Supreme Court of India
Rahul Sharma vs National Insurance Company Ltd. on 7 May, 2021Author: Hon’Ble The Justice

Bench: Hon’Ble The Justice, Surya Kant



(ARISING OUT OF SLP (C) NO. 719 OF 2018)







1. Leave granted.

2. The appellants before us seek to impugn the judgment

dated 4th September, 2017, passed by the Delhi High Court in

MAC. App. No. 740/2016.

3. The brief facts, necessary for the adjudication of this

appeal are as follows: on the intervening night of the 18 th/19th
Signature Not Verified

Digitally signed by

May, 2010, the vehicle in which parents of the Appellants were
Vishal Anand
Date: 2021.05.07
18:47:25 IST

travelling rammed into a truck, near Phagwara, Punjab.

Resultantly, they succumbed to the injuries sustained in the

accident. The car was plying other relatives of the Appellants

and the deceased. Thereafter, F.I.R. no. 76/10, was registered

in PS Sadar Phagwara, Punjab under Sections 249, 304­A,

427 of the Indian Penal Code, 1860 in this regard. It may be

relevant to note that the vehicle was, during the relevant

period, insured by the National Insurance Co. Ltd.

(hereinafter, referred to as NIC), the Respondent No. 1 herein.

4. The Appellants instituted a claim petition before the

Motor Accidents Claims Tribunal (hereinafter, “the MACT”),

under Sections 166 and 140 of the Motor Vehicles Act, 1988,

for grant of compensation for the death of their parents, which

were registered as cases numbered, MACT No. 349/2010 (with

respect to Mrs. Manisha Sharma) and MACT No. 350/2010

(with respect to Mr. Sunil Sharma), and were adjudicated vide

a common award dated 7th June, 2016.

5. The present appeal pertains to the claim petition

preferred on the account of the death of the appellants mother.

The appellants’ mother, Mrs. Manisha Sharma, was aged

about 37 years and was a self­employed individual.

6. The Tribunal, while adjudicating the claim, determined

the compensation to be Rs. 41,55,235. The Tribunal relied

upon the Income Tax Return of the deceased and concluded

that her annual income was Rs. 2,55,349. Based on the

dictum of this Court in Sarla Verma v. Delhi Transport

Corporation, (2009) 6 SCC 121, 50% addition was included

towards future prospects and the multiplier was taken to be

15. Since, the deceased had two dependents, 1/3 rd of the

deceased’s income was deducted on account of personal and

living expenses. The non­pecuniary compensation was

calculated at Rs. 3,25,000. The NIC, being the insurer of the

vehicle, was held liable to pay the compensation of Rs.

41,55,235 with an interest of 9% per annum from the date of

filing of the claim petition.

7. Aggrieved, the insurance company preferred an appeal

against the award of the MACT before the Delhi High Court,

which disposed of the appeal vide the impugned judgment

dated 4th September, 2017. The High Court, in its common

judgement, calculated the pecuniary compensation as Rs.

19,16,000 and the non­pecuniary damages was calculated as

Rs.2,50,000, for a total compensation of Rs. 21,66,000/­, in

MAC. APP. 740/2016. While passing the aforesaid impugned

order, the High Court deducted 50% of income towards

personal and living expenses. The High Court however, held

the deceased ineligible for the grant of future prospects as she

was self­employed.

8. Aggrieved by the impugned judgement, the Appellants

have preferred the present appeal, by way of Special Leave,

impugning only the compensation as modified in MAC. App.

No. 740/2016.

9. We have heard the counsel for the Appellants and the

counsel for the NIC, Respondent No. 1. The Respondents No. 2

and 3 have not tendered their appearances, despite service.

The insurance company has also placed on record their

written submissions, which have been perused.

10. This Court in a Five Judge Bench decision in National

Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680,

clearly held that in case the deceased is self­employed and

below the age of 40, 40% addition would be made to their

income as future prospects. In the present case, the deceased

was self­employed and was 37 years old, therefore, warranting

the addition of 40% towards future prospects. Moreover,

Pranay Sethi (supra), affirming the ratio in Sarla Verma

(supra), held that the deduction towards personal and living

expenses for a person such as the deceased who was married

with two dependents, to be one­third (1/3 rd). Since the High

Court in the impugned judgment deducted 50% the same

merits interference by this Court.

11. Therefore, in light of the above, the compensation as

awarded to the Appellants by the High Court is modified to the

extent of deduction towards personal and living expenses

(determined to be one­third (1/3 rd)) and 40% addition towards

future prospects. The annual income of the deceased (Mrs.

Manisha Sharma) was Rs. 2,55,349. After deducting personal

and living expenses and adding future prospects, the annual

income is determined at Rs. 2,38,326/­. The multiplier of 15 is

appropriate, considering the age of the deceased. Accordingly,

the total loss of dependency, is calculated to be

Rs. 35,74,890/­. We do not find any reason to interfere with

any other heads as determined by the High Court.

12. Hence, the total compensation is determined to be,

Rs. 38,24,890/­ payable with interest of 9% per annum from

the date of filing of the claim petition till realisation, set off

against the part compensation already received, if any.

13. This Civil Appeal is disposed of in the aforesaid terms.





MAY 07, 2021



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