Gross salary including allowances must be used for calculating motor accident death compensation, not net salary.

The deceased, Manickam, a Special Sub-Inspector of Police, died in a motor accident on March 27, 2019, caused by the negligence of a driver from the Tamil Nadu State Transport Corporation (TNSTC).

The claimants (dependants) filed for compensation under Section 173 of the Motor Vehicles Act, 1988.

The Motor Accident Claims Tribunal, Salem, awarded Rs. 22,85,000/- based on the deceased's net salary.

Both the claimants and the Transport Corporation appealed the award—the former seeking enhancement and the latter challenging the quantum.

1. Whether the Tribunal erred in calculating compensation based on the "net salary" instead of the "gross salary" and excluding specific allowances.

2. Whether the addition for future prospects was correctly fixed at 10% instead of the 15% mandated for permanent employees.

The Court applied the principle that "gross salary" must be the basis for dependency calculations, noting that deductions like Provident Fund and Income Tax are part of total earnings.

It followed the precedent in Meenakshi v. Oriental Insurance Co. Ltd. (2024 SCC OnLine SC 1872), which held that transport, house rent, and provident fund allowances must be included in the salary to arrive at the dependency factor.

Furthermore, the Court applied National Insurance Company Limited v. Pranay Sethi and Others (2017 (2) TANMAC 609 (SC)) to determine a 15% addition for future prospects for permanent employees.

United India Insurance Co. Ltd. v. Satinder Kaur (2021) 11 SC 780 regarding the consolidation of consortium and love and affection heads.

The Court found the Tribunal’s quantification flawed as it relied on net income after deducting GPF, health insurance, and festival advances.

Relying on Meenakshi, the Court ruled that these components are part of the employee's earnings and should not be deducted for dependency purposes.

The Court revised the monthly income to the gross amount of Rs. 72,759/-.

Regarding future prospects, the Court corrected the Tribunal's 10% rate to 15% to align with the Pranay Sethi mandate for permanent government employees.

The Court then recalculated the annual income, deducted an estimated progressive income tax (5% and 20% slabs), applied a 1/3 deduction for personal expenses, and utilized a multiplier of 9.

The Holding established that gross salary, inclusive of statutory deductions as per Ex.P10, must form the base for calculating loss of dependency.

The TNSTC was ordered to deposit the enhanced amount within six weeks.