NUTAN RANI AND ANR. versus GURMAIL SINGH AND ORS. on 20 July 2018

NUTAN RANI AND ANR.

v.

GURMAIL SINGH AND ORS.

(Civil Appeal No. 6639 of 2018)

JULY 20, 2018

[DIPAK MISRA, CJI, A.M. KHANWILKAR ANDDR. D.Y. CHANDRACHUD, JJ.]

Motor Vehicles Act, 1988 – s. 166 – Compensation – Awardof – Death in motor accident of 30 years old salesman having salaryof Rs.3,000 per month – Computation of income of the deceased –Addition on account of future prospects – Deduction of one-thirdtowards personal expenditure – Propriety of – Held: Whilecomputing income of the deceased, an addition of 40% on accountof towards future prospects, in view of the age of the deceased, iswarranted as also deduction of one-third towards personal expensesis proper – High Court erred in not granting the benefit of futureprospects in computing the income of the deceased – Totalcompensation payable to the legal heirs calculated accordingly.

A 30 years old salesman died in a motor vehicle accidentand his heirs were awarded compensation by the tribunal whichwas enhanced by the High Court. In the instant appeal, issuearose whether the High Court while computing the income ofthe deceased was correct in not adding on account of futureprospects and deducting 1/3[rd] of the amount towards personalexpenditure.

Allowing the appeal, the Court

HELD: The High Court erred in not granting the benefitof future prospects in computing the income of the deceased.Having due regard to *National Insurance Company Ltd. v PranaySethi’s case, an addition of 40% on account of towards futureprospects, in view of the age of the deceased, is warranted. Thededuction of one-third towards personal expenses is proper. Thetotal compensation payable to the appellants in terms of thejudgment in Pranay Sethi is computed as Rs.6,41,200/-. Interest

607

A

B

CD

E

F

G

H

Ais allowed on the said amount at 9 per cent per annum from thedate of the petition until payment. [Paras 6-8][609-D-F;610-A-B]

*National Insurance Company Ltd. v. Pranay Sethi(2017) 16 SCC 680 – referred to.

B

Case Law Reference

(2017) 16 SCC 680

referred toPara 6

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6639of 2018.

C

From the Judgment and Order dated 23.02.2011 of the High Courtof Punjab and Haryana at Chandigarh in FAO No. 1949 of 1998 (O&M).

Siddharth Mittal, Nayan Nepal, Ms. Usha Nandini. V, Advs. forthe Appellants.

DThe Judgment of the Court was delivered by DR. D. Y. CHANDRACHUD, J. 1. The appeal is from ajudgment of the High Court of Punjab and Haryana at Chandigarh dated23 February 2011, in a first appeal against a decision of the MotorAccident Claims Tribunal, Chandigarh.

E

2. The appellants are the heirs and legal representatives of AshokKumar who died as a result of an accident on 31 March 1994. He was30 years old at the time of the accident and worked as a commissionagent/salesman with a firm in Ludhiana. The accident took place whilehe was travelling in a bus belonging to the Chandigarh TransportFUndertaking. While he was alighting from the bus, it moved abruptlywhich caused him to fall. The fall resulted in serious injuries and led tohis death on the following day.

3. The heirs of the deceased filed a claim petition under Section166 of the Motor Vehicles Act, 1988 before the tribunal, to seekGcompensation of Rs.20 lakhs. The Tribunal held that negligence on thepart of the bus driver was not proved. However, an amount of Rs.50,000was awarded towards no fault liability together with interest at 12 percent per annum.

4. In appeal, the High Court drew an adverse inference on accountof the non-examination of the bus driver and awarded a total H

NUTAN RANI AND ANR. v. GURMAIL SINGH AND ORS.[DR. D.Y. CHANDRACHUD, J.]

compensation of Rs 3,98,500. However, the rate of interest was reducedto 6 per cent per annum. Aggrieved by the judgment of the High Court,the heirs are in appeal.

A

5. The learned counsel appearing on behalf of the appellants hasassailed the award of compensation by urging that:

B

i. No addition on account of future prospects was made;

ii. The High Court erred in deducting 1/3[rd] of the amount towardspersonal expenditure without considering that the income ofthe deceased was extremely low, at Rs. 3,000 per month. Aperson earning a low income, who has a family to feed, wouldCnot spend 1/3[rd] of his income towards his personal expenditure;and

iii. The rate of interest was reduced from 12% as awarded by theMACT to 6% without adequate reason.

6. We find merit in the submission that the High Court erred innot granting the benefit of future prospects in computing the income ofthe deceased. Having due regard to the judgment delivered by theConstitution Bench of this Court in National Insurance Company Ltd.v Pranay Sethi[1], an addition towards future prospects is warranted.The deduction of one-third towards personal expenses is proper.

D

E

7 The decision of the Constitution Bench in Pranay Sethi (supra),warrants an addition of 40 per cent on account of future prospects,having regard to the age of the deceased. The total compensation payableto the appellants in terms of the judgment in Pranay Sethi is computedbelow:

F

· Income : Rs 3,000/-

· Percentage increase towards future prospects : 40%· 3000 x 40% = Rs 1,200/-· Total income : Rs 4,200/-· One-third deduction : Rs 1,400/-· Income after deduction : Rs 2,800/-· Annual income = Rs 2,800 x 12 = Rs 33,600/- G

· Multiplier applied : 17 (since age of deceased was 30 years)· Loss of dependency : Rs 33,600 x 17 = Rs 5,71,200/- H

1(2017) 16 SCC 680

610SUPREME COURT REPORTS

A· Loss of consortium : Rs 40,000/-

· Loss of estate : Rs 15,000/-

· Funeral expenses : Rs 15,000/-

· Total compensation = Rs 6,41,200/-

B

C

8. Interest is allowed on the aforesaid amount at 9 per cent perannum from the date of the petition until payment.

9. The appeal is allowed in the above terms. There shall be noorder as to costs.

Nidhi Jain

Appeal allowed.

D

E

F

G

H