Page 1 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.5513 OF 2012

(arising out of SLP(C)No.6367 of 2012)

VIMAL KANWAR & ORS.        …. APPELLANT

VERSUS

KISHORE DAN & ORS.           ….RESPONDENTS

J U D G M E N T

SUDHANSU JYOTI MUKHOPADHAYA, J.

The present appeal is filed against the judgment of  

the  Rajasthan High Court,  Jaipur Bench in S.B. Civil  

Misc.   Appeal   No.   1831   and   2071   of   2003.       By   the 

impugned judgment dated 29

th

  July, 2011, the Rajasthan  

High Court  upheld the compensation awarded by the Motor  

Accident Claims Tribunal, Jaipur (hereinafter referred  

to as the ‘Tribunal’)  and observed as  follows:

“13. In  the  situation,  in  the  light  of  the  

above   detail   and   analysis   it   appears   that   the 

learned tribunal’s basis of calculating amount of  

compensation might be erroneous but in totality  

determined, assessed and awarded total amount of  

compensation   Rs.14,93,700/­   is   proper   and  

justified,   and   there   is   no   adequate   basis   for 

increasing   or   reducing   it.   Therefore,   judgment 

dated   21.06.2003   by   Motor   Accident   Claims  

Tribunal, Jaipur is affirmed and appeals by the  

appellants and Insurance Company are dismissed.”

1

Page 2 2.  The   factual   matrix   of   the   case   is   that   on   14

th 

September,   1996   one   Mr.   Sajjan   Singh   Shekhawat   was 

sitting on his scooter which was parked on the side of  

the road and was waiting for one Junior Engineer, N.  

Hari Babu and another whom he had called for discussion.  

At that time, the non­applicant No.1, driver of the Jeep  

No.RJ­10C­0833   came   driving   from   the   Railway   Station 

side with high speed, recklessly and negligently and hit  

the scooter. Sajjan Singh along with his scooter came  

under the Jeep and was dragged with the vehicle.  Due to  

this accident fatal injuries was caused to him and on  

reaching the Hospital he expired.  The scooter was also  

damaged completely.

3. Appellant no. 1, the wife of the deceased was aged  

about 24 years;  appellant no. 2, the  daughter was aged  

about 2 years and appellant no. 3,   the   mother   was  

aged   about   55   years   at   the   time   of     death   of   the 

deceased.  They jointly  filed an application to the Tribunal alleging that

negligent and rash driving by non-applicant no. 1 caused the death of Sajjan Singh and

claimed compensation of Rs.80,40,160/­.   It was brought  

to the notice of the Tribunal that non­applicant no. 1,  

the   jeep   driver   was   in   the   employment   of   the   non­

2

Page 3 applicant no. 2 and the non­applicant no. 3, the United  

India Insurance Co. Ltd. was the insurer of the vehicle.  

4.The   non­applicant   No.3,   Insurance   Company   on  

appearance filed written statement and alleged that the  

vehicle   owner   has   violated   the   conditions   of   the  

Insurance   Policy   by   not   informing   them   about   the  

accident.  Further,  according to the Insurance Company  

the vehicle owner should prove the fact that at the time  

of   accident,   the   Jeep   driver,   non­applicant   No.1   was 

holding a valid and effective driving licence.

5.Altogether five issues were framed by the Tribunal:

 “1.Whether due to the vehicle in question Jeep  

No. RJ 10C 0833 being driven by driver, non­

applicant   No.1   on   14.09.1996,   in   front   of 

Assistant   Engineer   Office,   PWD,   within   the 

jurisdiction   of   Police   Station   Churu,  

negligently   and   recklessness   and   caused  

accident   and   injuries   due   to   which   Sajjan 

Singh Shekhawat S/o Bhanwar Singh expired.

2. Whether above said vehicle driver at the time  

accident   was  in employment  of  non­applicant  

No.2   and   was   working   for   his   benefit   and 

profit. 

3. Whether   the   non­applicant   No.3,   Insurance  

Company in view of the preliminary objections  

and preliminary statement in their reply, are  

relieved of their liability and if not what  

is the effect thereon. 

4 Whether the applicant are entitled to get the  

claim amount or any other justified amount,  

and if yes which applicant is entitled to how  

much   compensation   and   from   which   non­

applicant.

5. Relief.”.

3

Page 4 6.The first issue was answered by the Tribunal in an  

affirmative manner.  It was  held that the reckless and  

negligent driving of the driver of  Jeep No.RJ 10C 0833  

caused   the   accident   which   resulted   in   the   death   of 

Sajjan Singh Shekhawat.   Issue Nos. 2 and 3 were also  

decided in favour of the applicants.

7.Issue Nos. 4 and 5 were related to the entitlement  

of appellants towards the claims and the relief to be  

granted.     The Tribunal determined the compensation to  

be granted in favour of the appellants at Rs.14,93,700/­  

jointly. 

8.The actual salary of the deceased was reduced by  

the   Tribunal   by   deducting   certain   amounts   towards  

Provident   Fund,   Pension   and   Insurance.     Without   any 

reason,   the   Tribunal   also   reduced   the   salary   at   Rs. 

8,000/­ per month though actual salary of the deceased  

as per Last Pay Certificate (for short ‘LPC’) was Rs.  

8,920/­. Out of such reduced salary of Rs. 8,000/­,  the  

Tribunal further deducted a sum of Rs.1,000/­ per  month  

towards   Provident   Fund,   Pension   and   Insurance   and  

thereby  considered  the  actual salary of deceased to  

be  Rs.7,000/­ per month.  An amount of Rs. 4500/­ was  

added to it towards future income and, thereby the net  

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Page 5 income of deceased was assessed at 11,500/­ per month  

(Rs.7,000/­ + Rs.4,500/­).

9.Admittedly,   Sajjan   Singh   died   at   the   age   of   28 

years and 7 

½  months .  He was in the services of the

State Government posted as an Assistant Engineer.   In  

the   normal   course,     he   would   have   continued   in   the 

services of the State Government upto February, 2026,  

until   attaining   58   years   or     upto     February,   2028, 

until attaining 60 years. As per the decision of this  

Court   in   the   case   of  Sarla   Verma   &   Ors.     v.   Delhi 

Transport Corporation & Anr. (2009) 6 SCC 121,    Sajjan 

Singh having died at the age of  28 years 7 

½ months,

the multiplier of 17 is applicable in calculating the  

compensation.     But   the   Tribunal   applied   the   lower  

multiplier of 15 on the ground  that the wife would be  

getting   family   pension   and   would   get   job   on   the  

compassionate   ground   and   the   daughter,   aged   about   2 

years would get married in future.

10.Though the High Court noticed the aforesaid mistake  

it upheld the compensation.    A notional deduction of  

income tax was made by the High Court from the salary of  

the deceased apart from the deduction of  annual pension  

and came to the conclusion that the award passed by the  

5

Page 6 Tribunal was just and proper as  apparent from paragraph  

11 of the judgment which reads as under: 

“11. If   calculate   according   to   the   rate   of 

tax   in   the   year   1996,   we   find   that   in   the 

assessment year 1996­97 on Rs.40,000/­ no tax was  

payable.   On further income of Rs.20,000/­, 20%  

was   payable,   on   further   income   of   Rs.60,000/­, 

30% of income was taxed.  1/3

rd

 of the salary or  

Rs.15,000/­   which   ever   was   less   was   standard 

deduction.  Accordingly deducting Rs.15,000/­ as  

standard   deduction   taking   into   account   the  

savings   and   on   applying   rebate   of   Rs.12,000/­ 

under   Section   80C   of   the   Income   Tax   Act,   the 

amount   which   remains,   on   that   Rs.5812/­   is  

payable   as   tax.   Thus,   deducting   taxable   amount 

out   of   income   is   Rs.1,01,228/­.   The   appellant 

Vimal Kanwar has herself stated that after death  

of her husband she receives Rs.1460/­ per month  

as   pension.     The   pension   received   on   death   of 

husband   should   also   be   deducted.     Thus,   on  

deducting   annual   pension   of   Rs.17,520/­   the  

income is Rs.1,83,708/­ per annum. According to  

Sarla Verma judgment increasing 50%   for future  

prospects   the   amount   becomes   Rs.1,25,562/­   per 

annum, out of this deducting 1/3

rd

  for personal 

expenses of the deceased and applying multiplier  

of   17   according   to   age   of   the   deceased   this 

amount is Rs.14,23,036/­. The tribunal on account  

of   being   deprived   of   income   the   deceased   has 

granted Rs.14,78,700/­ to the deceased.”

11.The  High   Court  noticed  that  the  Tribunal   wrongly  

applied the multiplier of 15 but refused to interfere  

with the award on the following grounds:

“12.  IT is correct, that despite the revise  

LPC being on record and showing salary to be  

Rs.8920/­ the tribunal has accepted salary to  

be Rs.8000/­ only out of this on account of  

GPF   and   State   Insurance   Rs.1000/­   has   been 

deducted   and   monthly   income   is   assessed   as 

Rs.7,000/­.   Thereafter,   taking   into   account 

increasing   income   in   future   etc.   Rs.4500/­ 

has been added and monthly income is assessed  

6

Page 7 to be Rs.11500/­ this assessment according to  

evidence on record and established law, does  

not   appear   to   be   proper.   It   is   also   worth 

mentioning   that   the   tribunal   for   granting 

compensation to the appellants has taken unit  

method   has   basis   but   while   doing   so   the 

amount that the deceased would have spent on  

his personal expenses which is deductable as  

per judgment of the Hon’ble Supreme Court in  

the Sarla Verma case and other cases has not  

been   deducted,   because   of   which   the  

dependency   is   not   properly   assessed.  

Thereafter, the multiplier of 15 applied by  

the   tribunal   also   does   not   seen   to   be   in 

accordance   to   law.   It   is   also   worth  

mentioning that assessing amount in the said  

manner   the   tribunal   had   not   deducted   the 

payable income tax and the amount of pension  

received by Smt. Vimal Kanwar due to death of  

deceased.   Similarly,   while   assessing  

dependency   deduction   for   GPF   and   State  

Insurance, addition of Rs.4,500/­ in monthly  

income and multiplier of 15 etc. is not in  

accordance   with   law.     But   it   is   worth  

mentioning that taking income of the deceased  

at the time of the accident is Rs.8,920/­,  

deducting   payable   income   tax   and   amount   of 

pension received by the wife of the deceased,  

the amount on account of loss of income to be  

given   to   the   appellant   comes   to  

Rs.14,23,036/­. It appears that the tribunal  

on   account   of   loss   of   income   has   granted 

Rs.14,78,700/­   and   for   all   the   remaining  

heads a total of Rs.15,000/­ only, which is  

definitely too less. All the three appellants  

should be granted proper compensation under  

heads of cooperation from the deceased, loss  

of   love   and   affection   and   service,  

protection, last rites, lost of estate and on  

doing   this   the   situation   that   emerges   is 

that,   the   total   amount   of   Rs.14,93,700/­  

awarded   by   tribunal   as   compensation   is  

justified and therefore, any interference in  

the   amount   of   awarded   compensation   is   not 

proper desirable or necessary.”

7

Page 8 12.Two   appeals,   one   preferred   by   the   appellants­

claimants   and   another   by   the   Insurance   Company,   were 

dismissed by the High Court by common impugned judgment  

dated 29

th

 July, 2011. 

13.From the facts and circumstances of the case,  the  

grievance   of   the   appellants   can   be   summarized   as  

follows:­ 

(i)   No amount can be deducted towards Provident  

Fund,   Pension   and   Insurance   amount   from   the   actual 

salary of the victim for calculating compensation.

(ii)    In the absence  of any  evidence,  the Court  

suo motu   cannot deduct any amount towards income tax  

from the actual salary of the victim.

 (iii)   On   the   facts   of   the   present   case,   the 

Tribunal   and   the   High   Court   should   have   doubled   the 

salary   by   allowing   100%   increase   towards   the   future 

prospects and 

(iv)   The   Tribunal   and   the   High   Court   failed   to 

ensure payment of just and fair compensation.

Reliance was also placed on decisions of this Court  

which will be discussed later in this judgment.

14.The   respondents   have   appeared   but   no   counter  

affidavit has been filed by them.  Learned counsel for  

8

Page 9 the respondents merely justified the award passed by the  

Tribunal and affirmed by the High Court. 

15.The issues involved in this case are:

(i)Whether Provident Fund, Pension and Insurance  

receivable by the claimants come within the periphery of  

the   Motor   Vehicles   Act   to   be   termed   as   “Pecuniary 

Advantage” liable for deduction. 

(ii)Whether  the  salary  receivable  by claimant  on  

compassionate appointment comes within the periphery of  

the   Motor   Vehicles   Act   to   be   termed   as   “Pecuniary 

Advantage” liable for deduction. 

(iii) Whether   the   income   tax   is   liable   to   be 

deducted   for   determination   of   compensation   under   the 

Motor Vehicles Act and

(iv)  Whether   the   compensation   awarded   to   the 

appellants is just and proper.

16.For  determination  of  the  aforesaid  issues,  it  is  

necessary   to   notice   the   relevant   facts   as   mentioned 

hereunder. 

17.Smt.   Vimal   Kanwar,   PW­3   (appellant   no.1   herein), 

who   is   the   wife   of   the   deceased   has   stated   in   her 

examination in chief that her husband obtained BE Degree  

from   Jodhpur   University   in   First   Class   and   he   was 

directly appointed to the post of Assistant Engineer in  

9

Page 10 the year 1994. At the time of accident he was 28 years  

old and was getting salary of Rs.9,000/­ per month.  If  

he had been alive he would have got promoted upto the  

rank of Chief Engineer.  

18.Ram   Avtar   Parikh,   PW­2   is   an   employee   of   Public 

Works Department, where the deceased was working.   He  

stated   that   Sajjan   Singh   was   working   on   the   post   of 

Assistant Engineer and at that time his monthly salary  

was   Rs.8,920/­.     In   support   of   his     statement   he 

produced the Last Pay Certificate and the Service Book  

(Exh. 1.) of the deceased. 

19.The first issue is “whether Provident Fund, Pension  

and Insurance receivable by claimants come within the  

periphery   of   the   Motor   Vehicles   Act   to   be   termed   as 

“Pecuniary Advantage” liable for deduction.”

The aforesaid issue fell for consideration before  

this Court in    Helen C. Rebello (Mrs) and others   vs. 

Maharashtra   State   Road   Transport   Corporation   &   Anr.  

reported in  (1999) 1 SCC 90.    In the said case, this  

Court held that  Provident   Fund,   Pension,   Insurance  

and   similarly   any   cash,   bank   balance,   shares,   fixed 

deposits,   etc.   are   all   a   “pecuniary   advantage”  

receivable by the heirs on account of one’s death but  

all these have no correlation with the amount receivable  

1

Page 11 under a statute occasioned only on account of accidental  

death.     Such   an   amount   will   not   come   within   the 

periphery   of   the   Motor   Vehicles   Act   to   be   termed   as 

“pecuniary   advantage”   liable   for   deduction.     The  

following was the observation and finding of this Court:

  “35.  Broadly, we may examine the receipt of the  

provident fund which is a deferred payment out of  

the   contribution   made   by   an   employee   during   the 

tenure of his service. Such employee or his heirs  

are entitled to receive this amount irrespective of  

the   accidental   death.   This   amount   is   secured,   is 

certain to be received, while the amount under the  

Motor Vehicles Act is uncertain and is receivable  

only on the happening of the event, viz., accident,  

which may not take place at all. Similarly, family  

pension   is   also   earned   by   an   employee   for   the 

benefit   of   his   family   in   the   form   of   his  

contribution in the service in terms of the service  

conditions receivable by the heirs after his death.  

The   heirs   receive   family   pension   even   otherwise 

than the accidental death. No correlation between  

the   two.   Similarly,   life   insurance   policy   is  

received either by the insured or the heirs of the  

insured   on   account   of   the   contract   with   the  

insurer, for which the insured contributes in the  

form   of   premium.   It   is   receivable   even   by   the 

insured if he lives till maturity after paying all  

the   premiums.   In   the   case   of   death,   the   insurer 

indemnifies to pay the sum to the heirs, again in  

terms of the contract for the premium paid. Again,  

this  amount  is receivable  by the claimant  not on  

account   of   any   accidental   death   but   otherwise   on 

the   insured's   death.   Death   is   only   a   step   or 

contingency   in   terms   of   the   contract,   to   receive 

the   amount.   Similarly   any   cash,   bank   balance,  

shares,   fixed   deposits,   etc.   though   are   all   a 

pecuniary   advantage   receivable   by   the   heirs   on  

account   of   one's   death   but   all   these   have   no 

correlation   with   the   amount   receivable   under   a  

statute   occasioned   only   on   account   of   accidental 

death.   How   could   such   an   amount   come   within   the 

periphery of the Motor Vehicles Act to be termed as  

“pecuniary advantage” liable for deduction. When we  

seek the principle of loss and gain, it has to be  

on a similar and same plane having nexus, inter se,  

1

Page 12 between them and not to which there is no semblance  

of   any   correlation.   The   insured   (deceased)  

contributes his own money for which he receives the  

amount which has no correlation to the compensation  

computed   as   against   the   tortfeasor   for   his  

negligence   on   account   of   the   accident.   As  

aforesaid,   the   amount   receivable   as   compensation  

under the Act is on account of the injury or death  

without   making   any   contribution   towards   it,   then 

how  can  the  fruits  of an amount  received  through  

contributions of the insured be deducted out of the  

amount receivable under the Motor Vehicles Act. The  

amount   under   this   Act   he   receives   without   any 

contribution.   As   we   have   said,   the   compensation 

payable under the Motor Vehicles Act is statutory  

while   the   amount   receivable   under   the   life  

insurance policy is contractual.”

20.The second issue is “whether the salary receivable  

by   the   claimant   on   compassionate   appointment   comes  

within the periphery of the Motor Vehicles Act to be  

termed as “Pecuniary Advantage” liable for deduction.”

  “Compassionate   appointment”   can   be   one   of   the 

conditions of service of an employee, if a scheme to  

that effect is framed by the employer.   In case, the  

employee dies in harness i.e. while in service leaving  

behind the dependents, one of the dependents may request  

for compassionate appointment to maintain the family of  

the deceased employee dies in harness.   This cannot be  

stated to be an advantage receivable by the heirs on  

account of one’s death and have no correlation with the  

amount receivable under a statute occasioned on account  

of accidental death.  Compassionate appointment may have  

1

Page 13 nexus with the death of an employee while in service but  

it is not necessary that it should have a correlation  

with the accidental death.  An  employee dies in harness  

even in normal course, due to illness and to maintain  

the family of the deceased one of the dependents may be  

entitled for compassionate appointment but that cannot  

be termed as “Pecuniary Advantage” that comes under the  

periphery of Motor Vehicles Act and any amount received  

on   such   appointment   is   not   liable   for   deduction   for 

determination of compensation under the Motor Vehicles  

Act.  

21.The   third   issue   is   “whether   the   income   tax   is 

liable to be deducted for determination of compensation  

under the Motor Vehicles Act”

In the case of    Sarla Verma & Anr.(Supra),     this 

Court held “generally the actual income of the deceased  

less   income   tax   should   be   the   starting   point   for 

calculating the compensation. ” 

This Court further observed that “where the annual  

income is in taxable range,   the word “actual salary”  

should be read as “actual salary less tax”.  Therefore,  

it is clear that if the annual income comes within the  

taxable range income tax is required to be deducted for  

determination of the actual salary.  But while deducting  

1

Page 14 income­tax from salary, it is necessary to notice the  

nature of the income of the victim.   If the victim is  

receiving   income   chargeable   under   the   head   “salaries” 

one should keep in mind that under Section 192 (1) of  

the   Income­tax   Act,   1961   any   person   responsible   for 

paying any income chargeable under the head “salaries”  

shall   at   the   time   of   payment,   deduct   income­tax   on 

estimated income of the employee from   “salaries” for  

that financial year.   Such deduction is commonly known  

as tax deducted at source (‘TDS’ for short).  When the  

employer   fails   in   default   to   deduct   the   TDS   from 

employee salary, as it is his duty to deduct the TDS,  

then the penalty for non­deduction of TDS is prescribed  

under Section 201(1A) of the Income­tax Act, 1961.

Therefore, in case the income of the victim is only  

from   “salary”,   the   presumption   would   be   that   the  

employer under Section 192 (1) of the Income­tax Act,  

1961 has deducted the tax at source from the employee’s  

salary.  In case if an objection is raised by any party,  

the objector is required to prove by producing evidence  

such   as   LPC   to   suggest   that   the   employer   failed   to 

deduct the TDS from the salary of the employee.  

1

Page 15 However, there can be cases where the victim is not a salaried person

i.e. his income is from sources other than salary, and the annual income falls

within taxable range, in such cases, if any objection as to deduction of tax is

made by a party then the claimant is required to prove that the victim has

already paid income tax and no further tax has to be deducted from the

income.

22.In   the   present   case,   none   of   the   respondents  

brought to the notice of the Court that the income­tax  

payable by the deceased Sajjan Singh was not deducted at  

source   by   the   employer­   State   Government.       No   such 

statement was made by Ram Avtar Parikh, PW­2 an employee  

of Public Works Department of the State Government who  

placed   on   record   the   Last   Pay   Certificate   and   the 

Service Book of the deceased.  The Tribunal or the High  

Court on perusal of the Last Pay Certificate, have not  

noticed that the income­tax on the estimated income of  

the employee was not deducted from the salary of the  

employee during the said month or Financial Year.   In  

absence of such evidence, it is presumed that the salary  

paid   to   the   deceased   Sajjan   Singh   as   per   Last   Pay 

Certificate   was   paid   in   accordance   with   law   i.e.   by 

deducting the income­tax on the estimated income of the  

deceased Sajjan Singh for that month or the Financial  

1

Page 16 Year.     The   appellants   have   specifically   stated   that  

Assessment Year applicable in the instant case is 1997­

98 and not 1996­97 as   held by the High Court.   They  

have also taken specific plea that for the Assessment  

Year   1997­98   the   rate   of   tax   on   income   more   than 

40,000/­ and upto Rs.60,000/­ was 15% and not 20% as  

held by the High Court.  The aforesaid fact has not been  

disputed by the respondents.  

23.In view of the finding as recorded above and the  

provisions of the Income­tax Act, 1961, as discussed, we  

hold that the High Court was wrong in deducting 20% from  

the   salary   of   the   deceased   towards   income­tax,   for  

calculating   the   compensation.     As   per   law,   the  

presumption   will   be   that   employer­State   Government   at 

the time of payment of salary deducted income­tax on the  

estimated   income   of   the   deceased   employee   from   the  

salary and in absence of any evidence, we hold that the  

salary   as   shown   in   the   Last   Pay   Certificate   at  

Rs.8,920/­ should be accepted which if rounded off comes  

to Rs.9,000/­ for calculating the compensation payable  

to the dependent(s).  

24.The   fourth   issue   is   “whether   the   compensation  

awarded to the appellants is just and proper.”

1

Page 17 For determination of this issue, it is required to  

determine  the   percentage   of  increase   in  income   to  be 

made towards prospects of advancement in future career  

and revision of pay.  In  General Manager, Kerala State  

Road Transport Corporation, Trivandrum v. Susamma Thomas  

(1994) 2 SCC 176  this Court noticed the age and income  

of the deceased for determination of future prospects of  

advancement   in   life   and   career.     The   Court   held   as 

follows:

“19. In the present case the deceased was 39 years  

of age. His income was Rs 1032 per month. Of course,  

the   future   prospects   of   advancement   in   life   and 

career should also be sounded in terms of money to  

augment  the  multiplicand.  While  the  chance  of  the  

multiplier is determined by two factors, namely, the  

rate of interest appropriate to a stable economy and  

the age of the deceased or of the claimant whichever  

is higher, the ascertainment of the multiplicand is  

a more difficult exercise. Indeed, many factors have  

to   be   put   into   the   scales   to   evaluate   the  

contingencies   of   the   future.   All   contingencies   of 

the   future   need   not   necessarily   be   baneful.   The 

deceased   person   in   this   case   had   a   more   or   less 

stable job. It will not be inappropriate to take a  

reasonably   liberal   view   of   the   prospects   of   the 

future and in estimating the gross income it will be  

unreasonable to estimate the loss of dependency on  

the present actual income of Rs 1032 per month. We  

think, having regard to the prospects of advancement  

in   the   future   career,   respecting   which   there   is 

evidence   on   record,   we   will   not   be   in   error   in 

making   a   higher   estimate   of   monthly   income   at   Rs 

2000 as the gross income.” 

25.In   New India Assurance Co.Ltd. v. Gopali & ors.  

reported in AIR 2012 SC 3381 this Court noticed that the  

1

Page 18 High Court determined the compensation by granting 100%  

increase in the income of the deceased.   Taking into  

consideration the fact that in the normal course, the  

deceased would have served for 22 years and during that  

period   his   salary   would   have   certainly   doubled,   this 

Court, upheld the judgment of the High Court. 

26.In  K.R.   Madhusudhan   v.   Administrative   Officer  

(2011)   4   SCC  this   Court   observed   that   there   can   be 

departure from the rule of thumb and held as under:­

“10.  The  present   case  stands   on  different   factual 

basis   where   there   is   clear   and   incontrovertible  

evidence   on record  that  the  deceased   was  entitled  

and in fact bound to get a raise in income in the  

future, a fact which was corroborated by evidence on  

record. Thus, we are of the view that the present  

case   comes   within   the   “exceptional   circumstances”  

and not within the purview of the rule of thumb laid  

down   by Sarla  Verma1   judgment.  Hence,  even  though  

the deceased was above 50 years of age, he shall be  

entitled   to   increase   in   income   due   to   future  

prospects.”

27.Recently   in  Santosh   Devi   v.   National   Insurance 

Company Ltd.  reported in  (2012) 6 SCC 421   this Court 

found   it   difficult   to   find   any   rationale   for   the 

observation   made   in   paragraph   24   of   the   judgment   in 

Sarla Verma’s case and observed as follows:

“14.  We find it extremely difficult to fathom any  

rationale for the observation made in para 24 of the  

judgment   in   Sarla   Verma   case2   that   where   the  

deceased was self­employed or was on a fixed salary  

without   provision   for   annual   increment,   etc.,   the 

1

Page 19 courts will usually take only the actual income at  

the  time   of death  and  a departure  from  this  rule  

should be made only in rare and exceptional cases  

involving   special   circumstances.   In   our   view,   it 

will   be   na

ïve   to   say   that   the   wages   or   total

emoluments/income of a person who is self­employed  

or   who   is   employed   on   a   fixed   salary   without 

provision for annual increment, etc., would remain  

the same throughout his life.

15. The rise in the cost of living affects everyone  

across the board. It does not make any distinction  

between   rich   and   poor.   As   a   matter   of   fact,   the 

effect of rise in prices which directly impacts the  

cost of living is minimal on the rich and maximum on  

those   who   are   self­employed   or   who   get   fixed  

income/emoluments.   They   are   the   worst   affected  

people.   Therefore,   they   put   in   extra   efforts   to 

generate additional income necessary for sustaining  

their families.

18. Therefore, we do not think that while making the  

observations in the last three lines of para 24 of  

Sarla  Verma’s  judgment,  the  Court  had  intended  to  

lay   down   an   absolute   rule   that   there   will   be   no 

addition   in   the   income   of   a   person   who   is   self­

employed   or   who   is   paid   fixed   wages.   Rather,   it 

would   be   reasonable   to   say   that   a   person   who   is 

self­employed or is engaged on fixed wages will also  

get 30% increase in his total income over a period  

of   time   and   if   he/she   becomes   the   victim   of   an 

accident   then   the   same   formula   deserves   to   be  

applied for calculating the amount of compensation.”

28.In the case of  New India Assurance Co.Ltd.(Supra),  

this Court noticed that the High Court determined the  

compensation by granting 100% increase in the income of  

the deceased.   Taking into consideration the fact that  

in the normal course, the deceased would have served for  

22 years and during that period his salary would have  

1

Page 20 certainly doubled, upheld the judgment of the High Court  

with following observation:

“20.We are also of the view that the High Court  

was  justified  in      determining the amount  

of  compensation  by  granting     100%    increase  

in             the income of the deceased. In the  

normal  course,  the   deceased    would      have  

served for 22 years and during that period his  

salary would  have   certainly doubled because  

the employer was paying 20% of his salary as  

bonus per year.”

29.Admittedly,  the  date   of birth  of  deceased  Sajjan  

Singh being 1

st

 February, 1968;  the submission that he  

would have continued in service upto 1

st

 February, 2026, 

if 58 years is the age of retirement or 1

st

  February, 

2028, if 60 years is the age of retirement is accepted.  

He was only 28 years 7 

½ month old at the time of death.

In   normal   course,   he   would   have   served   the   State 

Government minimum for about 30 years.   Even if we do  

not   take   into   consideration   the   future   prospect   of 

promotion which the deceased was otherwise entitled and  

the actual pay revisions taken effect from 1

st

  January, 

1996 and 1

st

 January, 2006, it cannot be denied that the  

pay   of   the   deceased   would   have   doubled   if   he   would 

continued   in   services   of   the   State   till   the   date   of 

retirement.   Hence, this was a fit case in which 100%  

increase   in  the   future   income  of   the  deceased   should 

2

Page 21 have been allowed by the Tribunal and the High Court,  

which they failed to do.  

30.Having regard to the facts and evidence on record,  

we estimate the monthly income of the deceased Sajjan  

Singh at Rs.9,000 x 2 = Rs.18,000/­ per month.   From  

this his personal living expenses, which should be 1/3

rd

, 

there   being   three   dependents   has   to   be   deducted.  

Thereby, the ‘actual salary’ will come to Rs.18,000 –  

Rs.6,000/­  = Rs.12,000/­ per month or Rs.12,000 x 12  

=1,44,000/­ per annum.  As the deceased was 28 

½ years

old   at   the   time   of   death   the   multiplier   of   17   is 

applied,   which   is   appropriate   to   the   age   of   the  

deceased.  The normal compensation would then work out  

to be Rs.1,44,000/­ x 17 =Rs.24,48,000/­ to which we add  

the usual award for loss of consortium and loss of the  

estate   by   providing   a   conventional   sum   of   Rs.  

1,00,000/­; loss of love and affection for the daughter  

Rs.2,00,000/­, loss of love and affection for the widow  

and the mother at Rs.1,00,000/­ each i.e. Rs.2,00,000/­  

and funeral expenses of Rs.25,000/­.  

31.Thus,   according   to   us,   in   all   a   sum   of  

Rs.29,73,000/­  would   be   a   fair,   just   and   reasonable 

award in the circumstances of this case.  

2

Page 22 32.The rate of interest of 12% is allowed from the  

date   of   the   petition   filed   before   the   Tribunal   till 

payment is made.  

33.Respondent No.3 is directed to pay the total award  

with interest minus the amount (if already paid) within  

three months.  The appellant No.2­daughter who was aged  

about 2 years at the time of accident of the deceased  

has already attained majority; money may be required for  

her education and marriage.   In the circumstances, we  

direct respondent No.3 to deposit 25% of the due amount  

in the account of appellant no.1­the wife.  Out of the  

rest   75%     of   the   due   amount,   35%   of   the   amount   be 

invested in a Nationalized Bank by fixed deposit for a  

period of one year in the name of the daughter­appellant  

No.2.  Out of the rest 40% of the due amount, 20% each  

be invested in a Nationalized Bank by fixed deposit for  

a period of one year in the name of the appellant Nos. 1  

and 3, the wife and the mother respectively. 

34.The award passed by the Tribunal dated 21

st

  June, 

2003   and   the   judgment   dated   29

th

  July,   2011   of   the 

Rajasthan High Court stand modified to the extent above.  

The appeal is allowed with the aforesaid observation and  

direction.  No separate order as to costs.

2

Page 23 ………..………………………………………..J.

       (G.S. SINGHVI)

………………………………………………….J.

           (SUDHANSU JYOTI MUKHOPADHAYA)

NEW DELHI,

MAY 03, 2013.

2