Supreme Court answers Whether the entire amount under ‘Income from House Property and Agricultural Land’ should be deducted or not while computing the compensation

In a recent decision by the Supreme Court, in a matter under Motor Vehicles Act, 1988, Section 168 where a claim petition was initially filed before the tribunal claiming compensation from the insurance company. The Tribunal held that it was the driver of the Ambassador Car who was solely responsible for the crash and assigned liability for the accident to him, which ultimately was to be borne by the Insurance Company. 

The claim petition of the Deceased’s dependents was allowed partly, and compensation of Rs 4,29,37,700 was granted along with interest at the rate of 7.5% per annum in the same matter the High Court held Ambassador Car driver was solely liable for the accident but the approach of the Tribunal in respect to the computation of compensation, primarily under the head of ‘loss of income was wrong. Hon’ble Supreme in its recent ruling held that  It would be pertinent to divide the income as mentioned in the audit reports into two parts i.e. Income from Business Ventures and other Investments and Income from House Property and Agricultural Land. 

The mere fact that the Deceased’s share of ownership in businesses ventures was transferred to the Deceased’s minor children just before his death or to the dependents after his death is not a sufficient justification to conclude that the benefits of these businesses continue to accrue to his dependents. The income of the Deceased is computed by adding the amount awarded under the two parts, forty percent of the income has to be added towards future prospects, deducting  1/4th towards personal expenses. By Applying the multiplier of 16 and compensation under the remaining conventional heads the total Compensation payable to the Appellant is Rs. 2,27,12,400 with interest at the rate of 7.5% per annum. The judgment under appeal of the High Court was set aside and the Appellants were held entitled to enhanced compensation by the apex Court in its judgment.