Allowances benefiting family and 50% future prospects for private employees are includable in loss of dependency.

In brief

The question

1. Whether the deceased could be considered in permanent employment for the grant of 50% future prospects despite being in a private company.

The court held

The Court dismissed both appeals and confirmed the MACT’s Award in its entirety.

It also directed

It held that the compensation was just and reasonable and directed the release of the remaining 50% of the deposited amount along with accrued interest to the claimants as per the original Award. Statutory deposits are to be refunded to the Insurance Company only upon compliance with the deposit orders.

01Facts

Both the Insurance Company and the claimants challenged the Award dated 31st July 2018 passed by the MACT, Karkardooma Courts, in MAC Suit No. 684/2016.

pp. 1-2

The deceased was an Assistant General Manager at Dr. Oetker India Pvt. Ltd. (a well-reputed international company) since 2006, with a CTC of approximately Rs. 17.5 Lakhs per annum.

p. 2

The accident occurred on 15th June 2016.

p. 2

The Insurance Company sought reduction of compensation by contesting the 50% future prospects and the inclusion of conveyance allowance in income, while the claimants sought enhancement via inclusion of share capital and bonuses.

pp. 2-3

02Issues

i.1. Whether the deceased could be considered in permanent employment for the grant of 50% future prospects despite being in a private company.

p. 2, para 2(i)

ii.2. Whether conveyance/transport allowance should be excluded from the calculation of income for dependency.

p. 3, para 2(ii)

iii.3. Whether share capital and one-time bonuses should be included in the calculation of loss of dependency.

p. 3, para 2(iii)

iv.4. Whether the interest rate awarded by the MACT should be reduced from 9% to 7.5%.

p. 3, para 2(iv)

03Law Applied

The court applied the principles of dependency calculation under the Motor Vehicles Act, 1988.

Regarding future prospects in private employment, it relied on Oriental Insurance Co. Ltd. v. Sneha Lata and Anjum Ansari v. R. Rajesh Rao.

p. 2

For the inclusion of allowances, the court followed National Insurance Co. Ltd. v. Indira Srivastava (2008), National Insurance Co. Ltd. v. Nalini (2024), and Meenakshi v. Oriental Insurance Co. Ltd. (2024), which establish that allowances benefiting the family, including transport, must be included in income.

p. 3

Section 171 of the MV Act was cited regarding the discretionary power of the Tribunal to award interest.

p. 3

Provisions in the judgment · 1 · Linked ones open on LawLens

Motor Vehicles Act, 1988 Section 171

04Reasoning

The Court found the deceased had a stable 10-year tenure at a reputable international firm and had recently received an increment, justifying her status as being in permanent employment for the purpose of granting future prospects.

p. 2

Applying the Indira Srivastava line of precedents, the Court rejected the Insurance Company’s plea to deduct conveyance allowance, as such benefits accrue to the family.

p. 3

Conversely, the Court rejected the claimants' demand for share capital inclusion, reasoning that "loss of dependency" must be assessed on regular, consistent income rather than one-time bonuses or equity.

p. 3

Regarding interest, the Court exercised its discretion under Section 171, refusing to lower the 9% rate given the dependency of two daughters and elderly parents.

pp. 3-4