Motor Accident Claim: Future Prospects Should Be Allowed If Notional Income Is Present: Mulchand Dhanji Shah & Anr V Mr Noordamiraj Ahmad &Ors

DATE OF JUDGMENT:
10/01/2022

BENCH:
JUSTICE MR. N.J. JAMANDAR

PARTIES:
PETITIONER: MR. MULCHAND DHANJI SHAH & MRS. RAJANBEN
MULCHAND SHAH
RESPONDENT: MR. NOORDAM IRAJ AHMED, MR. SKRAJ DEHRI
S. YADAV & THE ORIENTAL INSURANCE COMPANY
LTD.

SUBJECT

Under Section 166 of the Motor Vehicles Act, 1988, the person who is involved in road accidents can claim compensation. The Apex Court explained the eligibility of a person to claim compensation under section 166 of the Motor Vehicles Act.

LEGAL PROVISION

Section 166 of the Motors Vehicle Act, 1988 - This section includes provisions for who all can apply for compensation in the Motor Accident Claims Tribunal (MATC) in case they get involved with a road accident.

OVERVIEW

1. The Tribunal received an Application under Section 166 of the Vehicle Vehicles Act, 1988 from the dependents of a 24-year-old deceased in a motor accident, accompanied with the deceased's IT return for the Assessment Year 2000-01.
2. The driver of the offending car was ordered to pay Rs. 3,20,000 in damages because of his aggressive and irresponsible driving. A Bombay High Court appeal was filed by the claimants who disputed the amount of compensation they were entitled to. The Applicants' testimony was examined by the Tribunal.
3. It ruled that the applicants' claims for compensation were based on insufficient evidence of the deceased's income. The evidence was declared inadmissible because it was an invisible replica of the IT returns for the year 2000-01. There was no proof of the sort of company, its ownership structure, a form of proprietorship, and licensing requirements provided by the Applicants.
4. There was insufficient evidence to support the assertion that the deceased was a 24-year-old sole-proprietor of a paper business and the sole earner for the family. Accordingly, the Tribunal estimated the deceased's annual income at Rs. 3000/-.
5. The loss of reliance was estimated at Rs. 3,20,000 by subtracting half of this amount from personal costs and multiplying it by 17. According to the Tribunal, burial expenditures were increased by Rs. 4000, and love and devotion were increased by Rs. 10,000.
6. However, the Tribunal's decision on the appropriateness of the award's monetary value remained an open question. The offending vehicle's reckless and irresponsible driving was found by the Bombay High Court to be grounds for compensation.
7. To put the dependents back in the same situation they would have been in had the breadwinner not been killed in the accident, the Court interpreted the applicable S. 166 of the Motor Vehicles Act.

ISSUE

1. Whether the applicants are entitled to receive the compensation?
2. Whether or not the determination of multiplicand and the use of multiplier are justified?

JUDGMENT ANALYSIS

1. The Tribunal's estimation of hypothetical income, based on its evaluation of the deceased's and applicants' situations, was reprimanded by the Court. Even though the goal of the law was to provide fair compensation, rigorous requirements of proof were not required to determine it.
2. Accordingly, despite the lack of sufficient proof, the Tribunal should have determined that a paper company would have reasonably earned an amount in excess of Rs. 100/- per day in 2004 based on the nature of the avocation. In addition, the Tribunal should have examined the applicant's assertion that he earned $48,000 per year from 2000-01 IT return, which he submitted.
3. The notional revenue would thus be Rs. 60,000/- per year on a conservative estimate. Kirti and Ors. V. Oriental Insurance Co. Ltd, a Supreme Court decision cited by the Court, was cited to hold that due to the "failure to provide evidence supporting an income determination, the lowest tier of minimum wage was used during income computation."
4. The Court determined that Rs. 30,000/- per year was the amount of personal income that may be deducted. Applying the Supreme Court's finding in Hem Raj v. Oriental Insurance Co. Ltd. &Ors to situations with insufficient proof, the Court held that "future possibilities" should be permitted for individuals with notional income, too. Because of this, the Court calculated an extra payment of Rs. 12,000.
5. As a result, Rs. 42,000/- was judged to be the multiplicand. As a result of the deceased's age, a Court multiplier was increased from the Tribunal's 17 to 18.
6. The loss of dependent was valued at Rs. 7,56,000/- by the Court. Following Pranay Sethi, the Court added further standards for loss of estate, burial costs, and compensation for each applicant's kin. The Court partially amended the Tribunal's Order after taking into account all of the costs.
7. The Court thus ordered the respondents to pay Rs. 8,66,000/- plus interest at 7.5 percent per annum from the date of application to realization, to the applicants less any compensation, which has already been deducted from that amount.

CONCLUSION

Section 166 of the Act specifies who is eligible to file a claim for compensation under Section 165 in MACT instances. It can be done by the individual who was hurt. According to the property owner of the location where the fatal car accident occurred, all or any of the deceased's heirs or legal agents may file a claim for damages. All or any of the deceased's legal representatives, or an agent lawfully authorized by either the victim or their legal representatives may file a claim. In this case, appellants proved that they are entitled to receive compensation from the opponents, and reviewing the said arguments by both the counsels of the parties, the Court stated that the appellants are entitled to receive the compensation.

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