2007 (12) TMI 538 - SC - Indian Laws

Summary

Issues Involved:
1. Connotation of the term 'income' for determining 'just compensation' u/s 168 of the Motor Vehicles Act, 1988.
2. Inclusion of various allowances and perks in the computation of income for compensation.
3. Deduction of statutory taxes and non-repayable contributions from the income.

Summary:

Issue 1: Connotation of the term 'income' for determining 'just compensation' u/s 168 of the Motor Vehicles Act, 1988.

The Supreme Court examined the connotation of 'income' for determining 'just compensation' u/s 168 of the Motor Vehicles Act, 1988. The appeal arose from a judgment by the High Court of Judicature at Allahabad, which had partly allowed the compensation claim. The High Court held that the claimants were entitled to compensation calculated at Rs. 19,53,224/- along with interest @ 9% from the date of presentation of the claim petition till its realization, excluding travelling reimbursement from the computation of net income.

Issue 2: Inclusion of various allowances and perks in the computation of income for compensation.

The appellant contended that only the basic pay should be considered for compensation, excluding other allowances. However, the Supreme Court emphasized that 'income' should include all perks beneficial to the family, such as contributions towards Provident Fund, Life Insurance, gratuity, etc. The Court noted that 'just compensation' should be assigned a broad meaning, considering societal changes and the benefits provided by private sector companies.

Issue 3: Deduction of statutory taxes and non-repayable contributions from the income.

The Court held that while computing the monthly income for compensation, statutory deductions like income tax must be deducted. However, contributions that are repayable to the employee or beneficial to the family should be included. The Court referred to precedents where it was held that only statutory deductions should be made, and contributions like Provident Fund, LIC, etc., should be included in the monthly income for computing dependency compensation.

Conclusion:

The Supreme Court allowed the appeal in part, directing that medical reimbursement and tax elements on the entire sum should be deducted. However, the Court declined to interfere with the High Court's judgment due to the time elapsed since the accident and the failure to consider potential income rises. The appeal was dismissed with no order as to costs.