Case Note & Summary
The appeal arose from a judgment of the Madras High Court which enhanced compensation from Rs 20,11,000 to Rs 33,07,000 for the death of a 30-year-old BSc graduate employed in a private company. The appellants, wife and mother of the deceased, challenged the quantum. The Supreme Court found that the High Court erred in discarding the salary certificate for May 2012 (Exhibit P-8) showing net pay of Rs 23,419, which was proximate to the accident date of 21 June 2012. The certificate was duly proved and marked, and the insurer failed to discredit it during cross-examination. The Court held that the salary certificate should be accepted as the basis for computing income. Applying the principles from National Insurance Company Limited v. Pranay Sethi, the Court computed compensation as follows: annual income Rs 2,81,028; less one-third personal expenses Rs 93,676; net income Rs 1,87,352; add 40% future prospects Rs 74,941; total income Rs 2,62,293; multiplier of 17 gives Rs 44,58,981; add standard additions Rs 70,000; total compensation Rs 45,28,981 (rounded to Rs 45.29 lakhs). Interest at 9% per annum from the date of claim petition was awarded. The enhanced amount was directed to be paid in equal proportion to the appellants. The appeal was allowed with no order as to costs.
Headnote
A) Motor Accident Compensation - Determination of Income - Salary Certificate Proximate to Accident - Where the deceased's salary certificate for the month immediately preceding the accident (May 2012) showed a net pay of Rs 23,419, and the certificate was duly proved and marked, the High Court erred in discarding it based on lower salaries in anterior periods. The Supreme Court held that the salary certificate proximate to the accident should be accepted as the basis for computing compensation. (Paras 5-7) B) Motor Accident Compensation - Future Prospects - Standard Additions - Multiplier - Following National Insurance Company Limited v. Pranay Sethi (2017) 16 SCC 680, the Court applied 40% future prospects, standard addition of Rs 70,000, and multiplier of 17 to compute enhanced compensation. (Para 8) C) Motor Accident Compensation - Apportionment - The enhanced compensation of Rs 45,28,981 (rounded to Rs 45.29 lakhs) with interest at 9% per annum from the date of claim petition was directed to be paid in equal proportion to the appellants (wife and mother of the deceased). (Paras 9-10)
Issue of Consideration
Whether the High Court was justified in discarding the salary certificate for May 2012 and determining the income of the deceased at Rs 15,000 per month instead of Rs 23,419 as per the certificate.
Final Decision
The appeal was allowed. The compensation was enhanced to Rs 45,28,981 (rounded to Rs 45.29 lakhs) with interest at 9% per annum from the date of filing of the claim petition until payment. The enhanced amount to be paid in equal proportion to the appellants. No order as to costs.
Law Points
- Motor Accident Compensation
- Salary Certificate Proximate to Accident
- Future Prospects
- Multiplier
- Standard Additions
