The Supreme Court has recently modified a High Court judgment and enhanced the compensation granted to the family of deceased in a motor accident claim as per norms laid down in one of its key judgments.
The Court upheld that Multiplier which is relevant to the Deceased shall be applied in calculating compensation and not that of his family members.
The Bench comprising of Justice K. M. Joseph and Justice P. S. Narasimha corrected the compensation amount in accordance with principles enunciated in Constitutional-Bench Judgement of National Insurance Company Limited v. Pranay Sethi and Others 2017 Latest Caselaw 767 SC) and drew nuances on provisions of 'fixed salary' and 'permanent job'.
Brief Facts of Case
The appellants assailed the impugned judgment of the High Court by which the compensation awarded by Motor Accidents Claims Tribunal had been reduced from ₹30,81,577/- to ₹8,20,000/-
MACT while awarding the compensation considered the fact that the deceased was employed in a job in Saudi Arabia where he was earning 3,500 Riyals. It further took the multiplier at 16.
The High Court while quashing the order, reasoned that the income of the deceased couldn't be calculated on basis of the monthly salary of 3,500 Riyals projected by the appellants and instead substituted the income of the deceased with the sum of ₹15,000/- per month.
Secondly, the High Court decided the multiplier on the basis of average age of the deceased's parents and accordingly reduced it from 16 to 7.
Appellant's Submission
It was asserted by the Counsel of the Appellants that the High Court erred in interfering with the Award passed by MACT. He objected to the modified income of ₹15,000/- per month and further pointed that the multiplier should be that of the deceased which was correctly fixed at 16 by the MACT.
It was further contended that the High Court had also erred in not granting future prospects which are to be given in terms of (National Insurance Company Limited v. Pranay Sethi and Others 2017 Latest Caselaw 767 SC).
Respondent's Submission
Contrary to the above, the Counsel for the Respondent pointed out that the High Court was in fact justified on the material placed before it, in reducing the monthly income. He stated that the deceased was not having any 'permanent job'. He was working abroad on a visa which was about to expire. The appellants have also produced certain additional documents containing appointment letter issued in favour of the deceased, wherein it was shown that, the appellant would be entitled to a Basic Salary of 1,000 Riyals.
Supreme Court's Observations
The Bench upon hearing both the parties and examining the documents produced observed that the accident took place on 28.07.2012 and the appointment order dated 22.10.2011 was in close proximity to the date of the accident. It said that a Basic Salary of 1,000 Riyals and no allowances were decided. The Court noted in regard to the certificate dated 27.08.2012 submitted by the appellants that no doubt the last salary was declared to be 3,500 Saudi Riyals, however, the other contents claimed that the Certificate borne no legal obligation to the company and was issued based on the family request of the deceased to be submitted to the Indian authorities.
It thus denied the validation of the Certificate and placed reliance on the Appointment Order. The Basic Salary was thus settled to be 1,000 Riyals (₹15,000/- month upon conversion to Indian Currency)
The Top Court noted that the deceased was aged 33 years. He was a graduate and was also qualified in a course in a computer while applying the principle enunciated in National Insurance Company Limited v. Pranay Sethi and Others 2017 Latest Caselaw 767 SC).
The Ld. Counsel of the Respondent stressed on the para of the judgment that held that the deceased must have a 'permanent job' to get an increase of 50%.
“59.3. While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased had a permanent job and was below the age of 40 years, should be made. The addition should be 30%, if the age of the deceased was between 40 to 50 years. In case the deceased was between the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary less tax.”
However, the Ld. Counsel of the Appellant pointed out the next paragraph and submitted that the Court may proceed on the basis of this being a case where the deceased was earning a fixed salary.
“59.4 In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component.”
The Bench accepted the latter's argument and admitted the deceased should be granted an increase by 40% in regard to his admitted age being below 40 years on the basis of the salary which was arrived upon based on the order of the appointment.
The Court struck down the multiplier applied by the High Court as per the age of the deceased's parents and held:
"There is hardly any dispute that it is the multiplier which is relevant to the deceased, which shall apply."
The Top Court additionally applied the principles laid down in other SC Judgements (Sunita Tokas and Anr. v. New India Insurance Co. Ltd. 2019 Latest Caselaw 732 SC) and New India Assurance Company Limited v. Somwati and Others 2020 Latest Caselaw 497 SC and arrived to the conclusion that the appellants were entitled to 'partly succeed'.
Therefore, allowing the plea partly, the Bench re-calculated the Compensation Amount to be ₹20 lakhs as per the below observation:
Read Order Here:
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