Future Prospects Must Align With Pranay Sethi Principles and Income Tax Deducted From Benchmark Income

On May 31, 2012, Kamaljeet (the deceased) was traveling in a Wagon-R when a Tata 407 (the offending vehicle) collided with his car, resulting in his death

The Motor Accidents Claims Tribunal (MACT), Tis Hazari Courts, passed an award on July 17, 2014, granting compensation of ₹93,15,000/- with 7.5% interest to the claimants (wife and parents)

The Insurance Company appealed this award, challenging the quantum of compensation regarding benchmark income, future prospects, and non-pecuniary heads

1. Whether the Tribunal erred in calculating the benchmark income by failing to deduct income tax

2. Whether the assessment of future prospects at 50% was legally sustainable for a person in private employment below 40 years of age

3. Whether the non-pecuniary damages (love and affection, funeral expenses, estate) required realignment with contemporary judicial precedents

4. Whether the principle of contributory negligence applied due to the head-on nature of the collision

The court primarily applied the principles for calculating "just compensation" under Section 168 of the Motor Vehicles Act, 1988

It relied on the Constitution Bench decision in National Insurance Company v. Pranay Sethi & Ors. (2017), which standardized future prospects at 40% for deceased individuals under 40 in private employment and fixed nominal damages for loss of estate and funeral expenses at ₹15,000 each

The court also applied United India Insurance Co. Ltd. v. Satinder Kaur (2021) regarding the deletion of "love and affection" and the granting of "filial and spousal consortium" at ₹40,000 per claimant

The Court found that the Tribunal failed to deduct ₹2,120 per month as income tax from the benchmark income, necessitating a reduction of the monthly income from ₹45,000 to ₹42,880

Applying Pranay Sethi, the Court held that since the deceased was 28 and privately employed, the 50% future prospects granted by the Tribunal must be reduced to 40%

Regarding non-pecuniary heads, the Court deleted the ₹1,00,000 awarded for "love and affection," replaced it with ₹1,20,000 for consortium (₹40,000 each for three claimants), and adjusted funeral and estate awards to ₹15,000 each

On the issue of contributory negligence, the Court rejected the appellant's plea, noting that the Insurance Company failed to provide rebuttal evidence against the filed charge-sheet and FIR

The Court maintained the interest rate at 7.5% and directed the release of the revised amount to the claimants in a 40:30:30 ratio (wife:father:mother) while ordering the refund of the excess deposited amount to the Insurance Company