The court emphasized the correct calculation of compensation and the obligation of the insurer to pay the enhanced award to the claimant.

1. Asha Kharbanda, suffered injuries in a motor vehicular accident that occurred on 24.11.2007 due to the negligent driving of truck bearing registration no.DL-1GB-4525 by the first respondent (driver), the said vehicle being registered in the name of the second respondent (owner) and concededly insured against third party risk with the third respondent (insurer) for the period in question. She remained under treatment but succumbed to the injuries on 10.06.2008.

2. On 20.10.2008, the husband and two sons of the victim instituted accident claim case (MACT suit no. 633/2008) impleading the driver, owner and insurer of the said truck as party respondents, they being respondents in the same order in the appeal as well. On the basis of the inquiry held, the Motor Accident Claims Tribunal (Tribunal), by judgment dated 20.05.2011, upheld the case holding the truck driver/first respondent guilty of negligence. The tribunal awarded compensation in the total sum of Rs.11,43,205/- adding the interest at the rate of 7.5% p.a. The insurer had taken the plea of breach of the terms and conditions of the insurance policy on the ground that the driver was not holding a valid licence on the relevant date. This fact was held to be proved and thus, the insurer which was called upon to pay the compensation was also granted recovery rights against the driver and owner (i.e. the first and second respondents respectively).

3. The appeal at hand was filed seeking enhancement of compensation. It was put in the list of ‘Regulars’, to come up on its own turn as per order dated 19.02.2016. When it is taken up for hearing, there is no appearance on behalf of the appellants or second respondent. The matter has been heard with the assistance of the learned counsel representing the third respondent and by perusal of the record.

4. The tribunal has found that the victim was 47 years old on the date of cause of action. It held that she was earning livelihood by running a boutique from her residence. In order to substantiate the said engagement of the deceased in gainful work, the claimants had proved the Income Tax Returns (ITRs) for several years (Ex. PW1/19 to 24). The last of the said ITRs (Ex. PW1/24) was filed on 28.03.2008 and is for the assessment year (AY) 2007-2008 which would correspond to the financial year 2006-2007. Since the said financial year would close on 31.03.2007, the accident having occurred in November 2007, there is no reason why the income declared in the said ITR should have been ignored and the income for the preceding assessment year 2006-2007 (which would correspond to financial year 2005-2006) should be adopted.

5. The tribunal, it is noted, has also committed another error by making a deduction of 45% of the annual income towards overhead expenses. It had to be borne in mind that the income was declared by the individual after taking into account the profit and loss account which would also cover the expenditure incurred. Therefore, there was no logical reason for such deduction. The calculation of loss of dependency would thus need to be made accepting the last declared annual income of Rs.1,36,110/-.

6. The deceased was a self-employed person and having regard to the ruling of the Constitution Bench of the Supreme Court rendered on 31.10.2017 in SLP (C) 25590/2014, National Insurance Company Ltd. Vs. Pranay Sethi and Ors, 25% has to be added towards future prospects, regard being had to the fact that the deceased was 47 years old at the relevant point of time. The addition of 50% by the tribunal on this account, thus, is found to be erroneous.

7. Deducting one-third towards personal and living expenses and applying the multiplier of 13, the loss of dependency is re-calculated as [Rs.1,36,110/- x125/100x2/3 x13] Rs.14,74,525/-. Since the tribunal had reached the figure of Rs.6,89,020/- under the head of loss of dependency, the award would need to be enhanced by [Rs.14,74,525/- (-) Rs.6,89,020/-] Rs.7,85,505/- (Rupees Seven L