2021 INSC 0738
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.6724 OF 2021
Smt. Meena Pawaia & Ors.            ..Appellant (S)
VERSUS
Ashraf Ali & Ors.                               ..Respondent (S)
J U D G M E N T 
M. R. Shah, J.
1. Feeling   aggrieved   and   dissatisfied   with   the   impugned
judgment   and   order   dated   18.02.2020   passed   by   the   High
Court of Madhya Pradesh Bench at Gwalior  in MA No. 1319
of 2016, by which the High Court has partly allowed the said
appeal   preferred   by   the   Union   of   India/Railways   and   has
reduced   the   amount   of   compensation   from   Rs.12,85,000/­
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(awarded   by   the   claims   tribunal)   to   Rs.6,10,000/­,   the
original claimants have preferred the present appeal. 
2. In an accident which occurred on 12.09.2012, the son of the
original   claimants,   Mr.   Prashant   died.   The   deceased   at   the
time   of   accident   was   a   bachelor,   aged   21   years   and   was
studying  in 3 rd
  year  of B.E. The original claimants – mother,
father,   brother   and   sister   of   the   deceased   filed   the   claim
petition   before   the   Motor   Accident   Claims   Tribunal   (MACT),
being   MACT   case   No.1/2013   claiming   Rs.25   lakhs   as
compensation on different heads. It was the case on behalf of
the original claimants that the deceased at the relevant time
was   earning   Rs.8,000/­   per   month   as   he   was   engaged   in
tuition   of   other   students.   On   appreciation   of   evidence   the
learned Tribunal held that the deceased died due to rash and
negligence   on   the   part   of   the   driver   of   the   truck   involved   in
the   accident.   The   learned   Tribunal   assessed   the   monthly
income   of   the   deceased   as   Rs.15,000/­   per   month,
disbelieving   the  case on  behalf  of  the  claimants  that  he  was
getting   Rs.25,000/­   as   salary   from   one   Nectal   Construction
Company.     Learned   Tribunal   also   disbelieved   the   fact   about
earning   of   Rs.8,000/­   by   the   deceased   per   month   from
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private   tuition.   However   considering   the   young   age   and   the
educational   qualification,   the   learned   Tribunal   keeping   in
mind the nature of work to be done by him in future and his
future   prospect,   considered   the   future   loss   of   income   at
Rs.15,000/­   per   month.   The   learned   Tribunal   deducted  ½
over   his   own   personal   expenses   as   he   was   a   bachelor.
However,   the   learned   Tribunal   applied   the   multiplier   on   the
basis   of   the   age   of   the   parents   of   the   deceased   and
consequently   applied   the   14   multiplier   and   awarded
Rs.12,60,000/­   towards   future   loss   of   income.     The   learned
Tribunal   also   awarded   Rs.25,000/­   under   other   head,
namely on the head of the last rites of the deceased. Learned
Tribunal   in   all   awarded   Rs.12,85,000/­   with   7.5%   interest
per annum. 
3. Feeling   aggrieved   and   dissatisfied   with   the   judgment   and
award   dated   16.09.2016   passed   by   the   learned   Tribunal,
both,   the   original   claimants   as   well   as   Union   of   India
preferred   separate   appeals   before   the   High   Court.   Union   of
India  preferred  MA   No.   1276  of   2016   and  original   claimants
preferred   MA   No.1319   of   2016.   By   the   impugned   judgment
and   order,   the   High   Court   has   reduced   the   amount   of
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compensation   from   Rs.12,85,000/­   to   Rs.6,10,000/­
assessing   the   income   of   the   deceased   at   Rs.5,000/­   per
month instead   of Rs.15,000/­ per month as determined and
awarded   by   the   learned   Tribunal.   The   High   Court   corrected
the error committed by the learned Tribunal and applied the
multiplier   considering   the   age   of   the   deceased   and   applied
the   multiplier   of   18   and   has   awarded   Rs.5,40,000/­   under
the   head   of   future   loss   of   income.   Thereafter   it   has   further
awarded   Rs.15,000/­   as   loss   of   estate;   Rs.15,000/­   as
funeral   expenses   and   Rs.40,000/­   as   loss   of   love   and
affection.     The   High   Court   has   awarded   a   total   sum   of
Rs.6,10,000/­   instead   of   Rs.12,85,000/­   as   awarded   by   the
learned Tribunal. 
4. Feeling   aggrieved   and   dissatisfied   with   the   impugned
judgment   and   order   passed   by   the   High   Court   reducing   the
amount   of   compensation   from   Rs.12,85,000/­   to
Rs.6,10,000/­,   determining   the   future   loss   of   income   at
Rs.5,000/­  per  month,  original  claimants  have  preferred  the
present appeal. 
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5. Learned   counsel   appearing   on   behalf   of   the   appellants   ­
original   claimants  has  vehemently  submitted  that  looking  to
the educational qualification and the bright future, the High
Court has committed a grave error in considering the income
of the deceased at Rs.5,000/­ per month only 
5.1 It is submitted that the deceased at the time of accident was
aged   21­22   years   and   was   studying   in   B.E.   and   considering
the   fact   that   even  the   labourers  were   getting   Rs.5,000/­   per
month even under the Minimum Wages Act in the year 2012,
the   High   Court   ought   not   to   have   considered   the   income   of
deceased at Rs.5,000/­ per month. 
5.2 It   is   further   submitted   that   the   High   Court   has   not
considered   the   future   rise   in   income   while   awarding   the
future loss of income. 
6. Leaned counsel appearing   on  behalf of  the  Union of  India is
not   in   a   position   to   support   the   impugned   judgment   and
order   passed   by   the   High   Court   awarding   the   future   loss   of
income considering the income of the deceased at Rs.5,000/­
per month. However, it is submitted that as the deceased was
not earning anything at the time of accident and as the case
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on   behalf   of   the   claimants   that   he   was   earning   Rs.25,000/­
as   a   salary   from   Nectal   Construction   Company   and   that   he
was   earning   Rs.8,000/­   from   private   tuition   has   been
disbelieved and thereby he was not earning at all at the time
of   death,   there   shall   not   be   any   future   rise   in   income   while
determining the future loss of income. It is further submitted
by   the   learned   counsel   appearing   on   behalf   of   the   Union   of
India that in the execution proceedings the entire amount as
awarded by the High Court is paid, the claimants have stated
that   they   accept   the   same   as   full   and   final   settlements   and
therefore the present appeal may not be entertained.     
7. We   have   heard   the   learned   counsel   appearing   on   behalf   of
the respective parties at length. 
8. At the outset, it is required to be noted that deceased at the
time of accident was aged 21­22 years and that he was a 3 rd
year   student   in   civil   engineering.   Therefore,   it   can   be   said
that looking to his educational qualification he was having a
bright   future.     Learned   Tribunal   assessed   the   income   of
deceased   at   Rs.15,000/­   per   month   for   the   purpose   of
awarding   compensation   under   the   head   of   future   economic
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loss.   However,   by   the   impugned   judgment   and   order,   the
High   Court   has   reduced   the   compensation   and   determined
the   income   of   the   deceased   at   Rs.5,000/­   per   month.
Awarding   the   future   economic   loss   to   the   claimants
considering the income of the deceased as Rs.5,000/­ is not
sustainable at all. Even the labourers/skilled labourers were
getting Rs.5,000/­ per month under the Minimum Wages Act
in the year 2012. As the deceased was studying in the 3 rd
/4 th
semester of civil engineering, he cannot be considered worse
than   the   labourers/skilled   labourers.   Even   the   counsel
appearing on behalf of the Union of India has fairly conceded
that   assessing   the   income   of   deceased   at   Rs.5,000/­   per
month   for   the   purpose   of   awarding   the   compensation   under
the   head   of   future   economic   loss   can   be   said   to   be   at   lower
side and as such is not justifiable. While awarding the future
economical   loss,   when   the   deceased   died   at   the   young   age
21­22   years   and   was   not   earning   at   the   time   of
death/accident,   as   per   catena   of  decisions   of   this   court,  the
income   for   the   purpose   of   determining   the   future   economic
loss   is   always   done   on   the   basis   of   guesswork   considering
many   circumstances   namely   the   educational   qualification
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and   background   of   the   family,   etc.   Therefore   looking   to   the
educational   qualification   and   the   family   background   and   as
observed   herein   above,   the   deceased   was   having   a   bright
future studying  in the 3 rd
  year  of civil engineering, we are of
the opinion that the income of the deceased at least ought to
have   been   considered   at   least   Rs.10,000/­   per   month,   more
particularly   considering   the   fact   that   the   labourers/skilled
labourers were getting Rs.5,000/­ per month even under the
Minimum Wages Act in the year 2012. 
9. The next question which is posed for the consideration before
this court is whether anything further is required to be added
towards   the   future   rise   in   income?     It   is   submitted   that   on
behalf   of   the   Union   of   India   that   as   the   deceased   was   not
serving   and   earning   at   the   time   of   accident/death   nothing
further   is   to   be   added   towards   the   future   prospect/future
rise in income. The aforesaid cannot be accepted. 
10. At   this   stage,   the   decision   of   this   court   in   the   case   of
National   Insurance   Company   Limited   vs.   Pranay   Sethi
and   Others   (2017)   16   SCC   680,   on   addition   of   future
prospects   to   determine   the   multiplicand   is   required   to   be
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referred   to   and   considered.   In   the   aforesaid   decision   the
Constitution Bench of this court had an occasion to consider
in   detail   the   justification   for   addition   of  future   prospects.   In
the   aforesaid   decision   it   is   observed   and   held   that   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. It is also further held that in case the
deceased was self­employed 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.   It   is   also   further   held   that   the
established   income   means   the   income   minus   the   tax
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component. While holding so in paras 54 to 57, it is observed
and held as under:­
“54.   In   Santosh Devi   [Santosh Devi   v.   National Insurance
Co.   Ltd.,   (2012)   6   SCC   421]   the   Court   has   not   accepted
as   a   principle   that   a   self­employed   person   remains   on   a
fixed   salary   throughout   his   life.   It   has   taken   note   of   the
rise   in   the   cost   of   living   which   affects   everyone   without
making   any   distinction   between   the   rich   and   the   poor.
Emphasis has been laid on the extra efforts made by this
category   of   persons   to   generate   additional   income.   That
apart,   judicial  notice  has  been   taken   of  the  fact   that   the
salaries of those who are employed in private sectors also
with   the   passage   of   time   increase   manifold.   In   Rajesh
case   [Sarla   Verma   v.   DTC,   (2009)   6   SCC   121],   the   Court
had   added   15%   in   the   case   where   the   victim   is   between
the   age   group   of   15   to   60   years   so   as   to   make   the
compensation   just,   equitable,   fair   and   reasonable.   This
addition   has   been   made   in   respect   of   self­employed   or
engaged on fixed wages.
55.   Section 168 of the Act deals with the concept of “just
compensation” and the same has to be determined on the
foundation   of   fairness,   reasonableness   and   equitability
on acceptable legal standard because such determination
can   never   be   in   arithmetical   exactitude.   It   can   never   be
perfect.   The   aim   is   to   achieve   an   acceptable   degree   of
proximity   to   arithmetical   precision   on   the   basis   of
materials   brought   on   record   in   an   individual   case.   The
conception   of   “just   compensation”   has   to   be   viewed
through   the   prism   of   fairness,   reasonableness   and   non­
violation   of   the   principle   of   equitability.   In   a   case   of
death,   the   legal   heirs   of   the   claimants   cannot   expect   a
windfall.   Simultaneously,   the   compensation   granted
cannot   be   an   apology   for   compensation.   It   cannot   be   a
pittance.   Though   the   discretion   vested   in   the   tribunal   is
quite wide, yet it is obligatory on the part of the tribunal
to   be   guided   by   the   expression,   that   is,   “just
compensation”.   The   determination   has   to   be   on   the
foundation   of   evidence   brought   on   record   as   regards  the
age   and   income   of   the   deceased   and   thereafter   the
apposite multiplier to be applied. The formula relating to
multiplier   has   been   clearly   stated   in   Sarla   Verma   [ Sarla
Verma   v.   DTC ,   (2009)   6   SCC   121]   and   it   has   been
approved   in   Reshma   Kumari   [ Reshma   Kumari   v.   Madan
Mohan , (2013) 9 SCC 65]. The age and income, as stated
earlier, have to be established by adducing evidence. The
tribunal   and   the   courts   have   to   bear   in   mind   that   the
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basic principle lies in pragmatic computation which is in
proximity   to   reality.   It   is   a   well­accepted   norm   that
money cannot substitute a life lost but an effort has to be
made for grant of just compensation having uniformity of
approach.   There   has   to   be   a   balance   between   the   two
extremes, that is, a windfall and the pittance, a bonanza
and   the   modicum.   In   such   an   adjudication,   the   duty   of
the   tribunal   and   the   courts   is   difficult   and   hence,   an
endeavour   has   been   made   by   this   Court   for
standardisation   which   in   its   ambit   includes   addition   of
future prospects on the proven income at present. As far
as   future   prospects   are   concerned,   there   has   been
standardisation keeping in view the principle of certainty,
stability   and   consistency.   We   approve   the   principle   of
“standardisation”   so   that   a   specific   and   certain
multiplicand is determined for applying the multiplier on
the basis of age.
56.   The   seminal   issue   is   the   fixation   of   future   prospects
in cases of deceased who are self­employed or on a fixed
salary.   Sarla   Verma   [ Sarla   Verma   v.   DTC ,   (2009)   6   SCC
121]   has   carved   out   an   exception   permitting   the
claimants   to   bring   materials   on   record   to   get   the   benefit
of addition of future prospects. It has not, per se, allowed
any future prospects in respect of the said category.
57.   Having   bestowed   our   anxious   consideration,   we   are
disposed   to   think   when   we   accept   the   principle   of
standardisation,   there   is   really   no   rationale   not   to   apply
the said principle to the self­employed or a person who is
on a fixed salary. To follow the doctrine of actual income
at   the   time   of   death   and   not   to   add   any   amount   with
regard to future prospects to the income for  the purpose
of   determination   of   multiplicand   would   be   unjust.   The
determination   of   income   while   computing   compensation
has   to   include   future   prospects   so   that   the   method   will
come   within   the   ambit   and   sweep   of   just   compensation
as   postulated   under   Section   168   of   the   Act.   In   case   of   a
deceased   who   had   held   a   permanent   job   with   inbuilt
grant   of   annual   increment,   there   is   an   acceptable
certainty.   But   to  state   that   the   legal  representatives   of   a
deceased who was on a fixed salary would not be entitled
to   the   benefit   of   future   prospects   for   the   purpose   of
computation   of   compensation   would   be   inapposite.   It   is
because   the   criterion   of   distinction   between   the   two   in
that   event   would   be   certainty   on   the   one   hand   and
staticness   on   the   other.   One   may   perceive   that   the
comparative   measure   is   certainty   on   the   one   hand   and
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uncertainty   on   the   other   but   such   a   perception   is
fallacious.   It   is   because   the   price   rise   does   affect   a   self­
employed   person;   and   that   apart   there   is   always   an
incessant  effort  to  enhance one's  income for  sustenance.
The   purchasing   capacity   of   a   salaried   person   on
permanent   job   when   increases   because   of   grant   of
increments and pay revision or for some other change in
service   conditions,   there   is   always   a   competing   attitude
in   the   private   sector   to   enhance   the   salary   to   get   better
efficiency  from the employees. Similarly, a person who is
self­employed is bound to garner his resources and raise
his   charges/fees   so   that   he   can   live   with   same   facilities.
To   have   the   perception   that   he   is   likely   to   remain   static
and   his   income   to   remain   stagnant   is   contrary   to   the
fundamental   concept   of   human   attitude   which   always
intends to live with dynamism and move and change with
the   time.   Though   it   may   seem   appropriate   that   there
cannot be certainty in addition of future prospects to the
existing   income   unlike   in   the   case   of   a   person   having   a
permanent   job,   yet   the   said   perception   does   not   really
deserve   acceptance.   We   are   inclined   to   think   that   there
can   be   some   degree   of   difference   as   regards   the
percentage   that   is   meant   for   or   applied   to   in   respect   of
the   legal   representatives   who   claim   on   behalf   of   the
deceased who had a permanent job than a person who is
self­employed   or   on   a   fixed   salary.   But   not   to   apply   the
principle   of   standardisation   on   the   foundation   of
perceived   lack   of   certainty   would   tantamount   to
remaining   oblivious   to   the   marrows   of   ground   reality.
And,   therefore,   degree­test   is   imperative.   Unless   the
degree­test   is   applied   and   left   to   the   parties   to   adduce
evidence to establish, it would be unfair and inequitable.
The   degree­test   has   to   have   the   inbuilt   concept   of
percentage.   Taking   into   consideration   the   cumulative
factors,   namely,   passage   of   time,   the   changing   society,
escalation of price, the change in price index, the human
attitude   to   follow   a   particular   pattern   of   life,   etc.,   an
addition of 40% of the established income of the deceased
towards   future   prospects   and   where   the   deceased   was
below   40   years   an   addition   of   25%   where   the   deceased
was   between   the   age   of   40   to   50   years   would   be
reasonable.”
11. We   see   no   reason   why   the   aforesaid   principle   may   not   be
applied, which apply to the salaried person and/or deceased
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self   employed   and/or   a   fixed   salaried   deceased,   to   the
deceased   who   was   not   serving   and/or   was   not   having   any
income at the time of accident/death. In case of a deceased,
who   was   not   earning   and/or   not   doing   any   job   and/or   self
employed   at   the   time   of   accident/death,   as   observed   herein
above   his   income   is   to   be   determined   on   the   guesswork
looking   to   the   circumstances   narrated   hereinabove.   Once
such   an   amount   is   arrived   at   he   shall   be   entitled   to   the
addition   over   the   future   prospect/future   rise   in   income.   It
cannot   be   disputed  that   the  rise  in   cost  of   living   would   also
affect such a person. As observed by this court in the case of
Pranay   Sethi   (Supra),   the   determination   of   income   while
computing   compensation   has   to   include   future   prospects   so
that the method will come within the ambit and sweep of just
compensation   as  postulated  under   Section   168   of  the   Motor
Vehicles   Act.     In   case   of   a   deceased   who   had   held   a
permanent job with inbuilt grant of annual increment and/or
in case of a deceased who was on a fixed salary and /or self
employed would only  get the benefit of future prospects and
the legal representatives of the deceased who was not serving
at   the   relevant   time   as   he   died   at   a   young   age   and   was
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studying,   could   not   be   entitled   to   the   benefit   of   the   future
prospects   for   the   purpose   of   computation   of   compensation
would be inapposite. Because the price rise does affect them
also and there is always an incessant effort to enhance one's
income   for   sustenance.   It   is   not   expected   that   the   deceased
who   was   not   serving   at   all,   his   income   is   likely   to   remain
static and his income would remain stagnant. As observed in
Pranay  Sethi (Supra) to have the perception that he is likely
to   remain   static   and   his   income   to   remain   stagnant   is
contrary   to   the   fundamental   concept   of   human   attitude
which   always   intends   to   live   with   dynamism   and   move   and
change   with   the   time.   Therefore   we   are   of   the   opinion   that
even in case of a deceased who was not serving at the time of
death   and   had   no   income   at   the   time   of   death,   their   legal
heirs   shall   also   be   entitled   to   future   prospects   by   adding
future   rise   in   income   as   held   by   this   court   in   the   case   of
Pranay   Sethi   (supra)   i.e.   addition   of   40%   of   the   income
determined   on   guesswork   considering   the   educational
qualification,   family   background   etc.,   where   the   deceased
was below the age of 40 years. 
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12. In light of the above, in the present case, the claimants shall
be entitled to future economic loss at Rs.14,000/­ per month.
The deceased at the time of accident was aged between 21­22
years.     Therefore,   the   multiplier   has   to   be   adopted/applied
considering   the   age   of   the   deceased   and   not   the   age   of   the
parents   thus,   multiplier   18   would   apply.   Therefore,   the
claimants   shall   be   entitled   to   Rs.15,12,000/­   towards   the
future   economic   loss.     Claimants   shall   also   be   entitled   to
Rs.15,000/­   towards   loss   of   estate,   Rs.15,000/­   towards
funeral   expenses   and   Rs.40,000/­   towards   loss   of   love   and
affection.   Thus, the claimants shall be entitled in all a sum
of  Rs.15,82,000/­  with interest thereon at the rate of 7% per
annum from the date of claims petition till realization.
13. Now so far as the submission on behalf of the Union of India
that   as  in   the   execution   proceedings   the  claimants   accepted
the  amount  due and  payable under   the impugned judgment
and order and accepted the same as full and final settlement,
thereafter   the   claimants   ought   not   to   have   preferred   appeal
for   enhancement   of   the   compensation   is   concerned,   the
aforesaid   cannot   be   accepted.     The   claimants   are   entitled   to
just   compensation.     Merely   because   in   the   execution
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proceedings   they   might   have   accepted   the   amount   as
awarded   by   the   High   Court,   may   be   as   full   and   final
settlement,   it   shall   not   take   away   the   right   of   the   claimants
to claim just compensation and shall not preclude them from
claiming   the   enhanced   amount   of   compensation   which   they
as   such   are   held   to   be   entitled   to.     As   such,   the   Motor
Vehicles Act is a benevolent Act and as observed hereinabove
the claimants are entitled to just compensation.  As such, the
Union of India ought not to have taken such a plea/defence.
14. In   view   of   the   above   and   for   the   reasons   stated   above,   the
present   appeal   succeeds   in   part.     Impugned   judgment   and
order passed by the High Court is modified and it is held that
the claimants shall be entitled a total sum of  Rs.15,82,000/­
with   interest   thereon   at   the   rate   of   7%   from   the   date   of
claims petition till the date of realization.  
15. Now the appellants to deposit the balance enhanced amount
of compensation as per the present judgment and order with
the learned Tribunal within a period of six weeks from today
and also deposit the enhanced amount of compensation to be
invested by  the learned  Tribunal in  the name of the parents
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in   fixed   deposit   in   any   Nationalized   Bank   for   a   period   of   3
years however, the parents shall be entitled to the periodical
interest on the same.  
16. Present   appeal   is  partly   allowed   to   the   aforesaid   extent   with
token   cost   which   is   quantified   at   Rs.10,000/­   to   be   paid   to
the   original   claimants   also   to   be   deposited   in   the   learned
Tribunal   within   a   period   of   six   weeks   from   today   and   the
same may be paid to the original claimants.
…………………………………J.
           (M. R. SHAH)
…………………………………J.
       (SANJIV KHANNA)
New Delhi, 
November 18, 2021.
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