NATIONAL INSURANCE COMPANY LTD. versus INDIRA SRIVASTAVA & ORS.

Citation: [2007] 13 S.C.R. 352 · Decided: 12-12-2007 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
NATIONAL INSURANCE COMPANY LTD. 
-T. 
'f 
v. 
INDIRA SR.IV ASTA VA & ORS. 
DECEMBER 12, 2007 
-:: 
B 
[S.B. SINHA AND HARJIT SINGH BEDI, JJ.] 
). 
' 
Motor Vehicles Act, 1988-s. l 68-Death of salaried employee-
Computation of total income of deceased-Determination of 'just 
c compensation '-Held: Total income of deceased-employee to be 
computed not only having regard to the pay packet he carried home 
at the end of the month but also other perks paid for benefit of his 
entire family contra-distinguishedfrom perks paid for his own benefit_:_ 
_...... 
Compensation to be determined on basis of total income so computed. 
D 
Words and Phrases-''just" and "income "-Meaning of 
-4· 
Connotation of the term 'income' for the purpose of determination 
of 'just compensation' envisaged under Section 168 of the Motor 
E Vehicles Act, 1988 is in question in the present appeal. 
On behalf of the appellant it was contended that for the purpose 
of computation of the amount of compensation what was material is the 
basic pay and not other allowances and that emphasis is to be laid on 
computation of damages based on net income and not gross income. 
A 
-:.:.:._ 
F 
Respondent, however, submitted that apart from the basic salary, 
contributions made by the employee should also be taken into 
consideration for calculation of the amount of compensation, inter alia, 
on the premise that the same would have become payable to him at a 
G future date as, for example, voluntary retirement, superannuation etc. 
which would be beneficial to the entire family. It was submitted that the 
contributions towards Provident Fund, Life Insurance Corporation, 
-+-
gratuity etc. are includible in the definition of income. 
H 
352 
NATIONAL INSURANCE COMPANY LTD. v. INDIRA 
353 
SRIVASTAVA 
-. 
Dismissing the appeal, the Court 
A 
'r 
HELD: 1.1. The term 'income' has different connotations for 
different purposes. A court oflaw, having regard to the change in societal 
~ 
conditions must consider the question not only having regard to pay 
packet the employee carries home atthe end of the month but also other B 
perks which are beneficial to the members of the entire family. 
. .I, 
[Para8] (357-F,G] 
1.2. If the dictionary meaning of the word 'income' is taken to its 
logical conclusion, it should include those benefits, either in terms of 
money or otherwise, which are taken into consideration for the purpose c 
of payment of income-tax or profession tax although some elements 
-
thereof may or may not be taxable or would have been otherwise 
taxable but for the exemption conferred thereupon under the statute. 
[Para 19] (364-F, G) 
-· -1-
D 
1.3 . The expression 'just' must also be given its logical meaning. 
Whereas it cannot be a bonanza or a source of profit but in considering 
as to what would be just and equitable, all facts and circumstances must 
be taken into consideration. [Para 23] [366-A-B] 
P. Ramanatha Aiyar's Advanced Law Lexicon (3rd Ed.), referred E 
to. 
2.1. S.168 of the Act uses the word 'just compensation' which should 
,.,,,,. '>-
be assigned a broad meaning. One cannot, in determining the issue 
involved in the matter, lose sight of the fact that the private sector F 
companies in place of introducing a pension scheme takes recourse to 
payment of contributory Provident Fund, Gratuity and other perks to 
attract the people who are efficient and hard working. Different offers 
made to an officer by the employer, same may be either for the benefit 
of the employee himself or for the benefit of the entire family. If some G 
facilities are being provided whereby the entire family stands to benefit, 
the same must be held to be relevant for the purpose of computation of 
total income on the basis whereof the amount of compensation payable 
for the death of the kith and kin of the applicants is required to be 
determined. [Para 9) (358-A, B, CJ 
H 
354 SUPREME COURT REPORTS 
[2007] 13 (Addi.) S.C.R. 
A 
2.2. Whatwould be 'just compensation' must be determined having 
regard to the facts and circumstances of each case. The basis for 
considering the entire pay packet is what the dependents have lost due 
to death of the deceased. It is in the nature of compensation for future 
loss towards the family income. The amounts, therefore, which were 
B required to be paid to the deceased by his employer by way of perks, 
should be included for computation of his monthly income as that would 
have been added to his monthly income by way o

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