Only income tax can be deducted for calculating the multiplicand for compensation.

ORDER

1. Leave granted.

2. Heard the learned counsel appearing for the appellants and the learned counsel appearing for the first respondent. This appeal arises out of a claim for compensation filed by the appellants before the Motor Accident Claims Tribunal at Delhi (the Tribunal) under Section 166 of the Motor Vehicles Act, 1988. The claim was made on account of the death of one Sunil Taneja (the deceased). The first two appellants are the parents of the deceased. The third appellant is the widow of the deceased and the fourth and fifth appellants are the children of the deceased.

3. On 3rd February 2007, the deceased was travelling by a Tata Qualis vehicle from Khargone in Madhya Pradesh to Shirdi in Maharashtra. A truck insured with the first respondent gave a dash to the vehicle by which the deceased was travelling. As a result of the impact of the accident, the deceased died on the spot. The deceased was working as an Assistant Vice President (Exports) in a private company. The Tribunal granted compensation of Rs.1,01,50,000/- with interest thereon at the rate of 7.5% per annum. The award of the Tribunal was challenged before the High Court by the appellants as well as the first respondent. Both the appeals were dismissed.

4. The main submission of the learned counsel appearing for the appellants is that for calculating the multiplicand, the Tribunal deducted several components of income such as House Rent Allowance, Conveyance Allowance, Leave Travel Allowance etc. which is not permissible in view of the decision of the Constitution Bench in the case of National Insurance Co. Ltd. v. Pranay Sethi & Ors, 2017(16) SCC 680. He urged that except for the deduction on account of income tax, no other deduction was permissible. The learned counsel appearing for the first respondent supported the view taken by the Tribunal and the High Court.

5. The Annexure P/1 shows that the monthly salary of the deceased was Rs.1,13,065/-. This amount is without deduction of income tax. As held in the case of Pranay Sethi1, the income required to be taken into consideration for computing multiplicand is the actual income less tax paid. However, the Tribunal has taken into consideration only the basic salary of Rs.44,625/- per month and has ignored all the allowances such as Conveyance Allowance, House Rent Allowance etc. The deductions made by Tribunal are not at all justified except the deduction of driver assistance of Rs.6,600/-. Though the amount of income tax paid by the deceased is not on record, a reasonable amount will have to be deducted on the said account. After making allowance for income tax and after deducting the amount payable on account of driver assistance, the monthly income of the deceased will be Rs.95,000/-.

6. In terms of the decision of this Court in the case of Pranay Sethi1, 50% of Rs.95,000/- will have to be added towards future prospects of increase in earnings. Therefore, the income will have to be taken at Rs.1,42,500/-. As there are five dependents, in terms of the decision of this Court in the case of Sarla Verma (Smt) & Ors. v. Delhi Transport Corporation & Anr., 2009 (6) SCC 121, one fourth of the amount will have to be deducted on account of personal expenditure. Thus, the multiplicand will have to be taken as Rs.1,05,875/- after deducting a sum of Rs.36,625/-. Considering the fact that age of the deceased was 36 years, multiplier of 15 has been rightly applied by the Tribunal in the light of the decision in the case of Sarla Verma2. By applying multiplier of 15, the compensation payable will be (Rs.1,05,875x12x15) Rs.1,90,57,500/-. The conventional amounts of Rs.15,000/-, Rs.40,000/- and Rs.15,000/- towards loss of the estate, loss of consortium and funeral expenses will have to be added. Thus, the total compensation amount payable to the appellants will be Rs.1,91,27,500/-. Interest will be payable on the said amount, as directed by the Tribunal.

7. Accordingly, the appeal is partly allowed with no order as to co