This Court in a Five Judge Bench decision in National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, clearly held that in case the deceased is self­employed and below the age of 40, 40% addition would be made to their income as future prospects. In the present case, the deceased was self­employed and was 37 years old, therefore, warranting the addition of 40% towards future prospects. Moreover, Pranay Sethi (supra), affirming the ratio in Sarla Verma (supra), held that the deduction towards personal and living expenses for a person such as the deceased who was married with two dependents, to be one­third (1/3rd). Since the High Court in the impugned judgment deducted 50% the same merits interference by this Court. 11. Therefore, in light of the above, the compensation as awarded to the Appellants by the High Court is modified to the extent of deduction towards personal and living expenses (determined to be one­third (1/3rd)) and 40% addition towards future prospects. The annual income of the deceased (Mrs. Manisha Sharma) was Rs. 2,55,349. After deducting personal and living expenses and adding future prospects, the annual 5 income is determined at Rs. 2,38,326/­. The multiplier of 15 is appropriate, considering the age of the deceased. Accordingly, the total loss of dependency, is calculated to be Rs. 35,74,890/­. We do not find any reason to interfere with any other heads as determined by the High Court. 12. Hence, the total compensation is determined to be, Rs. 38,24,890/­ payable with interest of 9% per annum from the date of filing of the claim petition till realisation, set off against the part compensation already received, if any.

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

    CIVIL APPEAL NO. 1769 OF 2021

(ARISING OUT OF SLP (C) NO. 719 OF 2018)

RAHUL SHARMA & ANR. …APPELLANT(S)

VERSUS

NATIONAL INSURANCE COMPANY               …RESPONDENT(S)

LTD. & ORS.  

    J U D G M E N T

    N.V. RAMANA, CJI.,

1. Leave granted.

2. The appellants before us seek to impugn the judgment

dated 4th September, 2017, passed by the Delhi High Court in

MAC. App. No. 740/2016.

3. The  brief facts, necessary for  the adjudication  of this

appeal are as follows: on the intervening night of the 18th/19th

May, 2010, the vehicle in which parents of the Appellants were

1

Non­Reportable

travelling   rammed   into   a   truck,   near   Phagwara,   Punjab.

Resultantly, they succumbed to the injuries sustained in the

accident. The car was plying other relatives of the Appellants

and the deceased. Thereafter, F.I.R. no. 76/10, was registered

in PS Sadar Phagwara, Punjab under Sections 249, 304­A,

427 of the Indian Penal Code, 1860 in this regard. It may be

relevant   to   note   that   the   vehicle   was,   during   the   relevant

period,   insured   by   the   National   Insurance   Co.   Ltd.

(hereinafter, referred to as NIC), the Respondent No. 1 herein.

4. The   Appellants   instituted   a   claim   petition   before   the

Motor Accidents Claims Tribunal (hereinafter, “the MACT”),

under Sections 166 and 140 of the Motor Vehicles Act, 1988,

for grant of compensation for the death of their parents, which

were registered as cases numbered, MACT No. 349/2010 (with

respect to Mrs. Manisha Sharma) and MACT No. 350/2010

(with respect to Mr. Sunil Sharma), and were adjudicated vide

a common award dated 7th June, 2016.

5. The   present   appeal   pertains   to   the   claim   petition

preferred on the account of the death of the appellants mother.

2

The   appellants’   mother,   Mrs.   Manisha   Sharma,   was   aged

about 37 years and was a self­employed individual. 

6. The Tribunal, while adjudicating the claim, determined

the compensation to be Rs. 41,55,235. The Tribunal relied

upon the Income Tax Return of the deceased and concluded

that   her   annual   income   was   Rs.   2,55,349.   Based   on   the

dictum of this Court in  Sarla   Verma  v.  Delhi   Transport

Corporation, (2009) 6 SCC 121, 50% addition was included

towards future prospects and the multiplier was taken to be

15.   Since,   the   deceased   had   two   dependents,   1/3rd  of   the

deceased’s income was deducted on account of personal and

living   expenses.   The   non­pecuniary   compensation   was

calculated at Rs. 3,25,000. The NIC, being the insurer of the

vehicle,   was   held   liable   to   pay   the   compensation   of   Rs.

41,55,235 with an interest of 9% per annum from the date of

filing of the claim petition.

7. Aggrieved, the insurance company preferred an appeal

against the award of the MACT before the Delhi High Court,

which disposed of the appeal  vide  the impugned judgment

3

dated 4th  September, 2017. The High Court, in its common

judgement,   calculated   the   pecuniary   compensation   as   Rs.

19,16,000 and the non­pecuniary damages was calculated as

Rs.2,50,000, for a total compensation of Rs. 21,66,000/­, in

MAC. APP. 740/2016. While passing the aforesaid impugned

order,   the   High   Court   deducted   50%   of   income   towards

personal and living expenses. The High Court however, held

the deceased ineligible for the grant of future prospects as she

was self­employed.  

8.   Aggrieved by the impugned judgement, the Appellants

have preferred the present appeal, by way of Special Leave,

impugning only the compensation as modified in MAC. App.

No. 740/2016.

9. We have heard the counsel for the Appellants and the

counsel for the NIC, Respondent No. 1. The Respondents No. 2

and 3 have not tendered their appearances, despite service.

The   insurance   company   has   also   placed   on   record   their

written submissions, which have been perused.

4

10. This Court in a Five Judge Bench decision in National

Insurance  Co.  Ltd.  v.  Pranay  Sethi,  (2017)  16  SCC  680,

clearly held that in case the deceased is self­employed and

below the age of 40, 40% addition would be made to their

income as future prospects. In the present case, the deceased

was self­employed and was 37 years old, therefore, warranting

the   addition   of   40%   towards   future   prospects.   Moreover,

Pranay   Sethi  (supra), affirming the ratio in  Sarla   Verma

(supra), held that the deduction towards personal and living

expenses for a person such as the deceased who was married

with two dependents, to be one­third (1/3rd). Since the High

Court   in   the   impugned   judgment   deducted   50%   the   same

merits interference by this Court. 

11. Therefore,   in  light  of  the   above,  the   compensation  as

awarded to the Appellants by the High Court is modified to the

extent   of   deduction   towards   personal   and   living   expenses

(determined to be one­third (1/3rd)) and 40% addition towards

future prospects. The annual income of the deceased (Mrs.

Manisha Sharma) was Rs. 2,55,349. After deducting personal

and living expenses and adding future prospects, the annual

5

income is determined at Rs. 2,38,326/­. The multiplier of 15 is

appropriate, considering the age of the deceased. Accordingly,

the   total   loss   of   dependency,   is   calculated   to   be

Rs. 35,74,890/­. We do not find any reason to interfere with

any other heads as determined by the High Court.

12. Hence,   the   total   compensation   is   determined   to   be,

Rs. 38,24,890/­ payable with interest of 9% per annum from

the date of filing of the claim petition till realisation, set off

against the part compensation already received, if any.

6

13. This Civil Appeal is disposed of in the aforesaid terms.

..…..…….................CJI.

(N.V. RAMANA)

 …...…….................J.

(SURYA KANT)

       …..………............J.

       (ANIRUDDHA BOSE)

NEW DELHI;

MAY 07, 2021

7