REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1440 OF 2011 (Arising out of Special Leave Petition(C) No.36770/2009)

Sunil Sharma & Ors.             ...Appellant(s)

                VERSUS

Bachitar Singh & Ors.        ...Respondent(s)

J U D G M E N T

GANGULY, J.

1. Leave granted.

2. On 2.08.2006, around 4.40 PM, one Mrs. Sunita Sharma (aged 41  

years)  was  returning  to  Panchkula  from  Chandigarh  on  her  

scooter,  when  the  offending  vehicle  (a  Tata  407  bearing  

registration no. HR-58-5649) driven by the second respondent  

hit her and ran over her. She was declared dead when taken to  

hospital.

3. Legal heirs of the deceased, her husband and two children,  

filed  a  claim  petition  before  the  Motor  Accident  Claims  

Tribunal  (MACT)  claiming  Rs.40,00,000/-  as  compensation,  

along with interest @ 24% p.a.  

4. MACT  awarded  total  compensation  of  Rs.7,92,000/-.  It

calculated  the  same  by  arriving  at  gross  salary  of  

Rs.14,541/- (based on salary certificate provided by Haryana  

Women  Development  Corporation  Ltd.),  the  employer  of  Mrs.  

Sunita  Sharma.  From  the  same,  Rs.1310/-  was  deducted  on  

various accounts- she was an income tax assessee, was paid  

HRA amounting to Rs.885/-, CCA Rs.200/- and medical allowance  

Rs.250/-. MACT concluded that these sums could not be taken  

into account in the total salary of Sunita. Thus, her total  

carry  home  salary  was  taken  to  be  Rs.10,000/-  (annual  

equivalent being Rs.1,20,000/-). A deduction of 40% was made  

for personal expenses, as she was a working woman and was  

also maintaining a scooter. Thus, dependency was calculated  

at  Rs.72,000/-,  to  which  a  multiplier  of  11  was  applied.  

Hence,  compensation  was  calculated  at  Rs.7,92,000/-  along  

with interest at the rate of 6% p.a.

5. Aggrieved by the award of MACT, the claimants filed an appeal  

before the High Court of Punjab and Haryana for enhancement  

of compensation. The High Court applied the multiplier of 14,  

instead of 11 applied by MACT. The High Court took annual  

dependency same as that calculated by MACT, i.e. Rs.72,000.  

Accordingly, High Court awarded Rs.2,16,000/- over and above  

what was awarded by MACT.  

6. Still  aggrieved,  the  claimants  filed  the  present  appeal  

before this Court. The claimants, appellants in the present

appeal, contended that:

a. MACT should not have deducted HRA, CCA, EPF Group Insurance  

Scheme and computer advance from the income of the deceased  

and these deductions should not have been upheld by the  

High Court.

b. Deduction of 40% for personal expenses, which was upheld by  

the High Court, was not correct.

c. MACT and the High Court did not take into consideration the  

revision in pay scale of the deceased that came into force  

from January 2006 (before her death) while calculating her  

income.

d. High Court did not grant any compensation for loss of love  

and  affection,  consortium  and  expenses  towards  funeral  

rites of the deceased.

7. We have heard the parties and perused the evidence on record,  

along with the judgments of the Tribunal and High Court. We  

now proceed to deal with each point separately.

a. Computation of Income   

8. In  the  case  of  National  Insurance  Co.  Ltd. v.  Indira  

Srivastava  &  Ors. [AIR  2008  SC  845],  S.B.  Sinha  J,  has  

observed that “The term 'income' has different connotations  

for different purposes. A court of law, having regard to the  

change in societal conditions must consider the question not  

only having regard to pay packet the employee carries home at

the  end  of  the  month  but  also  other  perks  which  are  

beneficial to the members of the entire family. Loss caused  

to the family on a death of a near and dear one can hardly be  

compensated on monitory terms.” His Lordship also stated that  

if  some  facilities  were  being  provided  whereby  the  entire  

family stood to benefit, the same must be held to be relevant  

for the purpose of computation of total income on the basis  

of which the amount of compensation payable for the death of  

the  kith  and  kin  of  the  applicants  was  required  to  be  

determined.  This  Court  held  that  superannuation  benefits,  

contributions towards gratuity, insurance of medical policy  

for self and family and education scholarship were beneficial  

to the members of the family. This Court clarified that by  

opining that 'just compensation' must be determined having  

regard to the facts and circumstances of each case. The basis  

for considering the entire pay packet is what the dependents  

have lost in view of death of the deceased. It is in the  

nature  of  compensation  for  future  loss  towards  the  family  

income” and that “the amounts, therefore, which were required  

to be paid to the deceased by his employer by way of perks,  

should be included for computation of his monthly income as  

that would have been added to his monthly income by way of  

contribution to the family as contradistinguished to the ones  

which were for his benefit. We may, however, hasten to add  

that from the said amount of income, the statutory amount of  

tax payable thereupon must be deducted.”

9. In  Raghuvir Singh Matolya & Ors. v.  Hari Singh Malviya &  

Ors.,  [(2009)  15  SCC  363],  this  Court  has  observed  that  

dearness  allowance  and  house  rent  allowance  should  be  

included for computation of income of the deceased.

10. In the present case, Haryana Women Development Corporation  

Ltd. certified that the deceased had drawn her salary for the  

month of July, 2006 as under:

Basic Pay      -Rs.7,100/-

D.P -Rs.3,550/-

D.A. -Rs.2,556/-

HRA -Rs.885/-

CCA -Rs.200/-

Med. Allowance      -Rs.250/-

Gross Total               -Rs.14,541         

Deduction

EPF -Rs.780/-

GIS -Rs.30/-

Computer Advance -Rs.500/-

Total Deduction         -Rs.1.310/-   

Net Payable= Rs.14,541 - Rs.1,310 = Rs.13,231/-

11. Based on the aforementioned judgments, we are of the view  

that deductions made by the Tribunal on account of HRA, CCA  

and  medical  allowance  are  done  on  an  incorrect  basis  and  

should have been taken into consideration in calculation of  

the income of the deceased. Further, deduction towards EPF  

and GIS should also not have been made in calculating the  

income of the deceased.

12. Thus, we calculate the income of the deceased by taking the  

abovementioned  allowances  into  consideration.  However,  the  

computer  advance  should  not  form  a  part  of  the  monthly  

income. The monthly income of the deceased thus amounts to  

Rs.15,351/-. Thus, the annual income of the deceased would  

amount to Rs. 1,84,212/-.

b. Deduction for Personal Expenses

13. The Tribunal deducted 40% from the income of the deceased by  

way of personal expenses and the same was upheld by the High  

Court. We are of the view that both courts erred in doing the  

same in light of the judgment in the case of Sarla Verma  

(Smt.)  and  others v.  Delhi  Transport  Corporation  &  Anr.,  

[(2009) 6 SCC 121], wherein this Court held:  

“we are of the view that where the deceased was  married, the deduction towards personal and living  expenses  of  the  deceased,  should  be  one-third  (1/3rd) where the number of dependent family members  is 2 to 3, one-fourth (1/4th) where the number of  dependent family members is 4 to 6, and one-fifth  (1/5th) where the number of dependent family members  exceed six.”

14. Hence, we hold that as the deceased was married, a deduction  

of  1/3rd should  be  made  to  her  income  by  way  of  personal  

expenses. After such deduction, the income of the deceased  

would thus amount to Rs.1,22,808/-, which we round off to  

Rs.1,22,800/-.

c. Revision in Pay Scale

15. In  Sarla  Verma (supra),  this  Court  laid  down  a  ‘rule  of  

thumb’  with  respect  to  addition  in  income  due  to  future  

prospects. This Court observed that the addition should be  

only 30% if the age of the deceased was 40 to 50 years.

16. In the present case, the deceased was aged 41 years. Thus, we  

allow an addition of 30% by way of future prospects. The  

annual income of the deceased would thus be Rs.1,59,640/-.  

Considering the age of the deceased, a multiplier of 14 is to  

be  applied.  Accordingly,  annual  dependency  comes  to  

Rs.22,34,960/-.

d Compensation for Loss of Love and Affection, Consortium,  Funeral Rites

17. In cases of fatal motor accidents, some amount must always be  

awarded by way of compensation for loss of love and affection  

and consortium. It is of course impossible to compensate for  

the loss of a life, in the present case, that of a wife and  

mother, in terms of money. However, we can make an attempt to  

do so. Accordingly we award Rs.25,000/- for loss of love and  

affection and consortium.

18. Thus, total compensation payable to the claimants-appellants  

is Rs.22,59,960/- which is rounded off to Rs.22,60,000/- with

interest at the rate of 6% from the date of filing the claim  

petition.

19. Accordingly the appeal of the claimants-appellants is allowed  

to the extent indicated above.  

20. The respondents are jointly and severally liable to make the  

aforesaid payment, after adjusting payment, if any, is made.  

Such payment is to be made within three months. No costs.  

          .......................J.            (G.S. SINGHVI)

          .......................J. New Delhi                 (ASOK KUMAR GANGULY) February 07, 2011