Motor accident compensation must be based on actual income, not uncertain prospective salary revisions.

Vipul Kumar Singh, aged approximately 24 years, was struck by a truck bearing registration no. KA-40-5995 while standing near the main gate of Hindustan Petroleum Corporation Limited (HPCL) on 18 July 2009. The truck was allegedly driven rashly and negligently and hit the HPCL entrance, injuring the deceased. He was initially taken to a hospital in Dharwad and was subsequently shifted to AIIMS, Delhi, where he died

The Motor Accident Claims Tribunal, Karkardooma Courts, awarded compensation of ₹19,35,963 with interest at 9% per annum by award dated 9 September 2013, followed by an order dated 12 November 2013. The claimants appealed seeking enhancement, principally challenging the multiplier, assessment of income, deductions, and non-pecuniary compensation

The evidence established that the deceased had joined HPCL as an Officer Trainee and was later absorbed as an Operation Officer against a permanent post. His salary certificate showed a monthly salary of ₹34,072, while a possible revised salary of ₹55,756 was claimed on the basis of a subsequent pay revision

1. Whether the multiplier for computing loss of dependency should be based on the age of the deceased rather than the age of his mother, and whether the appropriate multiplier was 18 instead of 11?

2. Whether the deceased’s income should be assessed at the claimed revised salary of ₹55,756 per month or at the income actually received or payable to him on the date of the accident?

3. Whether the claimants were entitled to compensation for loss of consortium, loss of estate, and funeral expenses, and whether loss of love and affection could be separately awarded?

4. Whether the Tribunal had correctly calculated income-tax deductions and the resultant loss of dependency?

The Court applied the principles in Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121, that the multiplier is to be selected with reference to the age of the deceased and that, in the case of a bachelor, one-half of the income is ordinarily deducted towards personal and living expenses

It also relied on National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, concerning standardized computation of compensation and addition towards future prospects

The Court held that speculative or contingent future income cannot be treated as the deceased’s established income; the income actually received or to which he was entitled on the date of death must first be assessed, with future prospects added thereafter

Applying United India Insurance Co. Ltd. v. Satinder Kaur, (2021) 11 SCC 780, the Court held that loss of love and affection could not be awarded separately where compensation for loss of consortium was granted. Funeral expenses and loss of estate were assessed at ₹15,000 each

The Tribunal had adopted a multiplier of 11 based on the deceased’s mother’s age of 52 years. Applying the standardized approach in Sarla Verma and Pranay Sethi, the High Court held that the deceased was 24 years old and therefore the appropriate multiplier was 18

On income, the Court rejected the claim of ₹55,756 per month because that amount depended upon the deceased’s completion of specified tests, assessments, and evaluations and was therefore contingent rather than assured

The Court consequently retained the Tribunal’s net monthly salary of ₹31,659, deducted income tax of ₹31,911 from the annual salary of ₹3,79,908 for FY 2008–09, and arrived at a rounded monthly post-tax income of ₹29,000

Since the deceased was a bachelor, one-half was deducted towards personal expenses; 50% was then added towards future prospects, producing a monthly loss of dependency of ₹21,750 and an annual loss of dependency of ₹2,61,000. Applying the multiplier of 18, the loss of dependency was calculated at ₹46,98,000

The Court further awarded ₹80,000 for loss of consortium to both parents, ₹15,000 for loss of estate, and ₹15,000 for funeral expenses, while deleting the separate award of ₹1,00,000 for loss of love and affection

The insurer was directed to deposit the enhanced amount with the Tribunal within six weeks, after which it was to be released to the claimants in lump sum, in accordance with the apportionment directed by the Tribunal

The originally awarded amount, if not already released, was also directed to be paid according to the Tribunal’s directions