Inclusion Or Exclusion Of Allowances In Deceased’s Salary To Be Determined By MACT On Facts & Extent Of Dependency: Supreme Court
The Supreme Court has ruled that while determining whether the allowances form a part of the salary or not, the Motor Vehicle Accident Claims Tribunal by looking into the facts of each case and by considering the extent of dependency of the claimants on the salary of the deceased including the allowances, has to determine whether these allowances should be excluded from determination of the income of the deceased.
The appellants before the Apex Court were the claimants(wife and children of deceased) in a petition filed under Section 166 of the Motor Vehicles Act and they sought enhancement of compensation.
The Division Bench of Justice Sudhanshu Dhulia and Aravind Kumar said, “Further, while determining whether the allowances form a part of the salary or not, the Tribunal by looking into the facts of each case and by considering the extent of dependency of the claimants on the salary of the deceased including the allowances, have to determine whether these allowances should be excluded from determination of the income of the deceased. If the answer of the Tribunal is in affirmative, then the allowances may be excluded for determination of loss of dependency. If the Tribunal answers the above point in negative, then the Tribunal has to include the allowances for computation of income of the deceased, thus determining the loss of dependency.”
Aor Fuzail Ahmad Ayyubi represented the Appellant while Advocate Summan Congratulations represented the Respondent.
Factual Background
The incident dates back to the year 2009 when the deceased met with an accident while proceeding to his office located in Gurgaon. A car allegedly being driven in a rash and negligent manner by the first Respondent dashed against the deceased causing severe injuries because of which the deceased succumbed at the spot. The claimants approached the Motor Vehicle Accident Claims Tribunal (Tribunal) seeking compensation of Rs. 25,00,000. The Tribunal awarded compensation of Rs. 2,54,720 with interest. In appeal, the High Court enhanced the compensation from Rs 2,54,720 to Rs 7,23,680 with interest. The claimants, not being satisfied with the award of the High Court, approached the Apex Court.
Reasoning
The Bench noted that it was stated in the salary slip that the deceased was earning Rs. 6,500 p.m. However, the Tribuna,l on a hyper technicality, namely a certain discrepancy in Form 6 and Form 6A, considered the basic salary of the deceased as Rs. 3,665 p.m. after excluding the HRA and other allowances. On this aspect, the Bench said, “This Court has consistently held in case of the allowances which are included in the component of salary of the deceased, Tribunal has to take into consideration these allowances as they were used for supporting the family. The claimants have to show that these allowances were regularly received and used for the family’s benefit.”
The Bench noted that after the accident, the entire burden of taking care of two minor children and herself fell on the first Appellant. “Therefore in view of the changing economic situation of the family after the death of the deceased, we are of the opinion that income which the deceased was earning at the time of the accident was Rs. 6,500/- p.m and same ought to have been taken into consideration.”
The Bench awarded a sum of Rs 12,48,000 under the head of loss of dependency. The Bench further held that the claimants were entitled to a sum of Rs. 18,150 each under the heads of loss of estate and funeral expenses. Further, the Bench also awarded a sum of Rs 48,400 to the first Appellant under the head of spousal consortium and Rs 48,400 each to the children under the head of parental consortium as per the law laid down in Magma General Insurance Company Limited v. Nanu Ram Alias Chuhru Ram and Others (2018).
The Bench also made it clear that the Respondents would be jointly and severally liable to pay the aforesaid compensation to the claimants. “However, considering the fact that this Appeal is preferred after a period of 1855 days delay and further there is a delay of 75 days in refiling, the Respondents are not liable to pay interest for this delay period as ordered while disposing the application for condonation of delay.”
“Respondent No.3 is hereby directed to deposit a sum of Rs. 14,29,500/- with interest @7% p.a. from the date of the filing of the petition till deposit, excluding the period of delay, before the jurisdictional Tribunal within a period of 8 weeks from the date of this judgment”, it ordered.
Cause Title: Kavita Devi v. Sunil Kumar & Anr. (Neutral Citation: 2025 INSC 938)
Appearance
Appellant: Aor Fuzail Ahmad Ayyubi
Respondent: Advocate the Begae Summan, OR Thouset Chawla, Advocates Usha Pan Pan Pan Pet