1. The captioned appeals arise from the Award dated 10.02.2017 in O.P.(MV) No.465/2011 passed by the Motor Accidents Claims Tribunal, Punalur.

2. MACA No.564/2018 has been preferred by the legal heirs of the deceased, who were the claimants before the Tribunal, aggrieved by the inadequacy of the compensation awarded, the fixation of the deceased's monthly income, and the deductions made based on the number of dependents.

3. MACA No.902/2018 has been preferred by the insurer, primarily challenging the fixation of the deceased's monthly income, the addition of future prospects, and the amounts awarded under the heads of “compensation for loss of love and affection” and “compensation for loss of consortium”.

4. The short facts of the case are as follows: The claim petition was filed under Section 166 of the Motor Vehicles Act before the Tribunal by the dependents of the deceased, Selvaraj, who was aged 39 years and was a wholesale textile merchant. On the date of the accident, while the deceased was riding his motorcycle bearing Registration No. TN-72-4B-3013 along the Kollam–Thirumangalam Public Road from east to west, and when he reached in front of the Laark Building at Ottakkal, a lorry bearing Registration No. KL-26-B-116, coming from the opposite direction, hit the motorcycle. Due to the impact of the collision, the deceased was thrown down the road and sustained serious injuries. Though he was immediately taken to the hospital, he succumbed to the injuries on the very same day.

5. The first respondent was the owner of the offending vehicle, the second respondent was the driver of the lorry, and the third respondent was its insurer. The accident occurred solely due to the negligence of the second respondent in driving the offending lorry. The claimants claimed compensation of Rs.75 lakhs for the death of Selvaraj.

6. The first and second respondents were set ex parte. The third respondent entered appearance and filed a written statement admitting that the offending vehicle was insured with it against third-party risks and that the insurance policy was in force on the date of the accident. However, the third respondent denied the contention that the accident occurred due to the negligence of the second respondent. On the contrary, it was contended that the accident occurred due to the negligence of the deceased himself, who, while attempting to overtake another vehicle, hit the lorry coming from the opposite direction.

7. On considering the rival contentions, the Tribunal framed issues regarding the cause of the accident, the entitlement of the claimants to compensation, and the quantum of compensation. The Tribunal examined PW1, the Income Tax Officer, and marked Exts.A1 to A13. On the basis of Exts.A1, A2, A3, A4, and A6, and in the absence of any evidence to discredit Ext.A6 charge sheet, the Tribunal concluded that the accident occurred solely due to the negligence of the second respondent. The Tribunal further held that the death of Selvaraj was the direct result of the injuries sustained in the accident, as evidenced by Ext.A5 post-mortem certificate.

8. The primary contention advanced by the learned counsel for the claimants relates to the deduction of one-third, instead of one-fourth, towards the personal and living expenses of the deceased. It is submitted that, after passing the Award, the Tribunal considered I.A. No.344/2017 in O.P.(MV) No.465/2011. While allowing the said application, the Tribunal observed that, despite sufficient opportunity having been granted, none of the claimants had filed any objection. When the matter was taken up for consideration, the learned counsel appearing for the claimants submitted that he had no objection to allowing the application. In view of the said submission, the Tribunal did not examine the other legal aspects arising from the application and proceeded to allow it. Consequently, the Tribunal deducted one-third, instead of one-fourth, towards the personal and living expenses of the deceased.

9. The learned counsel for the claimants contended that the counsel who made the submission before the Tribunal had not been specifically instructed by the claimants to make such a submission. It was argued that a counsel is not empowered to advance arguments which was not specifically entrusted by the claimants. It was further contended that the alleged submission recorded in I.A. No.344/2017 is contrary to the settled legal principles laid down by the Apex Court in Kirti and Another v. Oriental Insurance Com𝕛any Ltd [2021 (1) KHC 196 (SC)]. In paragraph 10 of the said decision, the Apex Court held that "the subsequent death of the deceased's dependent mother ought not to be a reason for reduction of motor accident compensation. Claims and legal liabilities crystallise at the time of the accident itself and changes thereafter ought not to ordinarily affect pending proceedings." In the above circumstances, it was contended that the Tribunal committed an error in deducting one-third, instead of one-fourth, towards the personal and living expenses of the deceased.

10. It is further contended that the Tribunal erred in fixing the monthly income of the deceased at Rs.15,000/-, even after the claimants proved his income by producing Exts.A12 and A13 and by examining PW1, the Income Tax Officer. According to Ext.A12, the assessed income of the deceased for the Assessment Year 2009–10 was Rs.3,80,240/-, on which income tax of Rs.33,000/- was paid. Thus, the net annual income for the said assessment year comes to Rs.3,47,240/- (Rs.3,80,240/- − Rs.33,000/-). Similarly, for the Assessment Year 2010–11, during which the accident occurred, the gross annual income of the deceased was assessed at Rs.4,31,508/-, on which income tax of Rs.33,800/- was paid. Accordingly, the net annual income for the said assessment year comes to Rs.3,97,708/- (Rs.4,31,508/- − Rs.33,800/-). It is pertinent to note that the accident occurred on 26.03.2011, during the Financial Year 2010–11, corresponding to the Assessment Year 2011–12.

11. The learned counsel for the claimants further contended that the income assessed for the relevant assessment year ought to have been adopted for determining the compensation, in the light of the decisions of the Apex Court in Kal𝕛anaraj and others v. Tamil Nadu State Trans𝕛ort Cor𝕛oration [(2015) 2 SCC 764], Malarvizhi and others v. United India Insurance Com𝕛any Ltd and another [2020 (1) KHC 526 (SC)] and Vishnu Ganga S v. M/s Oriental Insurance Com𝕛any Limited [2025 KHC 6082]. It was submitted that the net annual income of the deceased should be arrived at by deducting the income tax payable from the gross annual income disclosed in the income tax records. Accordingly, it was contended that the income declared for the relevant assessment year ought to have been adopted for computing the compensation.

12. It was further contended that all the claimants are entitled to compensation under the head of consortium, including parental consortium, in accordance with the settled principles of law.

13. On the other hand, the learned counsel for the insurer contended that the Tribunal erred in fixing the monthly income of the deceased at Rs.15,000/-. It was submitted that the deceased was carrying on business and that his income could not have been determined solely on the basis of the income tax returns for two assessment years produced by the claimants. According to the learned counsel, the Tribunal, in effect, fixed a notional monthly income of Rs.15,000/-, which is contrary to the settled principles governing the assessment of income.

14. It was further contended that, in the light of the decision of the Apex Court in National Insurance Co. Ltd. v. Pranay Sethi [(2017) 16 SCC 680], the Tribunal committed an error in adding 50% towards future prospects. Since the deceased was 39 years of age at the time of the accident, the appropriate addition towards future prospects ought to have been 40%.

15. Another contention before this Court was that the Tribunal committed an error in awarding compensation under the head of “loss of love and affection”, which has been specifically deprecated by the Apex Court in Pranay Sethi (supra). It was also submitted that the Tribunal erred in awarding Rs.1,00,000/- under the head of “loss of consortium”, as the claimants are entitled only to the amount prescribed under the settled legal principles, i.e., Rs.48,000/- for each claimant. The insurer further disputed both the quantum awarded under the head of consortium and the number of claimants entitled to the said compensation.

16. Heard Sri. Anchal C. Vijayan, learned counsel for the claimants in MACA 564/2018, and Sri. P. Jacob Mathew, learned counsel for the insurer in MACA 902/2018.

17. On consideration of the facts and circumstances of the case, the primary issue that arises for consideration is the order passed by the Tribunal allowing I.A. No.344/2017 in O.P.(MV) No.465/2011 after the Award, based on the concession allegedly made by the learned counsel appearing for the claimants.

18. The legal position in this regard stands settled by the decision of the Apex Court in Kirti (supra). The subsequent death of a dependent after the filing of the claim petition is inconsequential for the purpose of determining compensation. The Apex Court has categorically held that the subsequent death of the deceased's dependent ought not to be a reason for reducing the motor accident compensation, as the rights of the parties and the corresponding liabilities crystallise on the date of the accident, and subsequent events ordinarily do not affect pending proceedings. In the above circumstances, the order dated 28.11.2017 in I.A. No.344/2017 in O.P.(MV) No.465/2011 is liable to be set aside.

19. With regard to the contention relating to the income of the deceased, this Court has taken note of the principles laid down in Kal𝕛anaraj (supra), Malarvizhi (supra), and Vishnu Ganga (supra). In the aforesaid decisions, the Courts have held that where the income of the deceased is established through income tax returns, the net annual income is to be determined by deducting the income tax payable from the gross annual income disclosed therein. The common principle adopted from these decisions is that the net income, after deducting the income tax paid, should be adopted for the purpose of computing compensation.

20. In the present case, as contended by the learned counsel for the claimants, the average of the net incomes disclosed in the income tax returns for the two consecutive assessment years can be adopted for determining the annual income of the deceased. The average of Rs.3,47,240/- (Rs.3,80,240/- − Rs.33,000/-) for the Assessment Year 2009–10 and Rs.3,97,708/- (Rs.4,31,508/- − Rs.33,800/-) for the Assessment Year 2010–11 works out to Rs.3,72,474/- per annum.

21. The annual income of the deceased is, therefore, fixed at Rs.3,72,474/-. Since the deceased was self-employed, only 40% is liable to be added towards future prospects, in terms of Pranay Sethi (supra), and not 50% as adopted by the Tribunal. The appropriate multiplier applicable is “15”. Accordingly, after adding 40% towards future prospects, the annual income of the deceased for the purpose of computation works out to Rs.5,21,463.60.

22. Since the annual income of the deceased, after adding 40% towards future prospects, has been determined at Rs.5,21,463.60, the compensation payable towards “loss of dependency” is to be computed by applying the multiplier of “15” and deducting one-fourth towards the personal and living expenses of the deceased. Accordingly, the compensation under the head of loss of dependency is calculated as:

                  Rs.5,21,463.60 x 15 x 3/4 =Rs.58,66,465.50.

                  The deduction of one-fourth is appropriate, as there were four dependants at the time of the accident, and the subsequent death of one of the dependants does not affect the determination of compensation, the rights of the parties having crystallised on the date of the accident.

23. The claimants claimed Rs.45,000/- towards funeral expenses. However, the Tribunal awarded only Rs.25,000/- under the said head. In view of the principles laid down in Pranay Sethi (supra), the claimants are entitled only to an amount of Rs.18,000/- under the head “funeral expenses”. Accordingly, the compensation awarded under the said head is re-fixed at Rs.18,000/-.

24. The award of compensation under the head “loss of love and affection” is unsustainable, as the said head has been deprecated by the Apex Court in Pranay Sethi (supra). Accordingly, the compensation awarded under the said head is set aside.

25. With regard to “loss of consortium”, the Tribunal awarded a consolidated sum of Rs.1,00,000/-. However, each of the four claimants is entitled to consortium at Rs.48,000/-, and therefore the compensation under the said head is re-fixed at Rs1,92,000/- (Rs48,000/- × 4).

26. Similarly, the Tribunal awarded only Rs.15,000/- towards “loss of estate”. In terms of Pranay Sethi (supra), the amount payable under the said head is Rs.18,000/-. Accordingly, the compensation under the head “loss of estate” is enhanced to Rs.18,000/-.

27. In such circumstances, the impugned Award is modified to the following extent:

                 

28. In the result, both the appeals are disposed of. The order dated 28.11.2017 in I.A. No.344/2017 in O.P.(MV) No.465/2011 is set aside.

29. The compensation awarded by the Tribunal is enhanced by a further sum of Rs.28,16,965.50 (Rupees Twenty Eight lakhs Sixteen thousand Nine hundred and Sixty Five and Fifty paise only), together with interest on the enhanced amount at the rate awarded by the Tribunal, from the date of the claim petition till the date of deposit.

30. The third respondent/insurer shall deposit the enhanced compensation, together with interest and proportionate costs, before the Tribunal within a period of three months from the date of receipt of a certified copy of this judgment. The remaining terms and conditions of the Award shall stand sustained.

31. Taking note of the submission made by the learned counsel for the insurer that there was a delay of 286 days in filing the appeal, the claimants shall not be entitled to interest on the enhanced compensation for the said period of delay.