Summary
A 28-year-old scrap dealer died in 2010 when a bus crashed into his car near Indore. He left seven dependants: two wives, three children and his parents. The Tribunal ignored his income tax return because no earlier returns were filed, and took a notional Rs 4,000 a month; the Madhya Pradesh High Court raised it to Rs 5,000. The Supreme Court held that an income tax return is a statutory document on which income should be determined where it is available. It fixed income at about Rs 9,855 a month, upheld 40% future prospects, and held that with more than six dependants the personal deduction should be one-fifth. It added the 10% Pranay Sethi increment to conventional heads, with Rs 44,000 consortium to the spouse and each child. Compensation was raised to Rs 25,91,388 with 9% interest.
Issues
- Whether the deceased's income tax return could be disregarded because earlier returns were not produced.
- What personal deduction, future prospects and conventional-head amounts apply to a self-employed 28-year-old survived by seven dependants.
Provisions considered
- Sections 166 and 168, Motor Vehicles Act, 1988Just compensation is to be fair and equitable, determined irrespective of the amount claimed, applying the Sarla Verma and Pranay Sethi standards for deduction, future prospects and conventional heads. (¶¶ 10, 11, 13, 14)
Held
- Following Malarvizhi, an income tax return is a statutory document on which annual income is to be determined where it is available; the courts below erred in disregarding the 2009-10 return, and income is fixed at Rs 1,18,261 a year (about Rs 9,855 a month). (¶ 9)
- Under Sarla Verma, affirmed in Pranay Sethi, where a married deceased leaves more than six dependants the personal deduction should be one-fifth, not one-fourth; the High Court rightly added 40% future prospects for a self-employed person below 40. (¶¶ 11, 12, 15)
- The High Court rightly relied on Pranay Sethi for conventional heads but erred in not applying the 10% enhancement every three years; following Satinder Kaur, spousal consortium and parental consortium to each of the three children are awarded at Rs 44,000 each. (¶¶ 16, 17)
Result
Civil Appeal No. 9014 of 2022 allowed to the extent indicated; the Madhya Pradesh High Court (Indore Bench) judgment dated 16.08.2018 in M.A. No. 2592 of 2013 modified and compensation enhanced to Rs 25,91,388 with interest at 9% per annum from the date of the claim application until payment.