For an unmarried deceased, half the income is deductible where claimants are not wholly dependent.

The appeal under Section 173 of the Motor Vehicles Act, 1988, was filed by Shriram General Insurance Company against the award dated 10 March 2023 in Claim Case No. 13/2020.

The Claims Tribunal had awarded ₹76,35,985 to the claimants—namely, the deceased’s father and four siblings—and fastened liability upon the Insurance Company to satisfy the award.

The deceased, Ramesh Kumar, aged approximately 24 years, was an unmarried Government employee serving as a Constable in the 22nd Battalion and earning ₹30,395 per month.

The Insurance Company challenged the Tribunal’s refusal to attribute contributory negligence to the deceased, its failure to deduct income tax, and its deduction of only one-fourth towards personal expenses.

The claimants defended the award and additionally sought enhancement under the conventional heads, including funeral expenses.

Whether the deceased was guilty of contributory negligence in the head-on collision and whether any deduction should consequently be made from the compensation?

Whether income tax was required to be deducted from the deceased’s annual income after addition of future prospects?

Whether one-half, rather than one-fourth, of the deceased’s income ought to be deducted towards personal and living expenses, considering that he was unmarried and that the claimants’ dependency was not absolute?

Whether the amounts awarded under the conventional heads, including loss of estate and funeral expenses, required modification in accordance with applicable Supreme Court precedent?

Section 173 of the Motor Vehicles Act, 1988, permits an aggrieved party to appeal against an award of the Claims Tribunal.

The burden of establishing contributory negligence rests on the party asserting it; a mere allegation of a head-on collision is insufficient without cogent evidence demonstrating negligence by the deceased.

For computation of compensation, the principles in National Insurance Co. Ltd. v. Pranay Sethi, Sarla Verma v. Delhi Transport Corporation, and Magma General Insurance Co. Ltd. v. Nanu Ram govern future prospects, deductions for personal expenses, multiplier selection, and consortium.

A salaried deceased below 40 years is entitled to 50% addition towards future prospects where the applicable employment conditions justify such addition.

In the case of an unmarried deceased, ordinarily one-half may be deducted towards personal expenses, subject to the number and status of dependants; the actual dependency circumstances must be considered.

Income tax payable on the deceased’s income is deductible in determining the net annual income available for loss-of-dependency compensation.

The Court upheld the finding that the deceased was not contributorily negligent because the claimants’ eyewitness, Ramesh Diwan, consistently attributed rash and negligent driving to the truck driver, and his evidence was corroborated by the charge-sheet.

The Insurance Company did not examine the truck driver, owner, or any rebuttal witness, and therefore failed to produce reliable evidence establishing negligence by the deceased.

The Court accepted the deceased’s monthly income of ₹30,395 and the addition of 50% future prospects, producing an annual income of ₹5,47,110.

Applying the income-tax slabs for Assessment Year 2021–22, it deducted ₹21,922 as tax, resulting in a net annual income of ₹5,25,188.

Since the deceased was unmarried, his father owned approximately five acres of agricultural land, the deceased contributed only ₹5,000–₹6,000 monthly to the household, and the siblings could become financially independent, the Court modified the deduction for personal expenses from one-fourth to one-half.

Applying a multiplier of 18, the loss of dependency was calculated at ₹47,26,692.

The Court retained consortium of ₹2,20,000 for five claimants and fixed loss of estate and funeral expenses at ₹16,500 each.

It nevertheless allowed the appeal partly by deducting income tax, increasing the deduction towards the deceased’s personal expenses from one-fourth to one-half, and modifying the conventional heads.

The total compensation was consequently reduced from ₹76,35,985 to ₹49,79,692, while the remaining conditions of the Tribunal’s award were left undisturbed.

The Registry was directed to communicate the modified award amount to the claimants in Hindi Devanagari, with assistance from paralegal workers where necessary.