Law in Real: Motor Vehicle Accident Claims

Motor Vehicle Accident Claims – Compensation Calculation

Adopted by the court in the case of Sarla Verma & ors V. DTC & Anr.

ACTUAL SALARY : (Where the annual income is in the taxable range, the words “actual salary” should be read as “actual salary less tax”). (explained in para 13 /39 in SC Pranay Sethi) (para 10 of Sarala Verma)

**IF NO PROOF of ACTUAL Salary [wherein the victim was employed, but the claimants are not able to prove her actual income, before the Court. In such a situation, the Court Reportable “guesses” the income of the victim on the basis of the evidence on record, like the quality of life being led by the victim and her family, the general earning of an individual employed in that field, the qualifications of the victim, and other considerations] Supreme Court Judgement in Kirti Vs. Oriental Insurance Company (SC 2021)- Judgement para :2

FUTURE PROSPECTS

50% of actual salary (below 40yrs of age and having permanent job) (para 11 Sarala Verma) (para 13 / 39 Pranay Sethi)
30% of actual salary (age between 40 to 50yrs)
No addition if the age is above 50 yrs
No addition When deceased was self-employed or was on fixed salary (SC stated in Pranay Sethi case as While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased had a permanent job and was below the age of 40 years, should be made. The addition should be 30%, if the age of the deceased was between 40 to 50 years. In case the deceased was between the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary less tax.)
SC stated in Pranay Sethi case as In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component.

PERSONAL EXPENDITURE (para 14 Sarla Verma) (para 39 Pranay Sethi)

If the deceased was Married deduction should be

1/3 of salary will be deducted if the dependents are 2 to 3
1/4 if the dependents are 4 to 6
1/5 if the dependents exceed 6

If the deceased was Bachelor and claimants are parents

50% will be deducted from salary as personal expenditure (mother will be considered as the only dependent)
Where family of the Bachelor is large and dependent on the income of the deceased as in a case where he has widowed mother and large number of younger non-earning sisters or brothers his personal and living expenses may be restricted to 1/3 rd

MULTIPLIER

Age of the Deceased	Multiplier scale in Trilok Chandra as clarified in Charlie Act
Upto 15 yrs	- As per Supreme Court of India in the case of National Insurance Co. Ltd vs Pranay Sethi on 31 October, 2017 Colum 6 should be selected if the age of deceased is up to 15yrs which means the multiplier in the case of age up to 15yrs will be 20 -
15 to 20 yrs	18
21 to 25 yrs	18
26 to 30 yrs	17
31 to 35 yrs	16
36 to 40 yrs	15
41 to 45 yrs	14
46 to 50 yrs	13
51 to 55 yrs	11
56 to 60 yrs	09
61 to 65 yrs	07
Above 65 yrs	05

As per Supreme Court of India in the case of National Insurance Co. Ltd vs Pranay Sethi on 31 October, 2017

Colum 6 should be selected if the age of deceased is up to 15yrs which means the multiplier in the case of age up to 15yrs will be 20 (judgement para 42 – (43.2))

ADDITIONAL CLAIMS

[SC stated in Pranay Sethi case as Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively // the amount that we have quantified should be enhanced on percentage basis in every three years and the enhancement should be at the rate of 10% in a span of three years. (from 2017)] (Pranay Sethi Para 61 / viii)

Loss of Estate (Rs 15000)
Loss of consortium (Rs 40000)
Cost of funeral expenses (Rs 15000)
Cost of Transportation
Cost of Medical Expenditure

as per judgement of Sumedh Kumar Sethi (Dwarka Court 614) Loss of consortium is Rs 40,000 X number of dependents

**ACTUAL INCOME if the Claimants are not able to produce documentary evidence

The Supreme Court has held that even if there is no evidence on record of actual income, deceased person's potential to earn can be considered while considering insurance claims in motor accidents matter.

CJI. NV. Ramana in

CIVIL APPEAL NOS.19-20 of 2021

KIRTI & ANR. ETC. …APPELLANT(S)

VERSUS

ORIENTAL INSURANCE CO. LTD. …RESPONDENT

judgement para2:

There are two distinct categories of situations wherein the Court usually determines notional income of a victim. The first category of cases relates to those wherein the victim was employed, but the claimants are not able to prove her actual income, before the Court. In such a situation, the Court Reportable “guesses” the income of the victim on the basis of the evidence onrecord, like the quality of life being led by the victim and her family, the general earning of anindividual employed in that field,the qualifications of the victim, and other considerations.