Loss of Dependency calculation: select income reflecting earning capacity; latest assessment-year income used and conventional damages increased.

The text addresses computation of loss of dependency and enhancement of conventional damages in a motor-accident compensation context. It prescribes selecting the income figure that best reflects the deceased's earning capacity after legitimate deductions (taxes, professional tax, income from house property) and a one-fourth deduction for personal expenses; the assessment-year 2006-07 income was held to be the correct multiplicand, producing an annual dependency of Rs.1,20,165 and multiplier 14. It also increases conventional heads (total Rs.2,50,000) and fixes total compensation at Rs.19,32,310 with 9% interest until realization.

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Issues: (i) Whether the correct multiplicand for computation of loss of dependency is the average of income shown in assessment years 2005-06 and 2006-07 or the income shown in assessment year 2006-07; (ii) Whether the award for conventional heads (loss of consortium, loss of love and affection, funeral and estate) should be enhanced.

Issue (i): Whether the High Court was justified in taking the average income of assessment years 2005-06 and 2006-07 as the multiplicand for computing loss of dependency.

Analysis: The Court examined the income-tax returns filed for assessment years 2005-06 and 2006-07, the nature of the deceased's transport business and ancillary agricultural activity, and the approach of the tribunal and High Court to deductions (tax, professional tax, income from house property) and personal expenses. The Court noted divergent authorities on addition for future prospects but, without deciding the general question, applied the statutory duty to award just compensation and assessed which income figure best reflected the deceased's earning capacity given his age and nature of business.

Conclusion: The Court held that the income shown in assessment year 2006-07 (Rs. 2,02,911/-) should be taken as the multiplicand; after prescribed deductions and a one-fourth deduction for personal expenses, annual loss of dependency is determined at Rs. 1,20,165/-, and multiplier 14 is applied.

Issue (ii): Whether the amounts awarded under conventional heads should be increased.

Analysis: The Court considered precedents awarding substantial conventional damages for loss of consortium, love and affection and funeral expenses and evaluated the tribunal's and High Court's lower awards in that context.

Conclusion: The Court enhanced conventional damages, awarding Rs.1,00,000/- for loss of consortium, Rs.1,00,000/- for loss of love and affection to minor children, Rs.25,000/- for funeral expenses and Rs.25,000/- for loss of estate, aggregating conventional damages to Rs.2,50,000/-, and accordingly enhanced the total award.

Final Conclusion: The High Court's judgment is modified to increase the total compensation to Rs.19,32,310/-, with the enhanced portion payable with interest at 9% per annum from the date of claim petition until realization; the appeal is allowed.

Ratio Decidendi: Under Section 168 of the Motor Vehicles Act, 1988 the tribunal must award compensation that is just and reasonable; in assessing loss of dependency the court must select the income figure that fairly reflects the deceased's earning capacity after legitimate deductions and apply the appropriate multiplier and conventional heads to arrive at just compensation.

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