2021 Supreme(SC) 694

SUPREME COURT OF INDIA
(From the High Court of M.P at Gwalior)
M.R. SHAH, SANJIV KHANNA, JJ.
Smt. Meena Pawaia & Ors. - Appellants
Versus
Ashraf Ali & Ors. - Respondents
Civil Appeal No. 6724 of 2021
Decided On : 18-11-2021

IMPORTANT POINTS
(1) Determination of income while computing compensation has to include future prospects.
(2) Multiplier has to be adopted/applied considering age of deceased and not age of parents.
(3) Fatal accident – Merely because in execution proceedings they might have accepted amount as awarded by High Court, may be as full and final settlement, it shall not take away right of claimants to claim just compensation and shall not preclude them from claiming enhanced amount of compensation which they as such are held to be entitled to.

Headnote:

(A) Motor Vehicles Act, 1988 – Sections 168 and 173 – Fatal accident – High Court reduced amount of compensation from Rs.12,85,000/- as awarded by Claims Tribunal to Rs.6,10,000/- – Tribunal deducted ½ over his own personal expenses as he was a bachelor – However, Tribunal applied multiplier on the basis of age of parents of deceased – Deceased at the time of accident was aged 21-22 years and that he was a 3rd year student in civil engineering – Therefore, it can be said that looking to his educational qualification he was having a bright future – Tribunal assessed income of deceased at Rs.15,000/- per month for the purpose of awarding compensation – However, by impugned judgment and order, High Court has reduced compensation and determined income of deceased at Rs.5,000/- per month – Awarding future economic loss to claimants considering income of deceased as Rs.5,000/- is not sustainable at all – Even labourers/skilled labourers were getting Rs.5,000/- per month under Minimum Wages Act in year 2012 – As deceased was studying in 3rd/4th semester of civil engineering, he cannot be considered worse than labourers/skilled labourers. (Paras 2 and 8)

(B) Motor Vehicles Act, 1988 – Sections 168 and 173 – Fatal accident – Compensation – Future prospects – While determining income, addition of 50% of actual salary to income of deceased towards future prospects, where deceased had a permanent job and was below age of 40 years, should be made – Addition should be 30%, if age of deceased was between 40 to 50 years – In case deceased was between age of 50 to 60 years, addition should be 15% – Actual salary should be read as actual salary less tax – In case deceased was self-employed or on a fixed salary, addition of 40% of established income should be warrant where deceased was below age of 40 years – Addition of 25% where deceased was between age of 40 to 50 years and 10% where deceased was between age of 50 to 60 years should be regarded as necessary method of computation – Established income means income minus tax component – Determination of income while computing compensation has to include future prospects so that method will come within ambit and sweep of just compensation as postulated under Section 168 of Motor Vehicles Act – To have the perception that he is likely to remain static and his income to remain stagnant is contrary to fundamental concept of human attitude which always intends to live with dynamism and move and change with time – Even in case of a deceased who was not serving at the time of death and had no income at the time of death, their legal heirs shall also be entitled to future prospects by adding future rise in income, i.e., addition of 40% of income determined on guesswork considering educational qualification, family background etc., where deceased was below age of 40 years – Claimants shall be entitled to future economic loss at Rs.14,000/- per month – Deceased at the time of accident was aged between 21-22 years – Multiplier has to be adopted/applied considering age of deceased and not age of parents – Multiplier of 18 would apply – Claimants shall be entitled to Rs.15,12,000/- towards future economic loss – Impugned judgment and order passed by High Court modified – Claimants shall be entitled to total sum of Rs.15,82,000/- with 7% interest. (Paras 10, 11 and 14)

(C) Motor Vehicles Act, 1988 – Sections 168 and 173 – Fatal accident – Just compensation – Motor Vehicles Act is a benevolent Act and claimants are entitled to just compensation – Merely because in execution proceedings they might have accepted amount as awarded by High Court, may be as full and final settlement, it shall not take away right of claimants to claim just compensation and shall not preclude them from claiming enhanced amount of compensation which they as such are held to be entitled to. (Para 13)

Facts of the case:

Feeling aggrieved and dissatisfied with the impugned judgment and order dated 18.02.2020 passed by the High Court of Madhya Pradesh Bench at Gwalior in MA No. 1319 of 2016, by which the High Court has partly allowed the said appeal preferred by the Union of India/Railways and has reduced the amount of compensation from Rs.12,85,000/- (awarded by the claims tribunal) to Rs.6,10,000/-, original claimants have preferred the present appeal.

Findings of Court:

Present appeal is partly allowed to the aforesaid extent with token cost which is quantified at Rs.10,000/- to be paid to original claimants also to be deposited in Tribunal within a period of six weeks from today and same may be paid to the original claimants.

Result : Appeal Partly allowed.