A Supreme Court five-judge Constitution bench on Tuesday issued guidelines on calculation of future prospects to determine compensation in motor accident claims.
A Supreme Court five-judge Constitution bench on Tuesday issued guidelines on calculation of future prospects to determine compensation in motor accident claims. A five-judge bench led by Chief Justice Dipak Misra, which is resolving the conflicting views in the case National Insurance Company Limited vs Pranay Sethi and others, laid down guidelines for courts and tribunals to follow. Settling the controversy on what should be the addition as regards the future prospects where the deceased was self-employed, or was a person on fixed salary without provision for annual increment etc, it said that the concept of “just compensation” under Section 168 of the Motor Vehicles Act has to be determined on the foundation of fairness, reasonableness and equitability on acceptable legal standard, because such determination can never be in arithmetical exactitude.
“Though the discretion vested in the tribunal is quite wide, yet it is obligatory on the part of the tribunal to be guided by the expression, that is, just compensation,” it said. The apex court held that persons, whether salaried employees or self-employed, should get the benefit of such future prospects. “The purchasing capacity of a salaried person on permanent job when increases because of grant of increments and pay revision or for some other change in service conditions, there is always a competing attitude in the private sector to enhance the salary to get better efficiency from the employees. Similarly, a person who is self-employed is bound to garner his resources and raise his charges/fees so that he can live with same facilities.
To have the perception that he is likely to remain static and his income to remain stagnant is contrary to the fundamental concept of human attitude which always intends to live with dynamism and move and change with the time,” it said. Approving the principle of “standardization” so that a specific and certain multiplicand is determined for applying the multiplier on the basis of age, it said that the tribunal and the courts have to bear in mind that the basic principle lies in pragmatic computation and uniformity of approach. “As far as future prospects are concerned, there has been standardization keeping in view the principle of certainty, stability and consistency,” it added.