LexMEENAKSHI versus THE ORIENTAL INSURANCE CO. LTD.
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[2024] 7 S.C.R. 1433 : 2024 INSC 573 Meenakshi v. The Oriental Insurance Co. Ltd. (Civil Appeal No. 8473 of 2024) 23 July 2024 [Hima Kohli and Sandeep Mehta, JJ.] Issue for Consideration Whether perquisites/allowances in the nature of house rent allowance, flexible benefit plan and company contribution to provident fund can be excluded from the basic salary of the deceased while applying the principle of rise in income by future prospects for assessing compensation under the Motor Vehicles Act, 1988. Headnotes† Motor Vehicles Act, 1988 – Claim for compensation – Perquisites/allowances in the nature of house rent, flexible benefit plan and company contribution to provident fund cannot be excluded from the basic salary for the purpose of applying future prospects – High Court erred in excluding them – High Court justified in deducting Income Tax from the gross salary of the deceased for calculating his gross income – Appeal partly allowed: Held: Claim for compensation by deceased’s mother – High Court vide impugned judgment reduced compensation amount awarded by Accident Claims Tribunal – It excluded the components of house rent allowance, flexible benefit plan and contribution to provident fund etc. from the gross income for the purpose of applying future prospects – It also deducted income tax from the gross salary – Appeal partly allowed – High Court erred in omitting to add components of house rent allowance, flexible benefit plan and company contribution to provident fund to the basic salary of the deceased – However, High Court justified in deducting income tax from the gross salary while calculating the gross income – Compensation amount re-assessed. [Paras 12-15] 1434 [2024] 7 S.C.R. Digital Supreme Court Reports Case Law Cited Raghuvir Singh Matolya and Ors. v. Hari Sigh Malviya and Ors. [2009] 5 SCR 379 : (2009) 15 SCC 363; National Insurance Company Ltd. v. Nalini and Ors., Special Leave to Appeal (C) No. 4230/2019 – relied on. List of Acts Motor Vehicles Act, 1988. List of Keywords Claim; Compensation; MACT; Arrear of rent; Loss of dependency; Principle of rise in income by future prospects; House rent allowance; Flexible benefit plan; Company contribution to provident fund; Income tax deduction; Basic salary of the deceased. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8473 of 2024 From the Judgment and Order dated 02.08.2017 of the High Court of Karnataka at Kalaburagi in MFA No. 200311 of 2016 Appearances for Parties C.M. Angadi, Rameshwar Prasad Goyal, Advs. for the Appellant. Arvind Gupta, Anil Kumar Sahu, Mohit Bidhuri, Mrs. Suman Sharma, Kanav Bhardwaj, Sunil Kumar Roy, Advs. for the Respondent. Judgment / Order of the Supreme Court Order 1. Delay condoned. 2. Leave granted. 3. This appeal arises from the judgment dated 2nd August, 2017 rendered by the learned Division Bench of the High Court of Karnataka, Kalaburagi Bench in M.F.A. No. 200311/2016 (MV) whereby, while partly accepting the appeal preferred by the respondent No. 1- Insurance Company,1 the High Court reduced the compensation 1 Respondent no. 2 was deleted vide order dated 28th August, 2023 by the Hon’ble Judge-in-Chamber [2024] 7 S.C.R. 1435 Meenakshi v. The Oriental Insurance Co. Ltd. awarded to the claimant i.e., Appellant herein vide award dated 25th November, 2015 passed by the Principal Senior Civil Judge and MACT2 at Kalaburagi in a claim petition3 filed by the appellant herein. The Accident Claims Tribunal had awarded compensation to the tune of ₹ 1,04,01,000/- with interest @ 6% per annum to the claimant i.e., the appellant herein being the mother of Shri Suryakanth who expired in a road accident on 29th August, 2013. The Accident Claims Tribunal, assessed and quantified the compensation in the following manner:- “16. Loss of Dependency: The petitioner is the mother of deceased Suryakanth. Admittedly, the age of the deceased is shown as 26 years in the post mortem report as per Exh.P13, that is taken into account. Regarding the income of the deceased, PW.1 has stated that the deceased Suryakanth was doing as service consultant and drawing monthly gross salary of Rs.56,935/- per month and to prove the said fact she has produced Exh.P15 to Exh.P25 which are appointment letter, Salary review letter, Salary certificates, certificate issued by CISCO, PAN Card, Diploma Certificate, Income Tax Returns and Form No.16 respectively, but as per Exh.P17
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