07 May 2121

40% addition to income as prospects of deceased who are self-employed - Supreme Court of India

Case : Rahul Sharma & Anr. v. National Insurance Company Ltd. & Ors. Civil Appeal No. 1769 of 2021 (Arising out of SLP(C) No. 719 of 2018)

Court : Supreme Court of India

Bench : Chief Justice of India N.V. Ramana, Justice Surya Kant and Justice Aniruddha Bose

Decided on : 07 May 2121

Relevant Statutes

Sections 249, 304­A and 427 of the Indian Penal Code, 1860

Sections 166 and 140 of the Motor Vehicles Act, 1988

Brief Facts & Procedural History

1. The car in which the Appellants' parents were travelling collided with a truck in Phagwara, Punjab. As a result, they died as a result of their injuries received in the collision. The automobile was transporting other Appellants' and deceased's relatives. Following that, F.I.R. was filed at Punjab's PS Sadar Phagwara under Sections 249, 304A, and 427 of the Indian Penal Code, 1860. It's worth noting that the car was insured by Respondent No. 1 during the relevant period. 

2. Appellants filed a claim petition with the Motor Accidents Claims Tribunal under Sections 166 and 140 of the Motor Vehicles Act 1988, seeking compensation for the deaths of their parents. The cases were registered and were adjudicated by a single award. While adjudicating the claim, the Tribunal ruled that the compensation should be Rs. 41,55,235. The National Insurance Co. Ltd., as the vehicle's insurer, was found responsible to pay Rs. 41,55,235 in compensation, plus interest at the rate of 9% per year from the date of the claim petition's submission.

3. The National Insurance Co. Ltd. Appeals in the Delhi High Court and it is held the pecuniary compensation was assessed at Rs.19,16,000, and the non­pecuniary losses were calculated at Rs.2,50,000, for a total amount of Rs.21,66,000 by the High Court in its joint judgment. The High Court deducted 50 per cent of income for personal and living expenditures when it issued the aforementioned challenged judgment. The dead, however, was found ineligible for future possibilities by the High Court since she was self-employed.

4. The appellants appeal in the Hon’ble Supreme Court of India challenging the Delhi High Court judgment. 

The Issue of the Case

Whether the impugned judgment dated 4th September 2017 passed by Delhi High Court valid?

The Observations of the Court/Commission

1. Referring to the case National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, According to the ruling, if the dead were self-employed and under the age of 40, their income would be increased by 40% as prospects. In this example, the deceased was self-employed and 37 years old, necessitating a 40 per cent increase in future possibilities. 

2. Referring to the case Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121, the court decided that a person like the deceased, who was married with two children, may deduct one-third (1/3rd) of their personal and living costs. This Court should intervene since the High Court deducted 50% in the challenged ruling.

The Decision Held by the Court

1. Honourable Supreme Court of India held the total compensation to be Rs. 38,24,890, payable with 9% annual interest from the date of filing the claim until realization, set off against any portion compensation previously received, if any. 

2. The Civil Appeal is dismissed in the above-mentioned terms.

Click here to view/download the judgement >