The Supreme Court has ruled that the "future prospects" of the self-employed and those with a fixed income have to be taken into consideration in computing the amount of compensation to dependents in fatal motor accident cases.
The five-judge bench headed by Chief Justice Dipak Misra also laid down standard criteria for the computation of such claims, in a decision announced last month.
The decision is seen as a major departure from the existing compensation award practice, according to which dependents of only those having a permanent job with scope for increases in salary are entitled to compensation based on the “future prospects” of the accident victim.
The Court ruled: ““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 and 50 years. In case the deceased was between the age of 50 and 60 years, the addition should be 15%. Actual salary should be read as actual salary less tax.”
The Bench also said: “In case the deceased was self-employed or on a fixed salary, an addition of 40% of established income should be the warrant where the deceased was below 40; 25% if between 40-50 and 10% if between 50 and 60 years, should be the method of computation.”
The apex court has also fixed the amount to be paid to the dependents of road accident victims under heads such as loss of consortium and funeral expense, and said that there would be 10% raise in the amount after every three years.
“Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be INR15,000 (US$232), INR40,000 and INR15,000 respectively.”