MALARVIZHI & ORS. versus UNITED INDIA INSURANCE COMPANY LIMITED & ANR.

Citation: [2019] 16 S.C.R. 1086 · Decided: 09-12-2019 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Case Partly allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2019] 16 S.C.R.
MALARVIZHI & ORS.
v.
UNITED INDIA INSURANCE COMPANY LIMITED & ANR.
(Civil Appeal Nos. 9196-97 of 2019)
DECEMBER 09, 2019
[DR. DHANANJAYA Y. CHANDRACHUD
AND HRISHIKESH ROY, JJ.]
Motor Vehicles Act, 1988 – s.166 – Person died in motor
accident – Survived by the appellants (his wife and four
daughters) – Appellants contended that the deceased derived
income from many sources including business, agricultural land
admeasuring 36.76 acres (sold in recovery proceedings after his
death) and was also wholesale dealer of cement and owned wine
shops – Sought compensation in the amount of Rs.99,90,000/- –
Tribunal allowed the claim in the amount of Rs.59,04,000/- with
interest @ 7.5% p.a. – High Court reduced the compensation to
Rs.33,55,000/- – Held: Tribunal proceeded to determine the
agricultural income arising from 36.76 acres of land on the basis
of two judgments of the High Court, arrived at two different figures
and determined the agricultural income on an average of the two
amounts – It superimposed a possible value of income from
agricultural land despite clear indication in the income tax returns
of the income from agricultural land – Such  method not sustainable
in law – Determination must proceed on the basis of the income
tax return, where available, a statutory document on which reliance
may be placed to determine the annual income of the deceased –
To the benefit of the appellants, the High Court proceeded on the
basis of the income tax return for the assessment year 1997-98 and
not 1999-2000 & 2000-01 which reflected reduction in the annual
income of the deceased – Tax return indicates annual income of
Rs.2,11,131/- in the relevant assessment year – In the peculiar
circumstances of the case, Rs. 1,04,987/-, payment for prepaid
license fee to the Tamil Nadu Government having been paid
upfront and for a future period is added to the annual income of
the deceased – Thus, the net annual income of the deceased is
Rs.3,16,118/- – In accordance with Sarla Verma case, the multiplier
applied is 13, appellant being 49 at the time of accident– Loss of
   [2019] 16 S.C.R. 1086
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dependency is at Rs.3,16,118 X 13= Rs.41,09,534/- – In
accordance with Pranay Sethi case, Rs.15,000, 15,000 and 40,000
added for funeral expenses, loss of estate and loss of consortium
respectively – Rs.50,000/- for loss of love and affection – Thus,
total compensation payable to the appellants is Rs.42,29,534/- with
interest @ 9% p.a. from the date of filing of the application till
the date of its payment of the appellants.
Partly allowing the appeals, the Court
HELD: 1.1 The method adopted by the Tribunal is not
sustainable in law. The tax return indicates an annual income of
Rs 2,11,131 in the relevant assessment year. The determination
must proceed on the basis of the income tax return, where
available. The income tax return is a statutory document on
which reliance may be placed to determine the annual income
of the deceased. To the benefit of the appellants, the High Court
has proceeded on the basis of the income tax return for the
assessment year 1997-1998 and not 1999-2000 and 2000-2001
which reflected a reduction in the annual income of the deceased.
Depreciation is the deduction allowed for the decline in the real
value of tangible or intangible assets over its useful life. Its value
varies over time and cannot amount to tangible income for the
purposes of computing annual income in a claim before the
MACT. An annual amount of Rs.1,04,987 is reflected as payment
for a prepaid license fee to the Tamil Nadu Government. In the
peculiar circumstances of the case, this amount, having been paid
upfront and for a future period is to be added to the annual
income of the deceased. Thus, the net annual income of the
deceased is: Rs 2,11,131 + 1,04,987 = Rs 3,16,118. [Paras 10,
12 and 13] [1091-G; 1092-A-C; 1093-B-D]
1.2 The determination of the amount payable to the
appellants is as follows: (i) The deceased was self-employed and
aged 49 at the time of the accident. In accordance with the
Constitution Bench judgment of this Court in National Insurance
Company Limited v Pranay Sethi, 25% of the annual income is
to be added for future prospects. 25% of Rs 3,16,118 = 79,029.5.
Annual income, accounting for future prospects, is Rs 3,16,118
+ 79,029.5 = Rs 3,95,147.5; and (ii) In accordance with
paragraph 30 of the decision of this Court in Sarla Verma v Delhi
MALARVIZHI v

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