TaxTMI 
TaxTMI 
2015 (3) TMI 1454
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....oceeding in a motor cycle as a pillion rider. The rider of the motor cycle applied sudden brake due to which both rider and pillion rider fell down and both sustained grievous injuries. The rider of the motor cycle died on the spot. Ravi who was a pillion rider sustained grievous injuries and was immediately rushed to the hospital. However, after six days i.e. on 20.12.2006, deceased-Ravi succumbed to the injuries. Deceased-Ravi was aged 45 years and he was engaged in a transport business of supplying newspapers from the Head Office destination to other places. The deceased was paying income-tax and was an income-tax assessee. Stating that the deceased was the only earning member of the family and that they have lost the support of the bread winner of the family, the claimants filed a claim petition claiming compensation of Rs. 33,90,000/-. 4. The tribunal has taken the income of the deceased-Ravi at Rs.75,000/- per annum and deducting 1/3rd towards the personal expenses of the deceased, the tribunal calculated the loss of dependency at Rs.50,000/- per annum. Taking the age of the deceased as 46 years, the tribunal adopted multiplier 13 and awarded compensation of Rs. 6,50,000/-....
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....d that in Reshma Kumari & Ors. vs. Madan Mohan & Anr [(2013) 9 SCC 65] ., this Court has held that where the deceased was self-employed, it would be appropriate not to make any addition to income for future prospects and the High Court rightly declined to make addition towards future prospects. It was submitted that the deceased was engaged in the business and was not earning fixed income and has filed returns for different years showing different income viz., gross income of Rs.1,08,713/- for the assessment year 2005-06 and Rs. 2,02,911/- for the assessment year 2006-07 which only indicates the disparity in income of the deceased. To strike a balance, High Court has rightly taken the average and rightly deducted 10% towards income tax and other deductions. It was submitted that the compensation awarded by the High Court is just and reasonable and no grounds have been made out by the claimants for enhancement of the compensation whatsoever. 8. I have carefully considered the rival contentions and perused the impugned judgment as also the award and the materials on record. 9. The deceased was doing transport business of supplying newspapers from the Head Office to the other de....
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....cultural work. 11. On behalf of the claimants, reliance was placed upon Rajesh's case (supra) to contend that even in the case of self-employed persons or persons with fixed wages, there must be an addition to the income of the deceased towards future prospects. In Sarla Verma's case (supra), this Court held that in case of salaried persons additions have to be made depending upon the age of the deceased to the actual income of the deceased while computing future prospects. In Santosh Devi vs. National Insurance Company Ltd. & Ors [(2012) 6 SCC 421], Sarla Verma was explained and it was held that the benefit of making addition to total income of persons who are self-employed or getting fixed wages was permissible. 12. The principles laid down in Santosh Devi's case (supra) were reiterated in Rajesh and Ors. vs. Rajbir Singh & Ors. (supra), wherein this Court held that the case of self-employed persons or persons with fixed wages, the actual income of the deceased must be enhanced for purpose of computation viz.(i) by 50% where his age was below 40 years; (ii) by 30% where he belonged to age group of 40 to 50 years, and (iii) by 15% where he was between age group of 50 to 60 y....
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....ects in case of self-employed or on fixed wages there should be an authoritative pronouncement, in National Insurance Company vs. Pushpa {S.L.P (C) No.16735/2014}, the matter has been referred to a larger Bench by the order dated 2.07.2014, in which one of us (Hon'ble Mr. Justice V. Gopala Gowda) was a member, which is pending consideration. 15. Section 168 of the Motor Vehicles Act enjoins the courts/tribunals to make award determining the amount of compensation which appears to be just and reasonable. The wide amplitude of such power does not empower the tribunal to determine the compensation arbitrarily, although the Act is a beneficial legislation, it can neither be allowed as a source of profit nor as a windfall to the persons affected. Determination of compensation has to be fair and reasonable and acceptable by the legal standards. In Nagappa vs. Gurudayal Singh & Ors [(2003) 2 SCC 274]., this Court held as under:- "10. Thereafter, Section 168 empowers the Claims Tribunal to "make an award determining the amount of compensation which appears to it to be just". Therefore, the only requirement for determining the compensation is that it must be "just". There is no ....
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....onventional damages like loss of consortium, loss of love and affection and funeral expenses. In Rajesh And Ors. vs. Rajbir Singh & Ors., (supra) and Jiju Kuruvila & Ors. vs. Kunjujamma Mohan & Ors [(2013) 9 SCC 166]., this Court has awarded substantial amount of Rs. 1,00,000/- towards loss of consortium and Rs. 1,00,000/- towards loss of love and affection and Rs.25,000/- towards funeral expenses. Following the same Rs. 1,00,000/- is awarded towards loss of consortium and Rs. 1,00,000/- towards loss of love and affection to the minor children and Rs. 25,000/- towards funeral expenses and Rs. 25,000/- towards loss of estate totalling to Rs. 2,50,000/-. Thus, the compensation awarded to the claimants is enhanced to Rs.19,32,310/-. 19. In the result, the compensation awarded to the claimants is enhanced and the compensation is awarded at Rs. 19,32,310/-. The enhanced compensation of Rs. 4,62,938/- is payable with interest at the rate of 9% per annum from the date of the claim petition till the date of realisation. Out of enhanced compensation of Rs. 4,62,938/- Rs. 3,12,938/- alongwith accrued interest shall be paid to the first appellant-wife of the deceased, balance Rs. 1,50,000/....
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....n should be only 30% if the age of the deceased was 40 to 50 years. There should be no addition, where the age of the deceased is more than 50 years. Though the evidence may indicate a different percentage of increase, it is necessary to standardise the addition to avoid different yardsticks being applied or different methods of calculation being adopted. Where the deceased was self-employed or was on a fixed salary (without provision for annual increments, etc.), the courts will usually take only the actual income at the time of death. A departure therefrom should be made only in rare and exceptional cases involving special circumstances." 3. Interestingly, in Reshma Kumari & Ors. (supra), which was ultimately decided in 2.4.2013 by a three judge Bench, which arose out of the matter referred by the order of two judge Bench dated 23.7.2009. That order had referred two questions:- "(1) Whether multiplier specified in the Second Schedule appended to the Motor Vehicles Act, 1988 (for short "the 1988 Act") should be scrupulously applied in all cases? And (2) Whether for determination of the multiplicand, the 1988 Act provides for any criterion, particularly as rega....
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....ecomes victim of an accident. The relevant paragraphs as discussed by this Court in Santosh Devi's case is extracted hereunder:- "14. We find it extremely difficult to fathom any rationale for the observation made in para 24 of the judgment in Sarla Verma case that where the deceased was self-employed or was on a fixed salary without provision for annual increment, etc., the courts will usually take only the actual income at the time of death and a departure from this rule should be made only in rare and exceptional cases involving special circumstances. In our view, it will be naïve to say that the wages or total emoluments/income of a person who is self-employed or who is employed on a fixed salary without provision for annual increment, etc., would remain the same throughout his life. 15. The rise in the cost of living affects everyone across the board. It does not make any distinction between rich and poor. As a matter of fact, the effect of rise in prices which directly impacts the cost of living is minimal on the rich and maximum on those who are self-employed or who get fixed income/emoluments. They are the worst affected people. Therefore, they put in....
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.... decisions of this Court in the cases of Sarla Verma & Ors. and Santosh Devi (supra) held thus: "8. Since, the Court in Santosh Devi case actually intended to follow the principle in the case of salaried persons as laid down in Sarla Verma case and to make it applicable also to the self-employed and persons on fixed wages, it is clarified that the increase in the case of those groups is not 30% always; it will also have a reference to the age. In other words, in the case of self-employed or persons with fixed wages, in case, the deceased victim was below 40 years, there must be an addition of 50% to the actual income of the deceased while computing future prospects. Needless to say that the actual income should be income after paying the tax, if any. Addition should be 30% in case the deceased was in the age group of 40 to 50 years." 7. Further, in National Insurance Company Ltd. v. Pushpa, this Court in SLP No. 16735 of 2014 (arising out of CC No. 8058 of 2014) vide order dated 2.7.2014 made a reference to a larger Bench in view of the seeming conflict between the legal principles with respect to future prospects laid down by this Court in the cases of Reshma Kumari & ....
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....ving examined the law laid down by the Constitution Benches in the abovesaid decisions, we would like to sum up the legal position in the following terms: (1) The law laid down by this Court in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or coequal strength. (2) A Bench of lesser quorum cannot disagree or dissent from the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing before a Bench of larger quorum than the Bench whose decision has come up for consideration. It will be open only for a Bench of coequal strength to express an opinion doubting the correctness of the view taken by the earlier Bench of coequal strength, whereupon the matter may be placed for hearing before a Bench consisting of a quorum larger than the one which pronounced the decision laying down the law the correctness of which is doubted. (3) The above rules are subject to two exceptions: (i) the abovesaid rules do not bind the discretion of the Chief Justice in whom v....
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....count of an accident resulting in the total disability of the victim as in the present case. Therefore, taking into account the age of the claimant (25 years) and the fact that he had a steady income, as evidenced by the income tax returns, we are of the view that an addition of 50% to the income that the claimant was earning at the time of the accident would be justified. 17. Insofar as the multiplier is concerned, as held in Sarla Verma or as prescribed under the Second Schedule to the Act, the correct multiplier in the present case cannot be 15 as held by the High Court. We are of the view that the adoption of the multiplier of 17 would be appropriate. Accordingly, taking into account the addition to the income and the higher multiplier the total amount of compensation payable to the claimant under the head "loss of income" is Rs. 10,53,150/- (Rs. 41,300/- + Rs. 20,650/- = Rs. 61,950/- x 17)." The clarification of the position, by a three judge Bench, in Rajesh & Ors., ipso facto could not have led to the conclusion that there was a conflict between the views of various Benches, since Santosh Devi itself had noticed Sarla Verma, the logic of which in respect....