Incentives that form a permanent feature of an employee's salary must be included in income for dependency calculations under the Motor Vehicles Act; compensation must also incorporate standardized deductions, future prospects, and conventional heads like consortium and loss of estate.

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SUDEEPTI SHARMA J.

1. The present appeal has been preferred against the award dated 05.01.2013 passed by the learned Motor Accident Claims Tribunal, Pathankot in the claim petition filed under Section 166 of the Motor Vehicles Act, 1988 (for short, 'the Tribunal’) for enhancement of compensation granted to the claimant to the tune of Rs.36,09,500/- along with interest @9% per annum on account of death of Rakesh Mahajan in a Motor Vehicular Accident, occurred on 11.08.2011.

2. As sole issue for determination in the present appeal is confined to quantum of compensation awarded by the learned Tribunal, a detailed narration of the facts of the case is not required to be reproduced here for the sake of brevity.

SUBMISSIONS OF LEARNED COUNSEL FOR THE PARTIES

3. The learned counsel for the claimants-appellants contends that the amount assessed by the learned Tribunal is on the lower side and deserves to be enhanced. Therefore, he prays that the present appeal be allowed and amount of compensation be enhanced as per latest law.

4. Per contra, learned counsel for respondent No.3-Insurance Company, however, vehemently argues that the compensation awarded by the learned Tribunal is on the higher side and deserves to be reduced. He further contends that the learned Tribunal has wrongly included incentives for the calculation of salary of the deceased. The same is required to be excluded in calculation of the said income as the same is variable in nature. He further points out that respondent No.3 - Insurance Company has filed a separate appeal ie. FAO No.3461 of 2013 titled as “National Insurance Company Limited Vs. Dimple Kumari and others”, challenging the quantum of compensation. Therefore, he prays for dismissal of the present appeal and compensation be reduced as per latest law.

5. I have heard learned counsel for the parties and perused the whole record of this case with their able assistance.

SETTLED LAW ON COMPENSATION

6. Hon’ble Supreme Court in the case of Sarla Verma Vs. Delhi Transport Corporation and Another [(2009) 6 Supreme Court Cases 121], laid down the law on assessment of compensation and the relevant paras of the same are as under:-

“30. Though in some cases the deduction to be made towards personal and living expenses is calculated on the basis of units indicated in Trilok Chandra, the general practice is to apply standardised deductions. Having a considered several subsequent decisions of this Court, we are of the view that where the deceased was married, the deduction towards personal and living expenses of the deceased, should be one-third (1/3rd) where the number of dependent family members is 2 to 3, one-fourth (1/4th) where the number of dependent family members is 4 to 6, and one-fifth (1/5th) where the number of dependent family members exceeds six.

31. Where the deceased was a bachelor and the claimant are the parents, the deduction follows a different principle. In regard to bachelors, normally, 50% is deducted as personal and living expenses, because it is assumed that a bachelor would tend to spend more on himself. Even otherwise, there is also the possibility of his getting married in a short time, in which event the contribution to the parent(s) and siblings is likely to be cut drastically. Further, subject to evidence to the contrary, the father is likely to have his own income and will not be considered as a dependant and the mother alone will be considered as a dependant. In the absence of evidence to the contrary, brothers and sisters will not be consid