Summary
In motor accident claims by four daughters for the death of their parents, who ran a mill as partners, the Supreme Court set aside the High Court's sharp reduction of compensation and restored the Tribunal's award, holding that the children's becoming partners did not mean they suffered no loss of income, and that income tax returns were reliable evidence of the deceased's income.
Issues
- Whether the High Court was right to reduce the compensation on the ground that the claimants had stepped into their deceased parents' business as partners and the firm's income had not fallen.
- How the income of deceased partners of a business should be assessed for loss of dependency, and whether income tax returns are reliable evidence for it.
- Whether the Tribunal's award or the High Court's reduced figure represented just compensation.
Provisions considered
- Section 168, Motor Vehicles Act, 1988Through the passage of K Ramya it relied on, the Court reiterated that Section 168 requires just compensation, which must be fair, reasonable and equitable and assessed liberally; appellate interference is ordinarily warranted only where the award is exorbitant or arbitrary. On that footing it preferred the Tribunal's award to the High Court's reduction. (¶¶ 13, 14)
Held
- Children who step into the shoes of deceased parents in a business do not, by that fact alone, become able to run it as the parents did. Whether their lack of experience and maturity would cause an actual or expected fall in the business's profitability is a relevant factor in assessing loss of future income. (¶ 11)
- Transfer of the deceased's share in a business to the children is not enough to conclude that the business's benefits continue to reach the dependents; the Court relied on Sushma H.R. and K Ramya for this approach. (¶¶ 12, 13)
- Income tax returns are reliable evidence for assessing a deceased's income. Against the claimed annual incomes of Rs.25 lakhs (father) and Rs.20 lakhs (mother), the Tribunal's notional income of Rs.60,000 per month for each parent was reasonable. (¶ 11)
- The Tribunal's award was well-considered, while the High Court's reasoning ran against settled law; on a holistic view the Tribunal's award, not the High Court's reduced figure, represented just compensation. (¶¶ 11, 14)
Result
Appeals disposed of; High Court judgment set aside and the Tribunal's award (Rs.58,24,000 for the father and Rs.93,61,000 for the mother, with 7.5% interest) restored; insurer to pay, after adjusting amounts already paid, within six weeks; no order as to costs.