SHYAMWATI SHARMA & ORS. versus KARAM SINGH & ORS.

Citation: [2010] 8 S.C.R. 417 · Decided: 13-07-2010 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2010] 8 S.C.R. 417 
SHYAMWATI SHARMA & ORS. 
v. 
KARAM SINGH & ORS. 
(Civil Appeal No. 5316 of 2010) 
JULY 13, 2010 
[R.V. RAVEENDRAN AND H.L. GOKHALE, JJ.] 
Motor Vehicles Act, 1988 - Motor accident - Death of 
A 
B 
36 year old man -
Claim for compensation by his six 
dependants - Awarded by Tribunal - Enhanced by High C 
Court - On appeal, held: Compensation further enhanced 
recalculating the same by increasing salary by 50% towards 
future prospects; deducting 30% towards taxes and 25% 
towards personal expenses and by applying multiplier of 15. 
Compensation - For motor accident - Deduction of 30% 
from the income of the deceased towards taxes - Propriety 
of - Held: If annual income is in taxable range, appropriate 
deduction towards taxes is proper. 
After death of a Sub-Inspector of Police aged 36 
years, in a motor accident, six of his dependants made a 
claim for compensation. The Tribunal awarded 
compensation of Rs. 14,44,6001- with 9% interest p.a. after 
deducting one third from his gross monthly salary 
towards personal and living expenses, and by applying 
multiplier of 13. High Co1.1rt on appeal enhanced the 
compensation to Rs. 14,65,7761-. It reached the amount 
by making addition to income towards future prospects, 
deducting therefrom 30% towards deduction from salary; 
D 
E 
F 
by deducting one fourth of income towards personal 
G 
expenses, and by applying multiplier of 13. 
The instant appeal was filed for enhancement of 
compensation contending that deduction of 30% towards 
417 
H 
41°8 
SUPREME COURT REPORTS 
[2010] 8 S.C.R. 
A taxes was not warranted and that the court should have 
applied multiplier of 16. 
Allowing the appeal, the Court 
HELD: 1. Wherever the deceased is below 40 years 
B of age and had a permanent job, the actual salary (less 
tax) should be increased by 50% towards future 
prospects, to arrive at the monthly income. Where the 
number of dependants of a deceased are in the range of 
4 to 6, the deduction towards personal and living 
C expenses of the deceased should be 25%. In regard to 
persons aged 36 to 40 years, the appropriate multiplier 
should be 15. Applying the said principles, compensation 
in the instant case is recalculated. The compensation is 
increased from Rs.14,66,600/- to Rs.19, 70,250/-. The 
D increased amount shall carry interest at the rate of 6% 
per annum from the date of claim petition to the date of 
payment. [Paras 6 and 9] [421-B-C; 422-E] 
Sar/a Verma vs. Delhi Transport Corporation 2009 (6) 
E sec 121, relied on. 
2. The deduction of 30% from the salary is correct. 
Where the annual income is in the taxable range, 
appropriate deduction should be made towards tax. In 
the instant case as the annual income has been worked 
F out as Rs.2,48,292/-, appropriate deduction has to be 
made towards income-tax. The rate of income tax is a 
varying figure, with reference to taxable income after 
permissible deductions and the year of assessment. The 
High Court has rightly assessed the deduction as 30%. 
G However, it is clarified that while ascertaining the income 
of the deceased, any deductions shown in the salary 
certificate as deductions towards GPF, life insurance 
premium, repayments of loans etc., should not be 
excluded from the income. The deduction towards 
H income tax/surcharge alone should be considered to 
SHYAMWATI SHARMA & ORS. v. KARAM SINGH & 419 
ORS. 
arrive at the net income of the deceased. (Para 8] (421-
A 
H; 422-A-D] 
Sar/a Verma vs. Delhi Transport Corporation 2009 (6) 
sec 121, distinguished. 
Case Law Reference: 
2009 (6) sec 121 
Relied on. 
Distinguished. 
Para 6 
Para 8 
B 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 
C 
5316 of 2010. 
From the Judgment & Order daed 20.4.2007 of the High 
Court of Delhi at New Delhi in F.A.O. No. 250 of 2003. 
R.K. Khanna for the Appellant. 
A.K. Raina, Dr. Kailash Chand for the Respondent. 
The Judgment of the Court was delivered by 
R. V. RAVEENDRAN J. 1. Leave granted. 
2. This is an appeal for enhancement of compensation, by 
the mother, widow, three children and father of Kuldeep 
Sharma, a Sub-Inspector of Poli~e. aged 36 years, who died 
D 
E 
in a motor accident on 25.12.1990. According to the salary 
F 
certificate, his basic pay was Rs.7425/-, the gross salary (pay 
and allowances) was Rs.13,794/-, the deductions aggregated 
to Rs.4,305/- and the net take home salary was Rs.9,489/- per 
month. 
3. The Tribunal by its award dated 17 .1.2003 held the 
G 
respondents liab
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