On 6th December 2022, the Supreme Court in a Division Bench comprising of Justice Krishna Murari and Justice Bela M. Trivedi observed that section 168 of the MV Act deals with the concept of ‘just compensation’ which ought to be determined on the foundation of fairness, reasonableness and equitability. Although such determination can never be arithmetically exact or perfect, an endeavor should be made by the Court to award just and fair compensation irrespective of the amount claimed by the applicant/s. (Smt. Anjali & Ors. Vs. Lokendra Rathod & Ors.)
Facts of the Case:
The Appellants are the heirs and legal representatives of Rajesh (deceased) who died as a result of a motor accident on 15th August 2010. He was traveling in a Maruti Alto Car, on reaching Badwah Road, a bus being driven by Respondent No.2 in a rash and negligent manner crashed into the Rajesh’s car, resulting in Rajesh receiving grievous injuries on various body parts, he later succumbed to the injuries during treatment. He is survived by his two wives, three children and his parents, who are the appellants before this Court.
The claimants filed a Claim Petition u/s 166 of the Motor Vehicles Act, 1988 before the Tribunal, seeking compensation in the amount of Rs.20 Lakhs. By its award dated 12th July, 2013, the Tribunal estimated the deceased’s income at Rs.4000/- per month and allowed the claim in the amount of Rs.6,24,000/- together with interest at the rate of 6% per annum from the date of filing the Claim Petition till the date of full realization of the decreed amount.
The appellants filed a First Appeal before the High Court of Madhya Pradesh, Indore Bench, wherein vide impugned judgment dated 16th August, 2018 the High Court increased the deceased’s estimated income to Rs. 5000/- per month and awarded a compensation of Rs. 11,41,000/- with interest at the rate of 6% per annum. Aggrieved by the judgment of the HC, the claimants are in appeal before this Court.
Contentions of the Appellants:
The counsel for the appellants submitted that “the HC and the Tribunal failed to consider the deceased’s Income Tax Return filed on 28.05.2010 for the year 2009-2010, the HC rejected the ITR on the ground that earlier returns were not filed while the Income Tax Inspector was examined. The also failed to observe that since the number of dependents exceeded 6 members, the deduction made towards personal expenses ought to be one-fifth (1/5th). In the present case there are 7 dependents of the deceased.
The Tribunal failed to award any amount under the Conventional Heads and the High Court awarded a sum of Rs.70,000/- in lumpsum under the Conventional Heads, whereas the same ought to have been Rs.1,20,000/- as per the Supreme Court’s judgment in Malarvizhi & Ors. Vs. United India Insurance CO. Ltd. & Ors. They both awarded interest at the rate of 6% per annum from the date of application while it ought to have been 9% as held in Malarvizhi & Ors. Vs. United India Insurance Co. Ltd. & Ors.”
Observations and Judgment of the Court:
The hon’ble court observed that “The Tribunal and the High Court both committed grave error while estimating the deceased’s income by disregarding the Income Tax Return of the Deceased. Income Tax Return is a statutory document on which reliance be placed, where available, for computation of annual income. The provisions of the Motor Vehicles Act, 1988 gives paramount importance to the concept of ‘just and fair’ compensation. It is a beneficial legislation which has been framed with the object of providing relief to the victims or their families.
The deceased is survived by seven (7) dependents, hence in view of the Sarla Verma (Supra) judgment and the Constitution bench judgment of this Court in Pranay Sethi (Supra) the appropriate deduction for personal expenses for deceased ought to be 1/5th only and not 1/4th as applied by the Tribunal and High Court.
While calculating the compensation, the courts should take into consideration not only the actual income at the time of the death but should also make additions by taking note of future prospects. We e are of the opinion that the High Court ought to have added the increment of 10% to the conventional heads as per the dictum in Pranay Sethi.”
The appeal was allowed. The total compensation of Rs. 25,91,388/- with interest at 9% per annum from the date of filing of the application till the date of payment to the Appellants.
Case: Smt. Anjali & Ors. Vs. Lokendra Rathod & Ors.
Citation: Civil Appeal No. 009014 Of 2022
Bench: Justice Krishna Murari and Justice Bela M. Trivedi
Date: December 06, 2022.
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