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MOTOR VEHICLES ACT, 1988: Fatal motor accident – Claim petition – Compensation – Computation of income of deceased – Deductions – Multiplier – Compensation towards revision in pay, loss of love and affection and consortium – Held : Deduction from the income of deceased towards HRA, CCA, EPF, GIS, medical allowance should not have been made by Tribunal – As deceased was married, 1/3rd should be deducted from her income towards personal expenses – Annual income of deceased, thus, calculated to Rs. 1,89,640/- – Addition of 30% by way of future prospects allowed – Deceased being 41 years of age, multiplier 14 to be applied – Accordingly compensation calculated to Rs. 22,34,960/- – Further, a sum of Rs. 25,000/- awarded towards loss of love and affection and consortium – Thus, total compensation payable to claimants rounded off to Rs. 22,60,000/- with 6% interest from date of filing of claim petition – Respondents jointly and severally liable to make the payment. The legal heirs and dependants of a victim of fatal motor accident filed a claim petition before the Motor Accident Claims Tribunal, claiming Rs.40,00,000/- as compensation. The deceased was 41 years of age at the time of the accident and was employed. The Tribunal deducted House Rent Allowance, City Compensatory Allowance and Medical allowance etc and calculated her total carry home salary to be Rs.10,000/- (annual equivalent being Rs.1,20,000/-. It made further deduction of 40% towards personal expenses and, applying the multiplier 11, awarded Rs.7,92,000/- as compensation along with 6% interest. The High Court applied the multiplier of 14 and accordingly enhanced the compensation by a further sum of Rs.2,16,000/- In the instant appeal filed by the claimants, it was contended for the appellants that the Tribunal should not have deducted HRA, CCA, EPF, contribution towards Group Insurance Scheme, and repayment of computer advance from the income of the deceased; that the deduction of 40% towards personal expenses was not correct; that the revision of pay scale which had come into force before the death of the victim should have been taken into consideration; and that compensation towards loss of love and affection, consortium and funeral rites should also have been allowed. =Partly allowing the appeal, the Court HELD: (a) Computation of Income : 1.1 The 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. 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/-. Accordingly, the annual income of the deceased would amount to Rs. 1,84,212/-. [para 11-12] [583-B-C] Raghuvir Singh Matolya & Ors. v. Hari Singh Malviya & Ors., 2009 (5) SCR 379=(2009) 15 SCC 363 and Sarla Verma (Smt.) and others v. Delhi Transport Corporation & Anr., 2009 (5) SCR1098=(2009) 6 SCC 121 – relied on. (b) Deduction for Personal Expenses : 1.2 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 is rounded off to Rs.1,22,800/-. [para 14] [583-G-H] (c) Revision in Pay Scale : 1.3 In Sarla Verma this Court laid down a `rule of thumb’ with respect to addition in income due to future prospects and observed that the addition should be only 30% if the age of the deceased was 40 to 50 years. In the instant case, the deceased was aged 41 years. Thus, an addition of 30% by way of future prospects is allowed. 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 Rs.22,34,960/-. [para 15-16] [584-A-C] Compensation for Loss of Love and Affection and Consortium: 1.4 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 instant case, that of a wife and mother, in terms of money. However, a sum of Rs.25,000/- is awarded for loss of love and affection and consortium. [para 17] [534-D-E] 1.5 Thus, total compensation payable to the claimants-appellants would be 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 petition. The respondents are jointly and severally liable to make the payment. [para 18 and 20] [534-F- G] Case Law Reference: 2009 (5) SCR379 relied on para 9 2009 (5) SCR1098 relied on para 13 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1440 of 2011. From the Judgment & Order dated 07.08.2009 of the High Court of Punjab & Haryana at Chandigarh in First Appeal No. 2662 of 2008. Ashwani Kumar, Kalyan V. for the Appellants. Manjeet Chawla for the Respondents.

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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)

 VERSUS

Bachitar Singh & Ors. ...Respondent(s)

 J U D G M E N T

GANGULY, J.

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 

 hospital.

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 

 High Court.

 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 

 income.

 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/-

 D.P -Rs.3,550/-

 D.A. -Rs.2,556/-

 HRA -Rs.885/-

 CCA -Rs.200/-

 Med. Allowance -Rs.250/-

 Gross Total

 -Rs.14,541

 Deduction

 EPF -Rs.780/-

 GIS -Rs.30/-

 Computer Advance -Rs.500/-

 Total Deduction

 -Rs.1.310/-

 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 
 exceed six."

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 

 Rs.1,22,800/-.

 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 

 Rs.22,34,960/-.

 d Compensation for Loss of Love and Affection, Consortium, 
 Funeral Rites

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 

 petition.

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. 

 .......................J.
 (G.S. SINGHVI) .......................J.
New Delhi (ASOK KUMAR GANGULY)
February 07, 2011

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