Salary Assessment for Deceased in Motor Accident Claims Tribunal Awards—Clarification on Inclusion of Allowances, Application of Future Prospects, and Correct Multiplier. High Court Decision Follows, Applies, and Clarifies Supreme Court Law; Serves as Binding Authority for Subordinate Courts
Summary
| Category | Data |
|---|---|
| Case Name | FAO/4050/2010 of KRISHNA DEVI AND ORS. Vs SATBIR AND ANR. |
| CNR | PHHC010885532010 |
| Date of Registration | 20-07-2010 |
| Decision Date | 31-10-2025 |
| Disposal Nature | ALLOWED |
| Judgment Author | MRS. JUSTICE SUDEEPTI SHARMA |
| Court | High Court of Punjab and Haryana |
| Precedent Value | Binding on lower courts within Punjab & Haryana jurisdiction |
| Overrules / Affirms |
|
| Type of Law | Motor Accident Compensation – Section 166 MV Act |
| Questions of Law |
|
| Ratio Decidendi |
The actual monthly salary for compensation under Section 166 MV Act must include all allowances and perquisites, not merely “take home” pay. The Tribunal erred by excluding such components; this is contrary to law settled by the Supreme Court, including Meenakshi v. Oriental Insurance Company. Future prospects must be applied to the resultant gross salary (inclusive of all allowances). Deductions towards personal and living expenses, and the selection of multiplier, must strictly follow the ratio and tabular multipliers in Sarla Verma and Pranay Sethi. Conventional heads for loss of estate, consortium, and funeral expenses must match the escalated figures mandated by the Apex Court. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon by the Court | The correct computation of compensation must include all earning components, future prospects, standardized deductions, and updated conventional heads as per binding Supreme Court authority. |
| Facts as Summarised by the Court | The claimants sought enhancement of compensation for death of Anand Kumar (age fixed as 40) in a motor accident (09.01.2008). Tribunal had awarded compensation based on net take-home salary, without adding future prospects, and with incorrect multiplier and conventional heads. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All Motor Accident Claims Tribunals and subordinate courts within the jurisdiction of Punjab and Haryana High Court |
| Persuasive For | Other High Courts and claims tribunals across India, insofar as it faithfully applies and clarifies Supreme Court precedent |
| Follows |
|
What’s New / What Lawyers Should Note
- Reinforces that “actual salary” for compensation calculations must include all allowances and perquisites, not just net take-home pay.
- Explicitly applies Supreme Court’s direction in Meenakshi v. Oriental Insurance Company (2024) that future prospects are to be added to the total gross salary (including HRA, benefits, etc.).
- Clarifies multiplier must be strictly derived from deceased’s age as per post mortem report (Sunita v. Vinod Singh, 2025).
- Awards on conventional heads (loss of estate, consortium, funeral expenses) must use escalated figures (per Pranay Sethi and Magma General Insurance).
- Interest on enhanced amount ordered at 9% p.a., following Supreme Court guidance.
Summary of Legal Reasoning
- The High Court first outlined the law as laid down by the Supreme Court in Sarla Verma, especially on dependency deduction and application of the multiplier based on age.
- Cited Pranay Sethi for the necessity to add future prospects and for the mandatory figures on conventional heads and escalation timeline for those heads.
- Relied on Magma General Insurance to clarify compensation for consortium includes parental/filial consortium.
- Found that the Tribunal erred in taking only net (take-home) salary and not adding perquisites; Supreme Court in Meenakshi v. Oriental Insurance has held all salary components including HRA, benefit plans, etc. must be included before applying future prospects.
- Age fixed at 40 on basis of post mortem report, in accordance with Sunita v. Vinod Singh.
- Multiplier corrected from 13 to 15, loss of estate, funeral expenses, and consortium recalculated as per Apex Court’s escalated standard.
- Interest rate on enhanced compensation set at 9% p.a. as per Dara Singh @ Dhara Banjara and R. Valli.
Arguments by the Parties
Petitioner (Appellants):
- Compensation assessed by the Tribunal is too low and needs to be enhanced under latest law.
- Tribunal erred in assessing salary and failed to include future prospects.
- Multiplier applied was incorrect.
- Compensation for conventional heads (funeral expenses, consortium, loss of estate) was inadequate.
Respondent (Insurance Company):
- Tribunal correctly assessed compensation; enhancement not warranted.
- Multiplier and calculations were correctly applied.
Factual Background
The claim relates to the death of Anand Kumar in a motor accident on 09.01.2008. Claimants sought enhanced compensation under Section 166 of the Motor Vehicles Act. The Tribunal awarded Rs. 7,15,850/- (with 7.5% interest), but only considered net take-home salary, excluded future prospects, and adopted a lower multiplier. Appeal filed by claimants issues related solely to quantum.
Statutory Analysis
- Section 166 MV Act: Claim for compensation arising from motor vehicle accident.
- Interpretation and application of Section 168 (quantum determination).
- Application of Supreme Court-mandated principles for calculation: salary components, future prospects, dependency deductions, appropriate multiplier, and conventional heads.
- Reliance on Section 168 read with judicial precedents for uniform computation.
Alert Indicators
- ✔ Precedent Followed – The High Court reaffirms and applies existing Supreme Court authority on all points of salary, future prospects, multiplier, and conventional heads; does not break with any established precedent.