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Anjali vs. Lokendra Rathod

Civil Appeal · 2022 INSC 1258Decided 6 Dec 2022
Civil Appeal No. 9014 of 2022
Krishna Murari · Bela M. Trivedi

Background

Rajesh, a 28-year-old scrap business owner, died after a bus driven rashly and negligently crashed into the car he was travelling in. He was survived by two wives, three children, and his parents (seven dependents). The Claims Tribunal fixed his income at just Rs. 4,000 per month (calling him a "skilled labourer") and awarded Rs. 6,24,000; the High Court raised his income to Rs. 5,000 per month and the compensation to Rs. 11,41,000. The family appealed, arguing the income and several compensation heads were still too low.

Decision Breakdown

The Supreme Court held that both the Tribunal and the High Court wrongly ignored the deceased's Income Tax Return, which is a statutory document that should be relied upon when available, and fixed his actual monthly income at about Rs. 9,855 (per the ITR) instead of the arbitrarily low figures used below. Since there were seven dependents, the Court applied the correct 1/5th (not 1/4th) deduction for personal expenses per the Sarla Verma and Pranay Sethi precedents, retained the 40% future-prospects addition already allowed by the High Court, and added a 10% enhancement to the conventional heads (funeral expenses, loss of estate, consortium) as mandated by Pranay Sethi. This raised the total compensation to Rs. 25,91,388, with interest increased to 9% per annum in line with a more recent three-judge bench ruling.

Lesson Learnt

When a deceased person's Income Tax Return is on record, courts must use it as the primary basis for calculating lost income rather than guessing a lower figure, and the standard deductions and add-ons for personal expenses, future prospects, and conventional compensation heads must be applied strictly per the number of dependents and the Supreme Court's settled formulas (Sarla Verma/Pranay Sethi), not left to ad hoc discretion.

Official source (sci.gov.in)View Judgment (PDF)

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