If deceased was self-employed and below the age of 40 years, 40% addition would be made to their income as future prospects.

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION    

CIVIL APPEAL NO. 1769 OF 2021 (ARISING OUT OF SLP (C) NO. 719 OF 2018)

 

RAHUL SHARMA & ANR.                                           …APPELLANT(S)

VERSUS

NATIONAL INSURANCE COMPANY                          …RESPONDENT(S) LTD. & ORS.      

 

J U D G M E N T    

N.V. RAMANA, CJI.,

 

  1. Leave granted.

2.The appellants before us seek to impugn the judgmentdated 4th September, 2017, passed by the Delhi High Court in MAC. App. No. 740/2016.

3.The brief facts, necessary for the adjudication of thisappeal are as follows: on the intervening night of the 18th/19th May, 2010, the vehicle in which parents of the Appellants weretravelling   rammed   into   a   truck,   near   Phagwara,   Punjab. Resultantly, they succumbed to the injuries sustained in theaccident. The car was plying other relatives of the Appellants and the deceased. Thereafter, F.I.R. no. 76/10, was registeredin PS Sadar Phagwara, Punjab under Sections 249, 304­A,427 of the Indian Penal Code, 1860 in this regard. It may berelevant   to   note   that   the   vehicle   was,   during   the   relevant period,   insured   by   the   National   Insurance   Co.   Ltd.(hereinafter, referred to as NIC), the Respondent No. 1 herein.

4.The   Appellants   instituted   a   claim   petition   before   theMotor Accidents Claims Tribunal (hereinafter, “the MACT”), under Sections 166 and 140 of the Motor Vehicles Act, 1988,for grant of compensation for the death of their parents, which were registered as cases numbered, MACT No. 349/2010 (withrespect to Mrs. Manisha Sharma) and MACT No. 350/2010 (with respect to Mr. Sunil Sharma), and were adjudicated vide a common award dated 7th June, 2016.

5.The   present   appeal   pertains   to   the   claim   petitionpreferred on the account of the death of the appellants mother. 2 The   appellants’   mother,   Mrs.   Manisha   Sharma,   was   aged about 37 years and was a self employed individual. 

6.The Tribunal, while adjudicating the claim, determinedthe compensation to be Rs. 41,55,235. The Tribunal relied upon the Income Tax Return of the deceased and concludedthat   her   annual   income   was   Rs.   2,55,349.   Based   on   the dictum of this Court in  Sarla   Verma  v.  Delhi   TransportCorporation, (2009) 6 SCC 121, 50% addition was included towards future prospects and the multiplier was taken to be  Since,   the   deceased   had   two   dependents,   1/3rd  of   thedeceased’s income was deducted on account of personal and livingexpenses.The non­pecuniary   compensation   was calculated at Rs. 3,25,000. The NIC, being the insurer of the vehicle,   was   held   liable   to   pay   the   compensation   of   Rs.41,55,235 with an interest of 9% per annum from the date of filing of the claim petition.

7.Aggrieved, the insurance company preferred an appealagainst the award of the MACT before the Delhi High Court, which disposed of the appealvide the impugned judgmentdated 4th  September, 2017. The High Court, in its common judgement,calculated the pecuniary compensation asRs. 19,16,000 and the non­pecuniary damages was calculated asRs.2,50,000, for a total compensation of Rs. 21,66,000/­, in MAC. APP. 740 /2016. While passing the aforesaid impugned order,   the   High   Court   deducted   50%   of   income   towards personal and living expenses. The High Court however, heldthe deceased ineligible for the grant of future prospects as she was self­employed.  

8.Aggrieved by the impugned judgement, the Appellantshave preferred the present appeal, by way of Special Leave, impugning only the compensation as modified in MAC. App. No. 740/2016.

9.We have heard the counsel for the Appellants and thecounsel for the NIC, Respondent No. 1. The Respondents No. 2 and 3 have not tendered their appearances, despite service.The   insurance   company   has   also   placed   on   record   their written submissions, which have been perused.

  1. This Court in a Five Judge Bench decision in National Insurance  Co.  Ltd.  v.  Pranay  Sethi,  (2017)  16  SCC  680, clearly held that in case the deceased is self­employed and below the age of 40, 40% addition would be made to theirincome as future prospects. In the present case, the deceased was selfemployed and was 37 years old, therefore, warranting   addition   of   40%   towards   future   prospects.   Moreover, Pranay   Sethi  (supra), affirming the ratio in  Sarla   Verma(supra), held that the deduction towards personal and living expenses for a person such as the deceased who was marriedwith two dependents, to be onethird (1/3rd). Since the High Court   in   the   impugned   judgment   deducted   50%   the   same merits interference by this Court. 

11.Therefore,inlight  of  the   above,  the   compensation  asawarded to the Appellants by the High Court is modified to theextent   of   deduction   towards   personal   and   living   expenses (determined to be one­third (1/3rd)) and 40% addition towards future prospects. The annual income of the deceased (Mrs.Manisha Sharma) was Rs. 2,55,349. After deducting personal and living expenses and adding future prospects, the annualincome is determined at Rs. 2,38,326/.The multiplier of 15 isappropriate, considering the age of the deceased. Accordingly,the   total   loss   of   dependency,   is   calculated   to   be Rs. 35,74,890/. We do not find any reason to interfere with any other heads as determined by the High Court.

12.Hence,the total compensation is determined tobe, Rs. 38,24,890/ payable with interest of 9% per annum fromthe date of filing of the claim petition till realisation, set off against the part compensation already received, if any. 

  1. This Civil Appeal is disposed of in the aforesaid terms.

 

..…..…………………..CJI. (N.V. RAMANA)  

………………………..J. (SURYA KANT)        

…..…………………J.        (ANIRUDDHA BOSE)

 

NEW DELHI;

MAY 07, 2021 7

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