Income from all sources must be considered when calculating motor accident dependency compensation.

On 22 February 2006, the deceased, Chaudhari Madhabhai Bhagvanbhai, a truck driver and owner, was standing between two trucks parked on the roadside while speaking with another driver. A third truck, allegedly driven rashly and at excessive speed, collided with one of the parked trucks, crushing the deceased between the vehicles and causing his death.

The claimants asserted that the deceased earned income through driving, transportation, agriculture, truck ownership, and milk supply.

The Motor Accident Claims Tribunal partly allowed the claim petition and awarded ₹7,81,000 with interest at 7.5% per annum.

The claimants appealed seeking enhancement, while Opponent No. 3–Insurance Company challenged the computation of compensation, particularly the deduction towards the deceased’s personal expenses.

The Court applied the principles governing computation of compensation under the Motor Vehicles Act, 1988, including assessment of income from all established sources, addition for future prospects, deduction of the deceased’s personal expenses, and application of the appropriate multiplier.

Relying on National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, the Court added 25% towards future prospects for a deceased aged 42 years and applied the standardized conventional amounts for loss of estate and funeral expenses.

The Court also applied the principle that, where the deceased is survived by three dependants, one-third of the income should be deducted towards personal expenses.

Relying on Magma General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram, (2018) 18 SCC 130, it held that the widow and both children were entitled to compensation for loss of consortium.

The Court found that the Tribunal’s assessment of the deceased’s income at ₹3,000 per month was unduly low because the evidence established that he was a driver, owned a truck, co-owned agricultural land, and supplied milk to a cooperative society.

Considering all income sources and the 2006 accident year, it reassessed the monthly income at ₹7,500. Since the deceased was 42 years old, 25% was added for future prospects, resulting in a monthly income of ₹9,375.

As he left behind three legal representatives, one-third was deducted for personal expenses, leaving ₹6,250 per month as the contribution to the dependants.

Applying a multiplier of 14, the loss of dependency was calculated at ₹10,50,000.

The Court further awarded ₹1,45,200 towards consortium to the widow and two children, and ₹18,150 each towards loss of estate and funeral expenses.

The total compensation was consequently recalculated at ₹12,31,500, against the Tribunal’s award of ₹7,81,000.

The existing interest rate of 7.5% per annum from the date of filing of the claim petition until realization was maintained, including on the additional compensation.

The parties held liable by the Tribunal were directed to deposit the award, including the additional amount and interest, within six weeks of receiving the order, after which the Tribunal was directed to disburse the amount to the claimants subject to verification and deduction of any deficit court fee.

The impugned judgment and award were modified accordingly, with no order as to costs.