court ought to have added the increment of 10% to the conventional heads as per the dictum in Pranay Sethi. [Para 16][669-F-G]
5. A three-Judge Bench of this Court in United India Insurance Co. Ltd. vs. Satinder Kaur after considering Pranay Sethi has awarded spousal consortium at the rate of Rs.40,000/ and towards loss of parental consortium to each child at the rate of Rs.40,000/-. The compensation under these heads also needs to be increased by 10%. Thus, the spousal consortium is awarded at Rs.44,000/ (Forty-four thousand only), and towards parental consortium at the rate of Rs.44,000/ each (Total Rs.1,32,000/) is awarded to the three children. Thus the total compensation payable to the Appellants is Rs.25,91,388/- with interest at 9% per annum from the date of filing of the application till the date of payment of the compensation to the Appellants. [Paras 17 and 18][670-F-G; 671-E-F]
Malarvizhi & Ors. v. United India Insurance CO. Ltd. & Ors. (2020) 4 SCC 228 : [2019] 16 SCR 1086; Sarla Verma & Ors. v. Delhi Transport Corporation & Anr. (2009) 6 SCC 121 : [2009] 5 SCR 1098; National Insurance Co. Ltd. v. Pranay Sethi & Ors. (2017) 16 SCC 680 : [2017] 13 SCR 100; United India Insurance Co. Ltd. v. Satinder Kaur @ Satwinder Kaur and Ors. (2021) 11 SCC 780 – relied on.
Laxmi Devi & Ors. v. Mohammad Tabbar & Anr. (2008)
12 SCC 165 : [2008] 5 SCR 436 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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