LexORIENTAL INSURANCE COMPANY LTD. versus JASHUBEN AND ORS.
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A B [2008] 2 S.C.R. 930 ORIENTAL INSURANCE COMPANY LTD. v. JASHUBEN AND ORS. (Civil Appeal No. 1272 of 2008) FEBRUARY ~) 2008 [S.B. SINHA AND V.S. -SIRPURKAR, JJ.] ~ Motor Vehicles Act, 1988 - s. 166 - Accidents claim - Determination of compensation - Assistant working in ONGC c met with accident while traveling in a bus and died - lncidef!t occurred in 1994 - Determination of compensation by Courts below by taking into consideration future prospects of the deceased including pay revision made by ONGC w.e.f. 1'-1- 1997 - Challenge to - Held: Present case is not one where, 0 as on date of death, salary of deceased was revised with retrospective effect from 1994 - Salary would be revised or ~ not was not known at that point of time - Only because salary was revised at a later point of time, same by itself would not have been a factor which could have been taken into E consideration for determining compensation - Though, further prospect is not ·out of bound for such consideration, but same should be founded on some legal principle - What would have _been income of deceased on date of retirement was not a relevant factor in light of peculiar facts of this case and, thus, ·, approach of Courts below was incorrect- It was impermissible F ·in law to take into consideration the effect of revision in scale of pay w.e.f 1-1-1997. Passenger traveling in a bus met with an accident due to rash and negligent driving on the part of the bus G driver and died. The incident occurred in 1994. Deceased, at that time, aged 35 years, was working as an Assistant in the Oil and Natural Gas Commission (ONGC). In appeal to this Court, the contention of the insurance company is that while determining H 930 ORIENTAL INSURANCE ,COMPANY LTD. v. 931 JASHUBEN AND ORS. """I ... ...... compensation payable to heirs and LRs of the deceased, A the Courts below erred in taking into consideration future prospects of the deceased including pay revision mad.e by ONGC w.e. f. 1-1-1997. Partly allowing the appeal, the Court B HELD:1.1. The amount of compensation payable to > ~ the heirs and legal representatives of a deceased victim of an accident must be a fair and reasonable one. The estimate of the amount of loss of dependency may be arrived at by adopting various methods, application of c structured formula being one of them. Such a formula has also been provided for in Schedule II appended to the Motor Vehicles Act, 1988. While determining the amount of compensation, certain well known principles must be kept in mind. [Para 11] [937-C, D, E] D ~ 1.2. The present case is not one where, as on the date of death, the salary of the deceased was revised with retrospective effect from 1994. Salary would be revised or not was not known at that part of time. Only because such salary was revised at a later point of time, the same by itself would not have been a factor which could have E been taken into consideration for determining the amount of compensation.The Tribunal, therefore, committed a serious illegality in taking into consideration the latter aspect. [Para 12] [937-E, F] F ~ 1.3. The amount of compensation indisputably should be determined having regard to the pecuniary loss caused to the dependents by reason of the death of the victim .. It was necessary to consider the earnings of the deceased at the time of the .accident. Of course, further G prospect is not out of bound for.such consideration. But ~r. the same should be founded on some legal principle. [Para 13] [937-G; 938-A] 1 .. 4. What would have been the income of the deceased on the date of retirement was not a relevant H 932 SUPREME COURT REPORTS [2008]2 S.C.R. \ A factor in the light of peculiar facts of this case and, thus, the approach of the Tribunal and the High Court must be held to be incorrect. It is impermissible in law to take into consideration the effect of revision in scale of pay w.e.f. 1.1.1997 or what would have been the scale of pay in 2002. B [Para 25] [943-D, E] · General Manager, Kera/a State Road Transport Corporation, Trivendrum v. Susamma Thomas (1994) 2 SCC . 176; Sar/a Dixit & Anr. v. Ba1want Yadav & Ors. (1996) 3 SCC 179; Rathi Menon v. Union of India (2001) 3 SCC 714; N. C Sivammal and Ors. v.. Managing Director, Pandian Roadways Corporation and Ors. (1985) 1 SCC 18; TN. State Transport Corporation Ltd. v. S. Rajapriya and Ors. (2005) 6 SCC 236; New India Assura
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