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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.1440 OF 2011
(Arising out of Special Leave Petition(C) No.36770/2009)
Sunil Sharma & Ors. ...Appellant(s)
Bachitar Singh & Ors. ...Respondent(s)
J U D G M E N T
1. Leave granted.
2. On 2.08.2006, around 4.40 PM, one Mrs. Sunita Sharma (aged 41
years) was returning to Panchkula from Chandigarh on her
scooter, when the offending vehicle (a Tata 407 bearing
registration no. HR-58-5649) driven by the second respondent
hit her and ran over her. She was declared dead when taken to
3. Legal heirs of the deceased, her husband and two children,
filed a claim petition before the Motor Accident Claims
Tribunal (MACT) claiming Rs.40,00,000/- as compensation,
along with interest @ 24% p.a.
4. MACT awarded total compensation of Rs.7,92,000/-. It
calculated the same by arriving at gross salary of
Rs.14,541/- (based on salary certificate provided by Haryana
Women Development Corporation Ltd.), the employer of Mrs.
Sunita Sharma. From the same, Rs.1310/- was deducted on
various accounts- she was an income tax assessee, was paid
HRA amounting to Rs.885/-, CCA Rs.200/- and medical allowance
Rs.250/-. MACT concluded that these sums could not be taken
into account in the total salary of Sunita. Thus, her total
carry home salary was taken to be Rs.10,000/- (annual
equivalent being Rs.1,20,000/-). A deduction of 40% was made
for personal expenses, as she was a working woman and was
also maintaining a scooter. Thus, dependency was calculated
at Rs.72,000/-, to which a multiplier of 11 was applied.
Hence, compensation was calculated at Rs.7,92,000/- along
with interest at the rate of 6% p.a.
5. Aggrieved by the award of MACT, the claimants filed an appeal
before the High Court of Punjab and Haryana for enhancement
of compensation. The High Court applied the multiplier of 14,
instead of 11 applied by MACT. The High Court took annual
dependency same as that calculated by MACT, i.e. Rs.72,000.
Accordingly, High Court awarded Rs.2,16,000/- over and above
what was awarded by MACT.
6. Still aggrieved, the claimants filed the present appeal
before this Court. The claimants, appellants in the present
appeal, contended that:
a. MACT should not have deducted HRA, CCA, EPF Group Insurance
Scheme and computer advance from the income of the deceased
and these deductions should not have been upheld by the
b. Deduction of 40% for personal expenses, which was upheld by
the High Court, was not correct.
c. MACT and the High Court did not take into consideration the
revision in pay scale of the deceased that came into force
from January 2006 (before her death) while calculating her
d. High Court did not grant any compensation for loss of love
and affection, consortium and expenses towards funeral
rites of the deceased.
7. We have heard the parties and perused the evidence on record,
along with the judgments of the Tribunal and High Court. We
now proceed to deal with each point separately.
a. Computation of Income
8. In the case of National Insurance Co. Ltd. v. Indira
Srivastava & Ors. [AIR 2008 SC 845], S.B. Sinha J, has
observed that "The term 'income' has different connotations
for different purposes. A court of law, having regard to the
change in societal conditions must consider the question not
only having regard to pay packet the employee carries home at
the end of the month but also other perks which are
beneficial to the members of the entire family. Loss caused
to the family on a death of a near and dear one can hardly be
compensated on monitory terms." His Lordship also stated that
if some facilities were being provided whereby the entire
family stood to benefit, the same must be held to be relevant
for the purpose of computation of total income on the basis
of which the amount of compensation payable for the death of
the kith and kin of the applicants was required to be
determined. This Court held that superannuation benefits,
contributions towards gratuity, insurance of medical policy
for self and family and education scholarship were beneficial
to the members of the family. This Court clarified that by
opining that 'just compensation' must be determined having
regard to the facts and circumstances of each case. The basis
for considering the entire pay packet is what the dependents
have lost in view of death of the deceased. It is in the
nature of compensation for future loss towards the family
income" and that "the amounts, therefore, which were required
to be paid to the deceased by his employer by way of perks,
should be included for computation of his monthly income as
that would have been added to his monthly income by way of
contribution to the family as contradistinguished to the ones
which were for his benefit. We may, however, hasten to add
that from the said amount of income, the statutory amount of
tax payable thereupon must be deducted."
9. In Raghuvir Singh Matolya & Ors. v. Hari Singh Malviya &
Ors., [(2009) 15 SCC 363], this Court has observed that
dearness allowance and house rent allowance should be
included for computation of income of the deceased.
10. In the present case, Haryana Women Development Corporation
Ltd. certified that the deceased had drawn her salary for the
month of July, 2006 as under:
Basic Pay -Rs.7,100/-
Med. Allowance -Rs.250/-
Computer Advance -Rs.500/-
Net Payable= Rs.14,541 - Rs.1,310 = Rs.13,231/-
11. Based on the aforementioned judgments, we are of the view
that deductions made by the Tribunal on account of HRA, CCA
and medical allowance are done on an incorrect basis and
should have been taken into consideration in calculation of
the income of the deceased. Further, deduction towards EPF
and GIS should also not have been made in calculating the
income of the deceased.
12. Thus, we calculate the income of the deceased by taking the
abovementioned allowances into consideration. However, the
computer advance should not form a part of the monthly
income. The monthly income of the deceased thus amounts to
Rs.15,351/-. Thus, the annual income of the deceased would
amount to Rs. 1,84,212/-.
b. Deduction for Personal Expenses
13. The Tribunal deducted 40% from the income of the deceased by
way of personal expenses and the same was upheld by the High
Court. We are of the view that both courts erred in doing the
same in light of the judgment in the case of Sarla Verma
(Smt.) and others v. Delhi Transport Corporation & Anr.,
[(2009) 6 SCC 121], wherein this Court held:
"we are of the view that where the deceased was
married, the deduction towards personal and living
expenses of the deceased, should be one-third
(1/3rd) where the number of dependent family members
is 2 to 3, one-fourth (1/4th) where the number of
dependent family members is 4 to 6, and one-fifth
(1/5th) where the number of dependent family members
14. Hence, we hold that as the deceased was married, a deduction
of 1/3rd should be made to her income by way of personal
expenses. After such deduction, the income of the deceased
would thus amount to Rs.1,22,808/-, which we round off to
c. Revision in Pay Scale
15. In Sarla Verma (supra), this Court laid down a `rule of
thumb' with respect to addition in income due to future
prospects. This Court observed that the addition should be
only 30% if the age of the deceased was 40 to 50 years.
16. In the present case, the deceased was aged 41 years. Thus, we
allow an addition of 30% by way of future prospects. The
annual income of the deceased would thus be Rs.1,59,640/-.
Considering the age of the deceased, a multiplier of 14 is to
be applied. Accordingly, annual dependency comes to
d Compensation for Loss of Love and Affection, Consortium,
17. In cases of fatal motor accidents, some amount must always be
awarded by way of compensation for loss of love and affection
and consortium. It is of course impossible to compensate for
the loss of a life, in the present case, that of a wife and
mother, in terms of money. However, we can make an attempt to
do so. Accordingly we award Rs.25,000/- for loss of love and
affection and consortium.
18. Thus, total compensation payable to the claimants-appellants
is Rs.22,59,960/- which is rounded off to Rs.22,60,000/- with
interest at the rate of 6% from the date of filing the claim
19. Accordingly the appeal of the claimants-appellants is allowed
to the extent indicated above.
20. The respondents are jointly and severally liable to make the
aforesaid payment, after adjusting payment, if any, is made.
Such payment is to be made within three months. No costs.
(G.S. SINGHVI) .......................J.
New Delhi (ASOK KUMAR GANGULY)
February 07, 2011