JUDGMENT

1. The present appeal is filed under Section 173 of the Motor Vehicles Act, 1988 (hereinafter ‘MV Act’) seeking reduction of compensation awarded by the learned Motor Accident Claims Tribunal vide award dated 28.08.2024 (hereafter ‘the impugned award’), passed in MACT No. 692/2019.

2. The brief facts are that on 06.07.2019 at about 9:30 p.m., Mr. Sanjeev Kumar Singh/deceased along with his father/Respondent No. 1 were returning to their home. When they reached near Surajkund

Pali Road, a truck bearing No. HR-38S-6678, being driven by Respondent No. 2 in a rash and negligent manner hit them.

3. Due to the impact they both fell on the road and sustained injuries. The deceased sustained grievous injuries on his head, whereafter, he was taken to a nearby hospital and was declared brought dead.

4. This incident led to the registration of FIR No. 419/2019 at Police Station Surajkund, for offences under Sections 279/304A of the Indian Penal Code, 1860 (‘IPC’). After the completion of investigation, the police charge sheeted Respondent No. 2 for the said offences.

5. The learned Tribunal, after examining the pleadings, evidence, and documents on record, assessed the compensation at ₹49,82,740/- and awarded an interest at the rate of 7.5% per annum to the legal heir of the deceased/Respondent No. 1. The details thereof are as under:

6. Aggrieved by the quantum of compensation awarded, the appellant – Insurance Company has preferred the present appeal.

7. The learned counsel for the appellant submitted that that learned Tribunal erred in assessing the income of the deceased at ₹34,300/-. He submitted that the deceased, at the relevant time, fell under the tax slab for which 5% income tax was payable and the same ought to have been deducted by the learned Tribunal while assessing the income of the deceased.

8. He further submitted that interest awarded at the rate of 7.5% per annum is on the higher side and that the same should be reduced to 6% per annum.

Analysis

9. The short question for consideration before this Court is whether the compensation as awarded by the learned Tribunal is adequate or whether the same ought to be reduced.

10. The learned counsel for the appellant contented that the learned Tribunal ought to have deducted the income tax from the income of the deceased. He contended that the deceased at the time of the accident fell under the tax slab for which 5% income tax was payable.

11. The Hon’ble Apex Court in the case of Sarla Verma and Ors. v. Delhi Transport Corporation and Anr.: (2009) 6 SCC 121 held that for calculating compensation, the income of the victim less the income tax should be treated as the actual income.

12. In Vimal Kanwar and Ors. v. Kishore Den and Ors: (2013) 7 SCC 476, the Hon’ble Apex Court while relying on the judgment of

Sarla Verma and Ors. v. Delhi Transport Corporation and Anr (supra) observed as under:

“22. The third issue is “whether the income tax is liable to be deducted for determination of compensation under the Motor Vehicles Act”.

23. In Sarla Verma this Court held:

“20. Generally, the actual income of the deceased less income tax should be the starting point for calculating compensation”

This Court further observed that:

“24. … Where the annual income is in taxable range, the words ‘actual salary’ should be read as ‘actual salary less tax’.”

Therefore, it is clear that if the annual income comes within the taxable range, income tax is required to be deducted for determination of the actual salary. But while deducting income tax from the salary, it is necessary to notice the nature of the income of the victim. If the victim is receiving income chargeable under the head “salaries” one should keep in mind that under Section 192(1) of the Income Tax Act, 1961 any person responsible for paying any income chargeable under the head “salaries”