The Supreme Court on Tuesday (6th Dec 2022) ruled that, while calculating annual income for grant of motor accident compensation, the courts can consider the Income Tax Return of the deceased.
The bench of Justices Krishna Murari and Bela M. Trivedi was dealing with the appeal challenging the judgment passed by the Madhya Pradesh High Court.
In this case, The Appellants are the heirs and legal representatives of Rajesh (deceased) who died as a result of a motor accident.
He was travelling a Car being driven by Respondent No.2 in a rash and negligent manner crashed into Rajesh’s car, resulting in Rajesh (deceased) 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 the Court.
The claimants/appellants filed a Claim Petition under Section 166 of the Motor Vehicles Act, 1988 before the Tribunal, seeking compensation in the amount of Rs.20 Lakhs.
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 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 from the date of filing the Claim Petition till the date of full realization of the decreed amount.
The issue for consideration before the bench was:
Whether the order passed by the Madhya Pradesh HC needs interference or not?
The bench 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.
Supreme Court relied upon the case of Sarla Verma & Ors. v. Delhi Transport Corporation & Anr. where it was stated that 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. It was further held that though the evidence may indicate a different percentage of increase, it is necessary to standardize the addition to avoid disparate yardsticks being applied or disparate methods of calculation being adopted.
The bench stated that the total compensation payable to the Appellants is Rs.25,91,388/- with interest at 9% per annum from the date of filing of the application till the date of payment of the compensation to the Appellants.
In view of the above, the Supreme Court allowed the appeal.
- Case Title: Smt. Anjali & Ors. v. Lokendra Rathod & Ors.
- Bench: Justices Krishna Murari and Bela M. Trivedi
- Case No.: CIVIL APPEAL NO. 009014 OF 2022