Bombay HC: How to ascertain which perks given to employee is for his benefit and which perks are for benefit of his family for computation of compensation in motor accident?

 In the present case, the deceased was in service. As far as determination of income by way of salary is concerned, the law has been laid down by the Apex Court in case of National Insurance Company Ltd. v. Indira Srivastava and others (MANU/SC/8201/2007 : AIR 2008 SC 845) (supra). In paragraph 10 (Para 9 of AIR) of its decision, the Apex Court held thus:-

10...If some facilities are being provided whereby the entire family stands to benefit, the same, in our opinion, must be held to be relevant for the purpose of computation of total income on the basis whereof the amount of compensation payable for the death of the kith and kin of the applicant is required to be determined.... {Para 16}

The ultimate conclusion is in paragraph 19 (Para 17 of AIR) of its judgment which reads thus:-

19 The amounts, therefore, which were required to be paid to the deceased by his employer by way of perks, should be included for computation of his monthly income by way of contribution to the family as contra distinguished to the ones which were for his benefit. We may, however, hasten to add that from the said amount of income, the statutory amount of tax payable thereupon must be deducted.

17. Thus, the well settled position of law is that the amounts which were paid to the deceased by way of perks should be taken into consideration for computation of monthly income provided the perks were for the benefit of the family of the deceased. However, the allowances which were meant only for his personal benefit cannot be taken into consideration. The income-tax will have to be deducted from the income while arriving at the income for determining multiplicand. 

Due to absence of any evidence adduced by the first respondent to show that the Uniform Making Allowance, Uniform Washing Allowance, Transport Allowance, Conveyance, Medical Expenses were for the benefit of the family, the same cannot be taken into consideration for computing the loss of dependency. As far as the Academic Research Allowance is concerned, the same is payable as a perk apart from the basic salary. As suggested by the very name, it was not payable to the deceased by way of reimbursement of expenditure incurred by him. Hence, the benefit thereof was available not only to the deceased but also to his family members. Therefore, the said amount will have to be taken into consideration and will have to be added to the basic salary of Rs. 31,950/-. Thus, the gross salary comes to Rs. 34,950/- which can be rounded off to Rs. 35,000/-.

 IN THE HIGH COURT OF BOMBAY

First Appeal No. 1068 of 2012

Decided On: 31.08.2012

National Insurance Co. Ltd. Vs. Vaishali Harish Devare and Ors.

Hon'ble Judges/Coram:

Abhay Shreeniwas Oka and Sadhana S. Jadhav, JJ.

Citation: 2014 ACJ 415 Bom, MANU/MH/2291/2012.

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Whether claimants can seek compensation under motor accident claim petition without proving their dependency over deceased?

 Thus from the aforesaid, it is clear that the aspect of dependency
has to be pleaded and proved by the claimants before any compensation is
granted to them.   As noted above, only the original  claimant No.2 had
examined himself.   There was no other evidence on record.   The original
claimant No.2 had opposed the addition of Farzana and Shoeb as claimants.
After   being   added   as   claimants,     these   two   claimants   did   not   lead   any
evidence to indicate their dependency on Haroon.   Moreover, the rejection
of the claim for compensation has been challenged only by the subsequently

added claimants and not by the original claimant No.2.  Thus in absence of
any evidence whatsoever that the appellants were dependent upon Haroon,
the prayer for grant of compensation to them cannot be granted.   There is in
fact no legal basis whatsoever to grant such compensation.  By applying the
ratio of the judgment of the Honourable Supreme Court in  Gujarat State
Transport   Corporation  (supra),   it   is   held   that   there   is   no   justification
whatsoever which would be in consonance with principles of justice, equity
and good conscience to grant compensation to the appellants.  
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
 FIRST APPEAL NO.199 OF 2007
 Farzana d/o Abbas Bhai 
     
­vs
Maharashtra State Road Transport Corporation, 

CORAM  : A.S.CHANDURKAR, J. 
Citation:2016(3) ALLMR870                    

Date on which judgment is pronounced    :  29th April, 2016 

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Whether husband can be denied compensation due to accidental death of his wife if he was not dependent on his wife?

 The submission of the learned counsel for the appellant that
respondent no.1 – claimant i.e the husband of the deceased was earning at
the relevant time and as such was not dependent on the income of his wife
cannot be accepted, in view of the evidence that has come on record. No
doubt, the first respondent – claimant was working in the Irrigation
Department and was drawing a monthly salary of Rs.55,000/- per month,
out of which Rs.10,000/- odd was being deducted towards various
deductions including statutory deductions. According to the evidence that

has come on record, the deceased would spend her entire salary on the
family members and was also paying for her children's education. There is
no serious challenge to this part of the evidence that has come on record.
In this day and age, considering the cost of living, the income of both the
husband and wife are equally important for running the house as they
supplement each other's income. It cannot be generally said that as the other
spouse (surviving) is earning, there is no dependency. When a husband and
wife, with separate incomes are living together and sharing their expenses,
and in consequence thereof, their joint living expenses are less than twice
the expenses of each living separately, then each, by the fact of sharing is
conferring a benefit on the other. This results in higher savings. In case, one
spouse loses the benefit of contribution rendered by the other in managing
the household, in such a situation, the surviving spouse would be entitled to
compensation for loss of dependency (for loss of services rendered in
managing households). In the present case, it has come in the evidence that
the deceased was contributing her entire salary for the household needs
including for the education of her two sons, who were studying at the
relevant time. The said evidence as noted earlier has gone unchallenged.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO.1271 OF 2014
WITH
CIVIL APPLICATION NO.3156 OF 2014
(FOR STAY)
IN
FIRST APPEAL NO.1271 OF 2014
The New India Assurance Company Limited

 Versus
Sunil Parsharam Garud

CORAM : A. S. OKA &
 REVATI MOHITE DERE, JJ.


 PRONOUNCED ON : 29th OCTOBER 2015.
Citation;2016(2) ALLMR354

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How to determine compensation in case of death of housewife in accident?

Principle for determination of loss of
dependency on account of gratuitous services rendered by a
housewife. Para 34 of the judgment in Master Manmeet Singh
(supra) is extracted hereunder:-
“34. To sum up, the loss of dependency on account of
gratuitous services rendered by a housewife shall be:-
(i) Minimum salary of a Graduate where she is a
   Graduate.
(ii) Minimum salary of a Matriculate where she is a
    Matriculate.
(iii) Minimum salary of a non-Matriculate in other
     cases.

(iv) There will be an addition of 25% in the assumed
    income in (i), (ii) and (iii) where the age of the
   homemaker is upto 40 years; the increase will be
  restricted to 15% where her age is above 40 years
 but less than 50 years; there will not be any
addition in the assumed salary where the age is
more than 50 years.
(v) When the deceased home maker is above 55 years
   but less than 60 years; there will be deduction of
  25%; and when the deceased home maker is above
 60 years there will be deduction of 50% in the
assumed income as the services rendered decrease
substantially. Normally, the value of gratuitous
services rendered will be NIL (unless there is
evidence to the contrary) when the home maker is
above 65 years.
(vi) If a housewife dies issueless, the contribution
    towards the gratuitous services is much less, as
   there are greater chances of the husband’s re-
    marriage. In such cases, the loss of dependency
   shall be 50% of the income as per the qualification
  stated in (i), (ii) and (iii) above and addition and
 deduction thereon as per (iv) and (v) above.
(vii) There shall not be any deduction towards the
personal and living expenses.
(viii) As an attempt has been made to compensate the
loss of dependency, only a notional sum which may
be upto ` 25,000/- (on present scale of the money
value) towards loss of love and affection and `
10,000/- towards loss of consortium, if the
husband is alive, may be awarded.
(ix)
Since a homemaker is not working and thus not
earning, no amount should be awarded towards
loss of estate.”



IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision:27th February, 2012

MAC. APP. No.208/2012
ICICI LOMBARD GENERAL INSURANCE CO LTD.

versus
SHRIKANT & ORS

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Whether gross income of accident victim is to be considered for computing loss of dependency for grant of compensation?

We are of the view, that on the facts and circumstances of this case, the net salary of the deceased taken by the Tribunal and the High Court for determination of loss of dependency is erroneous as it is not in accordance with the principles laid down by this Court in this regard. Therefore the same is liable to be set aside as it has to be properly determined by taking gross income of the deceased. It is clear that the gross income of the deceased at the time of his death as per his salary slip was Rs.26,000/- per month. Therefore, we are of the view that a just and reasonable compensation under the head of loss of dependency has not been determined by the courts below. Thus, the impugned judgment and order of the High Court is vitiated both on account of erroneous finding and error in law. The gross salary drawn by the deceased at the time of his death was Rs.26,000/- per month. The High Court and the Tribunal have taken the net salary at Rs.21,168/- per month, thereby the Courts below have erred in making deductions from the gross salary of the deceased towards P.T. of Rs.200/- and other statutory deductions and therefore, arriving at Rs.21,168/- per month as the net salary of the deceased is erroneous in law. Therefore, we are of the view that both the Tribunal and the High Court have erred in not following the rules laid down by this Court in Indira Srivastava’s (supra) in not taking gross income of the deceased to determine the loss of dependency.

Supreme Court of India

Yerramma & Ors vs G. Krishnamurthy & Anr on 28 August, 2014

Bench: Dipak Misra, V. Gopala Gowda

Citation;AIR 2015 SC 1145

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