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Deduction in mishap claims may vary: SC

While determining road accident claims, the amount to be deducted on account of personal and living expenses of the victim may vary as per the number of the dependents, the Supreme Court has held. 

The apex court also held that in such accident cases where deceased is aged below 40 and had a permanent job, an addition of 50 per cent of the actual salary should be made towards future prospects to the current income. 

A three-judge bench headed by Justice R M Lodha observed that a proportion of a man's earning, which he saves or spends exclusively for maintenance of others, does not form a part of his "living expenses". 

"One must bear in mind that the proportion of a man's net earnings that he saves or spends exclusively for maintenance of others does not form part of his living expenses but what he spends exclusively on himself does.

"The percentage of deduction on account of personal and living expenses may vary with reference to the number of dependant members in the family...," the bench, also comprising Justices J Chelameswar and Madan B Lokur, said. 

The apex court also held that in such accident cases where deceased is aged below 40 and had a permanent job, an addition of 50 per cent of the actual salary should be made towards future prospects to the victim's current income. 

"We approve the method that an addition of 50 per cent of actual salary be made to the actual salary income of the deceased towards future prospects where the deceased had a permanent job and was below 40 years and the addition should be only 30 per cent if the age of the deceased was 40 to 50 years and no addition should be made where the age of the deceased is more than 50 years," the bench said.

The judgement came on an appeal wherein a two judge bench of the apex court had referred to the larger bench the issue of whether the multiplier specified in the Motor Vehicles Act 1988 should be taken as the guide for calculation of amount of compensation payable in such cases. 

The two judge bench, in its referral order passed on July 23, 2009, had said due to the "divergence of opinion" and this aspect of the matter having not been considered in the earlier decisions, the issue shall be decided by a larger bench. 

 Article referred: http://zeenews.india.com/news/nation/deduction-in-mishap-claims-may-vary-sc_848030.html

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