2014 (4) TMI 1145 - SC - Indian Laws

Motor Accident Claims - compensation claimed on the ground that the sole breadwinner of their family, who was 46 years old, had died in a road accident - Held that - It is evident from the order of the Tribunal as well as Salary Certificate filed as (Annexure P-2) the deceased was getting a gross salary of ₹ 14,103.77 ps. p.m. apart from benefits like GPF, D.A., and other allowances. It is also stated therein that the deceased was having another 12 years of service and there is a chance of revision of pay scales and getting one more promotion. Taking all these into consideration, the Tribunal arrived at a conclusion that the salary of the deceased would be ₹ 35,000/- p.m. at the time of his retirement and ₹ 25,000/- p.m. as his potential earning capacity on the date of his death. After deducting ₹ 10,000/- towards personal expenses, his liability towards taxation etc., the net contribution of the deceased towards his dependents was arrived at ₹ 15,000/- p.m., applied the multiplier 12 taking into consideration the age of the deceased and finally awarded an amount of ₹ 22,10,000/- as total compensation payable with interest @ 9% p.a. The High Court without properly appreciating the factum of the young age of the deceased and without taking future prospects of the deceased into consideration has reduced the compensation from ₹ 22,10,000/- to ₹ 13,90,000/- and the rate of interest from 9% p.a. to 7.5% p.a. Even though we are not convinced with the calculation and reasoning given by the Tribunal, but keeping in view the peculiar facts and circumstances of the case, where the deceased died at an early age of 46 years, had 12 more years of service, would have got promotions, resulting in hike in his pay and emoluments, we feel that ends of justice would be met if the potential earning capacity of the deceased is fixed at ₹ 30,000/- p.m. Accordingly, we fix the potential earning capacity of the deceased per month at ₹ 30,000/- instead of ₹ 25,000/- as fixed by the Tribunal. After deducting 1/3rd portion from ₹ 30,000/- towards personal expenses, the dependency benefit for the appellants would come to ₹ 20,000/- and the multiplier applicable is 12 taking into consideration the age of the deceased. Accordingly, the loss of dependency is fixed at ₹ 20,000 x 12 x 12 ₹ 28,80,000/-. In addition to that, the appellants are entitled to ₹ 50,000/- as conventional amount as granted by the Tribunal. Thus, the appellants would be entitled to a total compensation of ₹ 29,30,000/- with interest @ 7.5% p.a.

Summary

Issues involved:
Calculation of compensation amount by the Motor Accident Claims Tribunal, Ahmedabad; Determination of net salary and compensation by the High Court; Appeal for enhancement of compensation amount; Consideration of deceased's earning capacity and future prospects; Review of Tribunal and High Court decisions by the Supreme Court.

Motor Accident Claims Tribunal's Calculation:
The Motor Accident Claims Tribunal, Ahmedabad, based on oral and documentary evidence, calculated the compensation amount at Rs. 22,10,000 considering the deceased's income at Rs. 15,000 per month, applying a multiplier of 12, and adding a conventional amount of Rs. 50,000. The Tribunal also granted interest at 9% per annum.

High Court's Determination:
The High Court, in response to appeals, reduced the compensation to Rs. 13,90,000, determining the deceased's net salary at Rs. 14,000 per month with a multiplier of 8 for loss of dependency. Additional amounts were awarded for loss of estate, loss of consortium, and funeral expenses, with interest at 7.5% per annum.

Appeal for Enhancement:
The claimants-appellants filed appeals seeking enhancement of compensation, arguing that the deceased's earning capacity was Rs. 35,000 per month, which the High Court had unjustly reduced to Rs. 14,000. They contended that the High Court overlooked the deceased's future prospects and remaining service years.

Supreme Court's Decision:
The Supreme Court reviewed the evidence and determined that the deceased's potential earning capacity was Rs. 30,000 per month, considering future promotions and pay hikes. After deductions, the dependency benefit was fixed at Rs. 20,000 per month with a multiplier of 12, resulting in a total compensation of Rs. 29,30,000 along with a conventional amount of Rs. 50,000. The Supreme Court allowed the appeals, setting aside the lower court's orders with no costs imposed.