Niyamat Bano & Ors. - Appellant Versus Tara Chand & Ors. - Respondent

Core ratio / Key holding

Headnote

Motor Vehicles Act, 1988 — Compensation — Income Tax Deduction

Motor Vehicles Act, 1988 — Compensation — Deduction for Personal Expenses — Six Dependents

Motor Vehicles Act, 1988 — Compensation — Future Prospects — Applicability to Self-Employed and Daily Wage Earners

Motor Vehicles Act, 1988 — Compensation — Future Prospects — Deceased Aged 38 Years

Ratio decidendi

• For calculating compensation under the Motor Vehicles Act, the tax liability on the deceased's income, as per Income Tax Act, must be deducted from the income for computation.
• Where there are six dependents, the deduction from the deceased's income for personal expenses, for the purpose of compensation under the Motor Vehicles Act, should be 1/5th, in line with the principles laid down in Sarla Verma.
• Future prospects must be allowed for compensation calculation under the Motor Vehicles Act, not only for persons with permanent employment but also for self-employed individuals with sufficient stability and steadiness in income, and even for those earning on a daily, monthly, or seasonal basis, considering the increase in cost of living and wages over time.
• For a deceased aged about 38 years, the future prospects for compensation under the Motor Vehicles Act should be enhanced by 50% of the income.

Important points

• Appeal partly allowed, enhancing total compensation to Rs. 21,20,410/- from Rs. 13,85,304/-.
• Enhanced compensation amount to carry interest at 6% per annum from the date of award until actual payment.
• Tribunal directed to deposit enhanced amount in Monthly Income Scheme (MIS) for claimants, permitting monthly/quarterly interest withdrawal.
• MIS for minor sons and daughters to be renewed from time to time until they attain the age of majority.

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