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        REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3461 of 2003       

KALPANARAJ & ORS.                            ………APPELLANTS VS.

TAMIL NADU STATE TRANSPORT CORPN.             ……RESPONDENT

J U D G M E N T

V.GOPALA GOWDA, J.

This appeal is filed by the appellants questioning  

the correctness of the judgment and final Order dated  

30.01.2002 passed by the High Court of Judicature at  

Madras in Civil Misc. Appeal No. 1487 of 1999, urging  

various facts and legal contentions in justification of  

their claim.

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2. Necessary relevant facts are stated hereunder to  

appreciate the case of the appellants and also to find  

out whether the appellants are entitled for the relief  

as prayed in this appeal.

3. The deceased, while going on his motorcycle from  

Vellore to Kannamangalam, collided with the bus of the  

respondent-Corporation  as  a  result  of  which  he  

sustained  fatal  injuries  and  died  on  the  spot.  The  

legal representatives of the deceased viz, his wife and  

two  minor  children  filed  M.C.O.P.  No.  539  of  1994  

contending that the accident occurred solely because of  

the  rash  and  negligent  driving  of  the  bus  of  the  

respondent-Corporation. If the driver of the bus had  

driven the bus with carefulness, there might have been  

no possibility of dragging the deceased along with the  

motorcycle for a distant of 120 feet. The appellants-  

claimants claimed an amount of  20 lakhs compensation  

for the death caused by the respondent.  

The Tribunal, after considering the material evidence  

on record of P.W.1 and P.W. 2 and R.W.1 and the ten  

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exhibits filed on behalf of the appellant- claimants,  

found that the accident has occurred only due to rash  

and negligent driving of the driver of the bus of the  

respondent-Corporation.  Therefore,  the  learned  judge,  

holding the monthly income at 15,000/- and adopting the  

multiplier of 18, determined a sum of  32,40,000/- as  

compensation.  However,  he  restricted  the  sum  of  

compensation to 20,90,000/-, since that was the amount  

claimed  by  the  appellants-claimants.  The  Tribunal  

further awarded interest @12% per annum on the said  

amount.

4. Aggrieved  by  the  Award  of  the  Tribunal,  the  

respondent-Corporation filed an appeal challenging the  

Order of the Tribunal. The High Court, however, only  

restricted  itself  to  ascertain  as  to  whether  the  

compensation awarded by the Tribunal was excessive. And  

if so, then what is the amount to which the appellants-  

claimants are entitled to.  

5. The High Court opined that the Tribunal erred in  

relying upon the statement of evidence of the wife of  

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the deceased to determine the monthly income of the  

deceased at 15,000/- instead of relying upon the income  

shown in the Income Tax return. Further, the High Court  

opined that the Tribunal erred in not deducting 1/3rd  

for  personal  expenses  of  the  deceased.  Further,  

according  to  the  High  Court,  the  Tribunal  erred  in  

determining  the  multiplier  of  18  instead  of  13  

considering the age of the deceased which was 46 at the  

time of the accident.  

6. Accordingly,  the  High  Court  held  that  the  

unsubstantiated oral evidence alone of P.W.1 cannot be  

taken into consideration in the light of Exhs. A.8, A.9  

and  A.10.  The  monthly  income  of  the  deceased  is  

therefore taken as 3,115/- per month for computation of  

the multiplicand on the basis of net average income of  

the deceased calculated as per the income tax return  

produced  as  evidence  on  record.  Therefore,  the  

compensation  determined  under  the  head  of  loss  of  

income  under  the  head  of  ‘loss  of  income’  of  the  

deceased  was  determined  by  the  High  Court  at  

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4,86,000/-.  Further,  the  High  Court  has  reduced  

compensation under the head of funeral expenses from  

25,000/-  to  10,000/-.  The  Tribunal  awarded  a  

consolidated amount for loss of love and affection by  

the children, loss of income and loss of consortium by  

the wife at  19,55,000/-. The High Court reduced the  

compensation  under  the  head  of  ‘loss  of  love  and  

affection’  by  the  minor  children  at  20,000/-  each.  

Also, the amount awarded towards loss of consortium to  

the wife was reduced by the High Court to  30,000/-.  

Therefore, in total, the High Court awarded a total  

amount of 5,76,000/- as compensation to the appellants-

claimants. The interest rate was also reduced to 9% per  

annum  by  the  High  Court  from  12%  awarded  by  the  

Tribunal.

7. It is pertinent to note that the only available  

documentary evidence on record of the monthly income of  

the deceased is the income tax return filed by him with  

the Income Tax Department. The High Court was correct  

therefore, to determine the monthly income on the basis  

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of the income tax return. However, the High Court erred  

in ascertaining the net income of the deceased as the  

amount to be taken into consideration for calculating  

compensation, in the light of the principle laid down  

by this Court in the case of National Insurance Company  

Ltd.  v. Indira  Srivastava  and  Ors.1 The  relevant  

paragraphs of the case read as under:

“14. The question came for consideration  before  a  learned  Single  Judge  of  the  Madras High Court in  National Insurance  Co. Ltd. v. Padmavathy and Ors. wherein  it was held:

‘7…..Income  tax,  Professional  tax which are deducted from the  salaried  person  goes  to  the  coffers of the government under  specific  head  and  there  is  no  return.  Whereas,  the  General  Provident  Fund,  Special  Provident  Fund,  L.I.C.,  Contribution  are  amounts  paid  specific  heads  and  the  contribution is always repayable  to an employee at the time of  voluntary  retirement,  death  or  for  any  other  reason.  Such  contribution  made  by  the  salaried  person  are  deferred  payments and they are savings.  The  Supreme  Court  as  well  as  

1 (2008) 2 SCC 763

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various  High  Courts  have  held  that  the  compensation  payable  under the Motor Vehicles Act is  statutory and that the deferred  payments  made  to  the  employee  are  contractual.  Courts  have  held  that  there  cannot  be  any  deductions  in  the  statutory  compensation,  if  the  Legal  Representatives are entitled to  lump  sum  payment  under  the  contractual  liability.  If  the  contributions  made  by  the  employee  which  are  otherwise  savings  from  the  salary  are  deducted from the gross income  and only the net income is taken  for  computing  the  dependency  compensation,  then  the  Legal  Representatives  of  the  victim  would lose considerable portion  of the income. In view of the  settled proposition of law, I am  of  the  view,  the  Tribunal  can  make  only  statutory  deductions  such  as  Income  tax  and  professional tax and any other  contribution,  which  is  not  repayable by the employer, from  the  salary  of  the  deceased  person  while  determining  the  monthly income for computing the  dependency  compensation.  Any  contribution  made  by  the  employee during his life time,  form part of the salary and they  should  be  included  in  the  monthly income, while computing  the dependency compensation.’

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15.  Similar  view  was  expressed  by  a  learned Single Judge of Andhra Pradesh  High  Court  in S.  Narayanamma  and  Ors. v. Secretary  to  Government  of  India,  Ministry  of  Telecommunications  and Ors.  holding:

13….In  this  background,  now  we  will  examine  the  present  deductions made by the tribunal  from the salary of the deceased  in  fixing  the  monthly  contribution of the deceased to  his family. The tribunal has not  even  taken  proper  care  while  deducting  the  amounts  from  the  salary of the deceased, at least  the  very  nature  of  deductions  from the salary of the deceased.  My  view  is  that  the  deductions  made  by  the  tribunal  from  the  salary  such  as  recovery  of  housing  loan,  vehicle  loan,  festival  advance  and  other  deductions,  if  any,  to  the  benefit  of  the  estate  of  the  deceased cannot be deducted while  computing  the  net  monthly  earnings of the deceased. These  advances or loans are part of his  salary.  So  far  as  House  Rent  Allowance  is  concerned,  it  is  beneficial to the entire family  of  the  deceased  during  his  tenure,  but  for  his  untimely  death the claimants are deprived  of such benefit which they would  have enjoyed if the deceased is  alive.  On  the  other  hand,  allowances,  like  Travelling  

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Allowance,  allowance  for  newspapers/periodicals,  telephone, servant, club-fee, car  maintenance  etc.,  by  virtue  of  his vocation need not be included  in the salary while computing the  net earnings of the deceased. The  finding of the tribunal that the  deceased  was  getting  Rs.1,401/-  as  net  income  every  month  is  unsustainable  as  the  deductions  made  towards  vehicle  loan  and  other deductions were also taken  into  consideration  while  fixing  the  monthly  income  of  the  deceased.  The  above  finding  of  the tribunal is contrary to the  principle of 'just compensation'  enunciated by the Supreme Court  in the judgment in Helen's case  (1 supra). The Supreme Court in  Concord of India Insurance Co. v.  Nirmaladevi and Ors.     1980 ACJ 55    (SC)     held  that  determination  of    quantum must be liberal and not  niggardly since law values life  and limb in a free country 'in  generous scales'.”

(Emphasis laid down by this Court)

8. In the light of the principle of law laid down by  

this  Court  in  the  Indira  Srivastava case  mentioned  

supra, we are of the opinion that the High Court erred  

in making deductions under various heads to arrive at  

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the net income instead of ascertaining the gross income  

of the deceased out of the annual income earned from  

his  occupation  mentioned  in  the  income  tax  return  

submitted for the relevant financial year 1994-1995.

 9. As per the Income Tax return of the financial year  

1994-1995 produced on record, the deceased was earning  

88,660/- per annum or  7330/- per month. Further, the  

deceased being 46 years of age at the time of death, he  

is entitled to 30% increase in the future prospects of  

income as per the legal principle laid down by this  

Court  in  Santosh  Devi  v. National  Insurance  Company  

Ltd. and Ors.2

10. Also, since the deceased was 46 years of age at the  

time  of  the  accident,  a  multiplier  of  13  seems  

appropriate for determining the quantum of compensation  

as per the principle laid down by this Court in the  

case  of  Sarla  Verma  and  Ors.  v. Delhi  Transport  

Corporation and Anr.3

2 (2012) 6 SCC 421 3 (2009) 6 SCC 121

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11.  Therefore,  the  total  amount  of  compensation  the  

appellants- claimants are entitled to under the head of  

loss of income is:  

[( 7330+30/100 x  7330) x 12 x 13] = 14,86,524/-.]

12. Further,  since  the  deceased  has  left  behind  his  

wife and two children, the amount to be deducted under  

the  head of  personal expenses  is 1/3rd of  the total  

income in the light of the principle laid down in Sarla  

Verma case (supra) which was reiterated in Santosh Devi  

case (supra). Therefore, the amount to be awarded as  

compensation to the appellant is = ( 14,86,524/- - 1/3 x  

14,86,524/-) = 9,91,016/-.

13. The  appellant-claimants  sought  an  amount  of  

10,000/- towards damage to the motorcycle. Since, the  

claim has neither been rebutted with evidence by the  

respondent, we grant compensation of  10,000/- towards  

the damage caused to the bike.

14. Further,  the  High  Court  awarded  a  sum  of  

30,000/- towards loss of consortium and  20,000/- each  

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towards  loss  of  love  and  affection  by  the  minor  

children. This amount awarded by the High Court is on  

the lower side in the light of the principle laid down  

in Rajesh and Ors. v. Rajbir Singh and Ors.4 wherein the  

Court  awarded  1,00,000/-  towards  loss  of  consortium  

and 1,00,000/- towards loss of care and guidance to the  

minor children. Accordingly, we award a compensation of  

1,00,000/- each towards loss of consortium and towards  

loss of love and affection.  

15. Apart from this, we award  1,00,000/- towards loss  

of estate and 1,00,000/- towards loss of expectation of  

the  life  of  the  deceased.  We  also  award  a  sum  of  

50,000/- for funeral expenses and cost of litigation.  

Therefore, a total sum of  14,51,016/- which is rounded  

off  at  14,51,000/-  is  awarded  to  the  appellants-

claimants.  

16. Further,  the  High  Court  has  awarded  the  

compensation  with  interest  @9%  per  annum.  We  concur  

with this holding of the High Court in the light of the  

4 (2013) 9 SCC 54

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decision  of  this  Court  in  Municipal  Corporation  of  

Delhi, Delhi v. Uphaar Tragedy Victims Association &  Ors.5 Accordingly, we award an interest @ 9% per annum  

on the compensation to be awarded to the appellants-  

claimants.  The  compensation  awarded  shall  be  

apportioned  between  the  appellants  equally  with  

proportionate interest. We direct the Insurance Company  

to deposit 50% of the awarded amount with proportionate  

interest in any of the Nationalized Bank of the choice  

of the appellants for a period of 3 years. The rest of  

50% amount awarded with proportionate interest shall be  

paid to the appellants by way of a demand draft within  

six weeks from the date of receipt of a copy of this  

order  after  deducting  the  amount  if  already  paid.  

During  the  said  period,  if  they  want  to  withdraw  a  

portion or entire deposited amount for their personal  

or any other expenses, including development of their  

asset, then they are at liberty to file application  

before  the  Tribunal   for  release  of  the  deposited  

amount,  which  may  be  considered  by  it  and  pass  5 (2011) 14 SCC 481

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appropriate  order  in  this  regard.  We  set  aside  the  

impugned  judgment  and  order  of  the  High  Court  and  

modify the judgment in the aforesaid terms by allowing  

this  appeal.  In  the  facts  and  circumstances  of  the  

case, no order as to costs.      

 ………………………………………………………………………J.               [GYAN SUDHA MISRA]                                                        

                     ………………………………………………………………………J.                [V. GOPALA GOWDA]  New Delhi, April 22, 2014  

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