Why was the personal-expense deduction reduced from one-third to one-fourth?
Coram: Justice K. Vinod Chandran · Justice Sudhanshu Dhulia
Motor Vehicles Act, 1988 — s.168 — Personal-expense deduction — Dependency of the surviving spouse — Just compensation — Held: Where the employment of the surviving husband is unspecified, it cannot be assumed that he was not at least partially dependent on the deceased's income; the dependent family must be reckoned as four, and the deduction towards personal expenses is one-fourth, not one-third. (¶7) Motor Vehicles Act, 1988 — Future prospects — Self-employed deceased below forty — Pranay Sethi — Held further: For a self-employed deceased below forty years of age, the addition for future prospects is limited to forty per cent as declared by the Constitution Bench in Pranay Sethi, and a multiplier of sixteen applies to a deceased aged thirty-five; the Tribunal's grant of fifty per cent was rightly deleted but must be restored at forty per cent. (¶8) Motor Vehicles Act, 1988 — Loss of consortium — Children's entitlement — No duplication with love and affection — Held further: Loss of consortium is not confined to the spouse but extends to the children, who are each entitled to it, and no separate sum for loss of love and affection can be added once consortium is granted; even so, the compensation as re-worked does not exceed that awarded by the Tribunal. Appeal disposed of with modifications. (¶9, 10)
Why was the personal-expense deduction reduced from one-third to one-fourth?
Because the surviving husband's employment was unspecified, so it could not be assumed he was wholly independent of the deceased's income; the dependent family was reckoned as four, attracting a one-fourth deduction.
What rate of future prospects applied and why?
Forty per cent, following the Constitution Bench in Pranay Sethi for a self-employed deceased below forty; the Tribunal's fifty per cent was rightly deleted but had to be restored at forty per cent, with a multiplier of sixteen for age thirty-five.
Who is entitled to loss of consortium?
Not the spouse alone — the children are each entitled to loss of consortium, and no separate award for loss of love and affection can be made once consortium is granted.
Did the enhanced heads increase the total award beyond the Tribunal's?
No. Although pro-rata conventional heads were adjusted, the re-worked award did not exceed the amount granted by the Tribunal.
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The appellants who were the claimants before the Tribunal sought compensation for the death of the wife of the first appellant whose children are second and third appellants. The claim arose from the death of a pillion rider in an accident which occurred on 22.02.2015, as a result of which the pillion rider succumbed to the injuries sustained in the accident; two days later i.e. on 24.02.2015. 3. Before the Tribunal, the claimants asserted an income of ₹15,000/- for the deceased, while she was alive, claiming her to be a Coolie. The Tribunal considering the unspecified work in which the deceased was employed, took the income at ₹7,000 and reduced 1/3rd of the income determined for personal expenses; finding the husband to be not dependent on the deceased, in which event the dependant family consisted of the deceased and her two children. Fifty percent was added for future prospects and considering the age of the deceased, i.e. 35 years, a multiplier of 16 was applied, determining the total loss at ₹13,44,000/-. On other heads also compensation was awarded totalling ₹18,81,966/- as shown hereinbelow: Nos. Particulars Amount in ₹ 1 Loss of dependency 13,44,000/- 2 Loss of consortium 50,000/- 3 Medical expenses 21,966/- 4 Transport and funeral expenses 30,000/- 5 Loss of estate 3,36,000/- 6 Love and affection 1,00,000/- Total 18,81,966/- 4. The insurance company filed appeal before the High Court against the award also alleging that the accident was not due to the rash and negligent driving of the motor cycle, based on the eye-witness testimony and also the charge-sheet registered against the driver. The High Court found the accident to have been caused due to the rash and negligent driving of the driver of the bike, whose owner is indemnified by the insurance company. We find no reason to differ from the said findings.
The next issue considered was as to whether the petitioner No.1 is a dependent. The husband of the deceased was not a dependent though he was a legal heir especially since he was an abled bodied person of 40 years, was the finding.
As far as the income of deceased though ₹15,000/- was claimed, the income determined by the Tribunal was ₹7,000. The High Court enhanced the income to ₹8,000/-; though there was no appeal by the claimants.
The deduction applicable for personal expenses was fixed at 1/3rd, considering the dependent family as one comprised of the deceased and only two children. However, we are of the opinion that since there was no employment specified of the husband, it cannot be assumed that he would not have been at least partially dependent on the income of the deceased. Hence the family has to be comprised of 4 in which circumstances the deduction for personal expenses shall be at 1/4th.
As far as the additions are concerned, the Tribunal accepted 50% as future prospects, which the High Court deleted. In National Insurance Co. Ltd. v. Pranay Sethi[^1], a Constitution Bench, insofar as a self-employed person below the age of 40 years, declared an addition for future prospects, which was limited to 40%. The appropriate multiplier to be applied was taken as 16 since the deceased was aged 35 years. The future prospects of 50% as awarded by the Tribunal was deleted which is proper, but this has to be granted at the rate of 40%. For loss of estate and funeral expenses, ₹15,000/- was granted while for loss of consortium a sum of ₹40,000/- was granted. In New India Assurance Company vs. Somwati2 held that loss of consortium is not restricted to the wife alone but has to be awarded to the children and parents.
Since there was no appeal filed from the order of the Tribunal determining the income at ₹7,000/-, we find no reason to increase the income but however, the claimant would be entitled to 40% for future prospects and the deduction for personal expenses will be 1/4th. The medical expenses as accepted by the Tribunal based on bills has to be granted. In addition to spousal loss of consortium children too are entitled at the rate of ₹40,000/-. In the above circumstances, we award the following compensation under the following heads: Nos. Particulars Amount in ₹ 1 Loss of dependency 16,12,800/- 8000x12x140%x16x1/4 2 Loss of consortium 1,20,000/- 3 Medical expenses 21,966/- 4 Transport and funeral expenses 15,000/- 5 Loss of estate 15,000/- Total 17,84,766/-
There is no scope for loss of love and affection, since already loss of consortium has been awarded. We are conscious of the fact that incremental increases have been made from the award of the Tribunal though the appellant had not challenged the Tribunal’s order. We are of the opinion that what has been enhanced is only the pro-rata amounts under the conventional heads, while the percentage adopted for future prospects and the deduction for personal expenses have been reduced. We do this exercise on the trite principle that what is to be awarded is ‘just compensation’ as has been held by the Constitution Bench. The award as modified by us also does not exceed that granted by the Tribunal. We dispose of the appeal with the above modifications.
Pending applications, if any, shall stand disposed of. ………….……………………. J. (SUDHANSHU DHULIA) ………….……………………. J. (K. VINOD CHANDRAN) NEW DELHI; APRIL 29, 2025.
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