High Court of Bombay

Mulchand Dhanji Shah and Ors. Vs. Noordam Iraj Ahmed and Ors.

MANU/MH/0054/2022

10.01.2022

Motor Vehicles

Failure of the claimants to produce evidence in support of the income of the deceased does not justify adoption of the lowest tier of minimum wage while computing the income

Present appeal is directed against a judgment and award in Application passed by learned Member, Motor Accident Claims Tribunal, Mumbai (Tribunal'), whereby the compensation of Rs. 3,20,000 was awarded under Section 166 of the Motor Vehicles Act, 1988 ('MV Act') in respect of the death of Digesh Mulchand Shah, the deceased son of the Appellants-original applicants. The only question which crops up for consideration is the justness of the compensation awarded by the Tribunal.

The Appellants canvassed a three-pronged submission. Firstly, the Tribunal committed an error in assessing the income of the deceased on notional basis. In the face of the uncontroverted facts that the deceased was dealing in a business and was an income-tax assessee, the income of the deceased could not have been assessed on notional basis. Secondly, no addition was made towards future prospects. Thirdly, the Tribunal wrongly applied the multiplier of '17' instead of '18'.

In the backdrop of the object of the provisions contained in Section 166 of the MV Act, the Tribunal and Courts are expected to determine the compensation so as to place the dependents in the same position as they would have been, had they not lost the breadwinner, in the accident. Thus, the endeavour to ascertain as to what was the loss of dependency.

In the case at hand, the learned Member of the Tribunal ought to have considered the nature of the avocation which the deceased was stated to be dealing in, and the situation in life of the deceased and the applicants. The deceased was a 24 years young man. The claim of the applicants that, they were dependent on him could not be impeached. The applicants made an effort to substantiate their claim that the deceased was dealing in a business and earned income, by placing a copy of Form 2D.

Determination of the notional income at Rs. 3,000 per annum, in the backdrop of the attendant circumstances, was on a much lower side. By any standard, a person who found himself in the similar situation as the deceased, in the year 2004, would have earned more than Rs. 100 per day.

Mr. Parkar was justified in placing reliance on the judgment of the Supreme Court in the case of Kirti and Ors. Vs. Oriental Insurance Co. Ltd. In the said case, the Supreme Court held that failure of the claimants to produce evidence in support of the income of the deceased does not justify adoption of the lowest tier of minimum wage while computing the income.

If the notional income of the deceased was to be computed, in the face of the material to indicate that the deceased had reported the income of Rs. 48,000 for the years 2000-2001, on a conservative estimate, notional income ought to have been assessed at Rs. 60,000 per annum. Deducing ½ towards the personal and living expenses, the loss of dependency would come to Rs. 30,000 per annum.

In view of the pronouncement of the Constitution Bench of the Supreme Court in the case of National Insurance Company Limited Vs. Pranay Sethi & Others, in case of a self-employed deceased, who was below 40 years of age, an addition of 40% of the established income is required to be made towards future prospects. In the case of Hem Raj Vs. Oriental Insurance Co. Ltd. & Ors., it has been laid down that future prospects ought to be allowed for those with notional income as well. Thus, a sum of Rs. 12,000 per annum is required to be added towards the future prospects.

Since the deceased was 24 years of age, multiplier of '18' was required to be applied. Thus, computation of loss of dependency would be Rs. 7,56,000. In view of the pronouncement of the Supreme Court in the case of Pranay Sethi, a sum of Rs. 15,000 is required to be added towards loss of estate, Rs. 15,000 towards funeral expenses, and Rs. 40,000 towards filial consortium, to each of the applicants. The opponent Nos. 1 to 3 -Respondent Nos. 1 to 3 are directed to jointly and severally pay Rs. 8,66,000 alongwith interest @ 7.5% per annum from the date of the application till realization, to the applicants. Appeal stands partly allowed.

Tags : Award Compensation Enhancement

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