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IN THE SUPREME COURT OF INDIA  CIVIL APPELLATE JURISDICTION  

 CIVIL APPEAL NO   000767    OF 2018   

(Arising out of SLP (C) No.23086 of 2016)    

RELIANCE GENERAL INSURANCE COMPANY LTD   ..Appellant   

VERSUS  

SHALU SHARMA AND ORS         ..Respondents   

J U D G M E N T  

Dr D Y CHANDRACHUD, J  

1 The present appeal arises from the judgment of a Single Judge of the  

Delhi High Court in an appeal against an award of the Motor Accident Claims  

Tribunal (MACT).   

2 Narinder Sharma died in an accident which occurred on 14 September  

2013. The accident involved a motor vehicle which was insured against third  

party risks by the appellant.  The dependents filed a claim for compensation  

before the MACT.  The Tribunal held that the accident was caused due to the  

negligence of the driver of the offending vehicle. Compensation of Rs 30,26,810  

REPORTABLE

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was awarded together with interest at 9 per cent per annum.  The Tribunal  

factored in a component of 30 per cent towards the loss of future prospects in  

assessing the compensation.    

3 The High Court has observed that the only issue which was raised by the  

insurer was in regard to the award of future prospects to the extent of 30 per  

cent.  The deceased was conducting his own business in the name and style of  

M/s Mahak Cable Networks at East Punjabi Bagh, New Delhi.  He was 42 years  

old on the date of the accident. According to the appellant, the increase in his  

gross total income as shown in the income tax returns for 2010-11, 2011-12  

and 2012-13 would not justify the award of future prospects, or at least to that  

extent. The High Court negatived the submission of the insurer and held that  

having due regard to the progressive increase in the income of the deceased,  

the award of future prospects by the Tribunal could not be faulted.  

4 The judgment of a Constitution Bench of this Court in National  

Insurance Company Limited v Pranay Sethi1 settles the issue. The deceased  

was self-employed.  In such a case, future prospects cannot be denied. The  

grant must be in accordance with the following principle set down in the  

judgment:  

“(iv) 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  

                                                           1 (2017) 13 SCALE 12

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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.”     

Since the deceased was 42 years of age, an addition of 25% on the ground of  

future prospects would be warranted instead of 30% computed by the Tribunal.  

5 The Tribunal has held that the annual income of the deceased (on the  

basis of the income tax returns for 2010-11, 2011-12 and 2012-13) would be  

Rs 1,81,500.  Adding a component of 25% for future prospects, the income  

would stand at Rs 2,26,875.  Deducting an amount of one fourth towards  

personal expenses, the loss of dependency per annum works out to Rs  

1,70,156.  Applying a multiplier of 14, the total loss of dependency would work  

out to Rs 23,82,187.  The Tribunal has awarded a sum of Rs 3,14,335 towards  

medical expenses.  An addition of Rs 70,000 would be required to be made in  

terms of the decision in Pranay Sethi (supra) on account of the conventional  

heads of loss of estate (Rs 15,000), loss of consortium (Rs 40,000) and funeral  

expenses (Rs 15,000).  Hence, the total compensation is quantified at                 

Rs 27,66,522 on which the claimants would be entitled to interest @ 9% p.a.  

from the date of the filing of the claim petition.  The apportionment shall be  

carried out in terms of the award of the Tribunal. We order accordingly.  

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6 When the Special Leave Petition was entertained by this Court, the  

following order was passed on 12 August 2016:   

“Issue notice.  

Since the objection in this special leave petition is mainly to  

enhancement of the income of the deceased by 30% as prospective  

earning capacity, the petitioner shall deposit 75% of the awarded  

amount along with interest accrued thereupon before the Tribunal,  

within six weeks.  

If such deposit is made within the stipulated time, execution  

proceedings against the petitioner shall remain stayed.  

The amount so deposited, shall be released to the respondent  

forthwith.”  

   The appellant shall deposit the balance computed in terms of the present  

judgment within a period of eight weeks before the Tribunal which shall be  

disbursed to the claimants upon due verification.  If the amount withdrawn by the  

claimants in terms of the order of this Court dated 12 August 2016 exceeds the  

amount to which they are entitled under the present judgment, no recoveries shall  

be made. The appeal is accordingly disposed of.  There shall be no order as to  

costs.  

 ...........................................CJI  

               [DIPAK MISRA]    

                                                    ...........................................J                  [A M KHANWILKAR]    

                                                    ...........................................J                  [Dr D Y CHANDRACHUD]    New Delhi;  February 02, 2018