The Supreme Court of India, in a significant judgment concerning motor accident claims, has ruled that an unmarried daughter is to be treated as a dependant of the deceased for calculating compensation, irrespective of her employment status. A bench comprising Justice N.V. Anjaria and Justice Atul S. Chandurkar also corrected the method for calculating income tax deductions and the grant of consortium, substantially enhancing the compensation awarded to the family of a doctor who died in a road accident.
The Court partially allowed an appeal filed by the family of the deceased, modifying the judgment of the Rajasthan High Court and increasing the total compensation from ₹55,27,800 to ₹66,16,605.
Background of the Case
The case originated from a motor accident that occurred on September 5, 2010, involving Dr. Ashok Kumar Jain, a 59-year-old government Medical Officer. Dr. Jain was travelling in a car with his wife, Gunmala Jain, and daughter, Ritu Jain, when a negligently driven tractor collided with their vehicle near Mandola Phatak in Rajasthan. Dr. Jain sustained grievous injuries and later succumbed to them on September 30, 2010, during treatment.
The Motor Accidents Claim Tribunal (MACT), Bara, had initially awarded compensation of ₹50,51,000 to the claimants, who included the deceased’s wife and three children. On appeal, the High Court of Judicature of Rajasthan at Jaipur enhanced this amount to ₹55,27,800.
Appellants’ Arguments
The claimants approached the Supreme Court, assailing the High Court’s judgment on three primary grounds:
- The High Court had erroneously deducted income tax at a flat rate of 20% from the deceased’s income, instead of applying the income tax slabs prevalent at the time of the accident.
- The unmarried daughter of the deceased was not treated as a dependant for the purpose of calculating the dependency, leading to a higher deduction for personal expenses.
- The amount awarded towards consortium was a lumpsum and should have been awarded separately to each of the four claimants.
The Supreme Court’s Analysis and Findings
The Supreme Court meticulously examined the errors in the High Court’s calculations and enunciated the correct legal principles to be applied.
1. On Income Tax Deduction:
The Court observed that the deceased had a monthly income of ₹56,509, amounting to an annual income of ₹6,78,000. It held that the High Court’s decision to deduct tax at a flat rate was incorrect. The bench stated that the tax must be calculated according to the specific tax slabs applicable for the financial year 2010-11. Applying these slabs, the correct tax liability was determined to be ₹69,600, significantly lower than the amount deducted by the lower courts.
2. On Unmarried Daughter as a Dependant:
The Supreme Court unequivocally held that the unmarried daughter must be considered a dependant. It rejected the notion that her employment status would disqualify her. The judgment noted, “It is well settled that an unmarried daughter of the deceased at the time of accident is to be treated as dependent on the deceased. Merely because an unmarried daughter was engaged in some kind of job, it would not drive her out of the purview as dependent. The expenses towards education, marriage and other living expenses are expected to be borne by the father.”
This finding increased the number of dependants from three, as considered by the High Court, to four. Consequently, as per the law laid down in Sarla Verma vs. Delhi Transport Corporation, the deduction towards the deceased’s personal expenses was corrected from one-third (1/3) to one-fourth (1/4) of his income.
3. On Consortium, Loss of Estate, and Funeral Expenses:
The Court found that the High Court had erred by awarding a consolidated sum of ₹40,000 for consortium to all claimants. Citing its previous judgments in Magma General Insurance Co. Ltd. vs. Nanu Ram and National Insurance Company Ltd. vs. Pranay Sethi, the bench explained that “consortium is a compendious term which encompasses spousal consortium, parental consortium as well as filial consortium.”
It ruled that “Each of the dependents will be entitled to separate amount of ₹40,000/- towards and under the head of consortium.” Furthermore, applying the rule from Pranay Sethi for a 10% increase every three years, the Court awarded ₹48,400 to each of the four claimants.
The bench also noted that the High Court had failed to award any compensation under the head ‘Loss of Estate’ and had not applied the 10% increase to funeral expenses. The Supreme Court rectified this by awarding ₹18,150 for Loss of Estate and ₹18,150 for Funeral Expenses.
Final Decision
Based on these corrections, the Supreme Court recalculated the total compensation payable to the appellants to be ₹66,16,605. It directed the respondent Insurance Company to deposit the differential amount of ₹10,88,805, along with interest as awarded by the Tribunal, within eight weeks.
