Allowances form part of salary when calculating a deceased employee’s income for motor accident compensation.

In brief

The question

Whether the deceased’s income for calculating dependency should reflect the revised pay and include transport, medical and washing allowances.

The court held

The appeal was partly allowed.

It also directed

The claimants were awarded an additional Rs.9,71,824, being the difference between the reassessed compensation of Rs.26,78,114 and the Tribunal’s award of Rs.17,06,290, with 9% interest from the date of the claim petition until realization.

The insurer was directed to deposit the enhanced amount within eight weeks, for disbursement to the claimants by NEFT/RTGS after verification.

01Facts

The deceased, aged 34, worked as a driver in the District and Sessions Court and died in a motorcycle–truck accident on 12 November 2008.

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The Tribunal attributed 15% contributory negligence to the deceased and 85% negligence to the truck driver, and awarded compensation of Rs.17,06,290.

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In the appeal, the claimants sought reassessment of the deceased’s income in light of the Sixth Pay Commission revision.

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The High Court obtained information from the District Court, Panchmahals, Godhra, concerning the deceased’s revised emoluments.

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02Issues

i.Whether the deceased’s income for calculating dependency should reflect the revised pay and include transport, medical and washing allowances.

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ii.Whether the claimants were entitled to enhanced compensation, and, if so, in what amount after accounting for contributory negligence.

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03Law Applied

The Court applied the principles governing motor-accident compensation: salary allowances form part of income; 50% future prospects were added because the deceased was a government servant; personal expenses were deducted at one-fifth; and a multiplier of 16 was applied for a deceased aged 34.

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The Court also awarded conventional amounts for loss of estate, loss of consortium and funeral expenses, and reduced the resulting compensation by the deceased’s 15% contributory negligence.

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The judgment does not identify any statute or precedent by name.

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04Reasoning

The Court accepted the revised emoluments as the appropriate basis for calculating income and rejected the insurer’s argument that transport, medical and washing allowances should be excluded, holding that allowances formed part of salary.

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It then added 50% future prospects, deducted one-fifth for personal expenses, applied a multiplier of 16 and added conventional heads, including consortium for nine claimants.

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After deducting 15% for the deceased’s contributory negligence, it assessed total compensation at Rs.26,78,114.

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The judgment records revised monthly emoluments of Rs.11,502 at paragraph 2, but the calculation uses Rs.11,422 per month (Rs.1,37,064 annually).

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