benefit of future prospects in computing the income of the deceased=an addition of 40 per cent on account of future prospects, having regard to the age of the deceased. The total compensation payable to the appellants in terms of the judgment in Pranay Sethi is computed below: • Income : Rs 3,000/- • Percentage increase towards future prospects : 40% • 3000 x 40% = Rs 1,200/- • Total income : Rs 4,200/- • One-third deduction : Rs 1,400/- • Income after deduction : Rs 2,800/- • Annual income = Rs 2,800 x 12 = Rs 33,600/- • Multiplier applied : 17 (since age of deceased was 30 years) 1 (2017)16 SCC 680 4 • Loss of dependency : Rs 33,600 x 17 = Rs 5,71,200/- • Loss of consortium : Rs 40,000/- • Loss of estate : Rs 15,000/- • Funeral expenses : Rs 15,000/- • Total compensation = Rs 6,41,200/- 8 Interest is allowed on the aforesaid amount at 9 per cent per annum from the date of the petition until payment. 9 The appeal is allowed in the above terms. There shall be no order as to costs.

1

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6639 OF 2018

(Arising out of SLP (C) No.28752 of 2013)

NUTAN RANI AND ANR ..APPELLANTS

VERSUS

GURMAIL SINGH AND ORS ..RESPONDENTS

J U D G M E N T

Dr D Y CHANDRACHUD, J

1 The appeal is from a judgment of the High Court of Punjab and Haryana

at Chandigarh dated 23 February 2011, in a first appeal against a decision of

the Motor Accident Claims Tribunal, Chandigarh.

2 The appellants are the heirs and legal representatives of Ashok Kumar

who died as a result of an accident on 31 March 1994. He was 30 years old at

the time of the accident and worked as a commission agent/salesman with a

firm in Ludhiana. The accident took place while he was travelling in a bus

REPORTABLE

2

belonging to the Chandigarh Transport Undertaking. While he was alighting

from the bus, it moved abruptly which caused him to fall. The fall resulted in

serious injuries and led to his death on the following day.

3 The heirs of the deceased filed a claim petition under Section 166 of the

Motor Vehicles Act, 1988 before the tribunal, to seek compensation of Rs.20

lakhs. The Tribunal held that negligence on the part of the bus driver was not

proved. However, an amount of Rs.50,000 was awarded towards no fault

liability together with interest at 12 per cent per annum.

4 In appeal, the High Court drew an adverse inference on account of the

non-examination of the bus driver and awarded a total compensation of

Rs 3,98,500. However, the rate of interest was reduced to 6 per cent per

annum. Aggrieved by the judgment of the High Court, the heirs are in appeal.

5 The learned counsel appearing on behalf of the appellants has assailed

the award of compensation by urging that:

i. No addition on account of future prospects was made;

ii. The High Court erred in deducting 1/3rd of the amount towards

personal expenditure without considering that the income of the

deceased was extremely low, at Rs. 3,000 per month. A person

earning a low income, who has a family to feed, would not spend 1/3rd

of his income towards his personal expenditure; and

3

iii. The rate of interest was reduced from 12% as awarded by the MACT

to 6% without adequate reason.

6 We find merit in the submission that the High Court erred in not granting

the benefit of future prospects in computing the income of the deceased. Having

due regard to the judgment delivered by the Constitution Bench of this Court in

National Insurance Company Ltd. v Pranay Sethi1

, an addition towards

future prospects is warranted. The deduction of one-third towards personal

expenses is proper.

7 The decision of the Constitution Bench in Pranay Sethi (supra), warrants

an addition of 40 per cent on account of future prospects, having regard to the

age of the deceased. The total compensation payable to the appellants in terms

of the judgment in Pranay Sethi is computed below:

• Income : Rs 3,000/-

• Percentage increase towards future prospects : 40%

• 3000 x 40% = Rs 1,200/-

• Total income : Rs 4,200/-

• One-third deduction : Rs 1,400/-

• Income after deduction : Rs 2,800/-

• Annual income = Rs 2,800 x 12 = Rs 33,600/-

• Multiplier applied : 17 (since age of deceased was 30 years)

1

(2017)16 SCC 680

4

• Loss of dependency : Rs 33,600 x 17 = Rs 5,71,200/-

• Loss of consortium : Rs 40,000/-

• Loss of estate : Rs 15,000/-

• Funeral expenses : Rs 15,000/-

• Total compensation = Rs 6,41,200/-

8 Interest is allowed on the aforesaid amount at 9 per cent per annum from

the date of the petition until payment.

9 The appeal is allowed in the above terms. There shall be no order as to

costs.

…………………………………….CJI

[DIPAK MISRA]

…………………………………….J

[A M KHANWILKAR]

…………………………………….J

[Dr D Y CHANDRACHUD]

New Delhi;

July 20, 2018