Fixed-salary private employees aged 40–50 are entitled to 25% future prospects, not 30%.

In brief

The question

1. Whether the Tribunal erred in assessing the deceased’s income by excluding medical reimbursement, productive incentive, other allowances, and income-tax components.

The court held

The two-day delay in filing the appeal was condoned, and the accompanying application was disposed of.

It also directed

The Court dismissed the appeal for enhancement, holding that the Tribunal had correctly assessed the deceased’s income, deducted income tax and non-salary components, and applied a 25% addition towards future prospects.

The award of ₹97,68,010, together with interest at 6% per annum and the liability imposed on the Insurance Company, therefore remained undisturbed.

All pending applications were also ordered to stand closed.

01Facts

Anil Kumar died in a motor-vehicle accident on 1 February 2024 when his motorcycle was struck by a car allegedly driven rashly and negligently by Govind Yadav. An FIR was registered under Sections 279 and 304-A IPC.

p. 2

His dependants filed a claim petition under Section 166 of the Motor Vehicles Act, 1988, asserting that he was employed as a Supervisor with Hero MotoCorp Ltd. and earned ₹1,00,000 per month.

p. 2

The Motor Accident Claims Tribunal, Rewari, held the car driver negligent and awarded ₹97,68,010 as compensation, with interest at 6% per annum.

pp. 3–4

The claimants appealed, contending that the Tribunal had wrongly excluded certain allowances and income-tax components and had awarded only 25%, instead of 30%, towards future prospects.

p. 5

The Court also condoned a delay of two days in filing the appeal.

p. 1

02Issues

i.1. Whether the Tribunal erred in assessing the deceased’s income by excluding medical reimbursement, productive incentive, other allowances, and income-tax components.

pp. 5–6 · ¶ 10–10.3

ii.2. Whether the Tribunal ought to have awarded 30%, instead of 25%, towards future prospects.

p. 6 · ¶ 11

iii.3. Whether the claimants were entitled to enhancement of the compensation awarded by the Tribunal.

pp. 6–7 · ¶ 12–13

03Law Applied

The Court applied Section 166 of the Motor Vehicles Act, 1988, governing claims for compensation arising from motor-vehicle accidents.

p. 2

For assessment of income, it relied on Oriental Insurance Co. Ltd. v. Smt. Sarita Devi Panwar, 2006 (50) RCR (Civil) 509, for the principle that basic salary, dearness allowance, and house-rent allowance may be included in income, while non-salary reimbursements and incentives are not ordinarily treated as fixed income.

p. 5 · ¶ 10

It further relied on Reshma Kumari v. Madan Mohan, (2013) 9 SCC 65, which holds that where income is taxable, actual salary means salary after deduction of income tax.

p. 6 · ¶ 10.2

For future prospects, the Court applied National Insurance Co. Ltd. v. Pranay Sethi, 2017 (4) RCR (Civil) 1009, under which a deceased aged between 40 and 50 years and employed on a fixed salary is entitled to an addition of 25%.

p. 6 · ¶ 11

The Court also reiterated that compensation must be just and reasonable and should neither be a windfall nor inadequate, relying on State of Haryana v. Jasbir Kaur, Divisional Controller, KSRTC v. Mahadeva Shetty, (2003) 7 SCC 197, and General Manager, KSRTC v. Susamma Thomas, (1994) 2 SCC 176.

p. 7 · ¶ 12

Provisions in the judgment · 2 · Linked ones open on LawLens

Motor Vehicles Act, 1988 Section 166

Indian Penal Code, 1860 Section 279

04Reasoning

The Court found that the Tribunal had correctly treated ₹63,683 per month—comprising basic salary, variable dearness allowance, and HRA—as the deceased’s fixed salary.

pp. 5–6 · ¶ 10.1

The medical reimbursement of ₹25,960 and productive incentive of ₹9,815 were properly excluded because they were not part of his regular salary.

pp. 5–6 · ¶ 10.1

Since the deceased’s income was taxable, deduction of income tax was also legally justified under Reshma Kumari.

p. 6 · ¶ 10.2–10.3

The deceased was 42 years old and employed on a salary basis in a private concern; consequently, Pranay Sethi prescribed a 25% addition for future prospects, not 30%.

p. 6 · ¶ 11

On these findings, the Court held that the Tribunal’s computation—using one-fourth deduction for personal expenses and a multiplier of 14—did not warrant interference, and that the compensation awarded was fair and reasonable.

pp. 3–4, 7 · ¶ 6.1 and 12