Summary
The Supreme Court sustained motor-accident compensation of Rs 48 lakh with interest at 7.5% per annum, rejecting both the insurer’s demand for deductions and the claimants’ challenge to the reduced interest rate. The employer’s one-time ex gratia payment was not shown to be continuing salary assistance under service rules. The overall assessment remained just, particularly since the High Court had allowed only 40%, rather than 50%, for future prospects despite the deceased’s settled employment.
Issues
- Whether the employer’s ex gratia payment required deduction from compensation.
- Whether the income assessment and allowances justified modification of the award.
- Whether interest should be restored from 7.5% to 12% per annum.
Held
- The High Court correctly used last-drawn emoluments less income tax, deducted one-fourth for personal expenses given five dependents, and applied a multiplier of fifteen for age thirty-eight. The Tribunal’s projected post-promotion salary and other computational choices did not follow the governing principles. (¶ 9–11)
- The employer’s payment equal to one year’s gross salary was not shown to arise under service rules or provide continuing assistance. The precedent concerning continued salary assistance under the Haryana statutory scheme was distinguishable; no deduction from this award was necessary. (¶ 12–12.2)
- Although the settled employment suggested a 50% future-prospects addition rather than the High Court’s 40%, the overall award was reasonable. Any proposed deduction relating to assistance or allowances would effectively be offset by that higher addition, and no modification was warranted. (¶¶ 11.1, 12.3)
- In the context of the substantially enhanced compensation, 7.5% interest was reasonable and the Tribunal’s 12% rate was too high. The amount ultimately receivable remained just compensation. (¶ 13–14)
Result
Insurer’s and claimants’ appeals dismissed. High Court award of Rs 48 lakh with interest at 7.5% per annum from filing of the claim petition until realisation left undisturbed.