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HC on adopting revised salary to arrive at compensation

Madras High Court Bench has ruled that if the pay revision for an employee who died in a mishap comes into effect from the date when that person was alive, then adoption of revised salary for arriving at compensation cannot be said to be illegal.

The addition of 30 per cent towards future prospects was also correct as the deceased, in this case a professor, was 46 years old when he died. "If the age is between 40 and 50, addition of income for future prospects should be 30 per cent. The trial court is correct in fixing the compensation," Justices V Ramasubramanian and V M Velumani said.

Prof. Ramaswamy died in a road mishap on July 10 2006.

The tribunal took into account that though the Professor's last drawn pay was Rs 29,320, the Sixth Pay Commission's recommendations were implemented from Jan 1 2006. It then fixed his last drawn salary as Rs 49,710 and arrived at a compensation of Rs 58,89,652.

The New India Assurance company assailed the finding, saying the Commission's recommendations of Mar 2008 were implemented only in 2009, much after the death of the victim.

However the Judges said this could not be accepted as the salary had been revised with retrospective effect from Jan 1 2006. Therefore the claimants would have received the arrears arising out of such revision for Jan 1-Jul 10 2006 period.

They were also entitled to add 30 per cent towards future prospects. Besides the Multiplier should have been 13 (13 more years of service) and not 12, as the petitioner was 46 years old, the Judges said and awarded total compensation of Rs 63,61,907 with 7.5 per cent interest.

The judges said the money should shared among the three claimants equally.

 Article referred: http://www.business-standard.com/article/pti-stories/hc-on-adopting-revised-salary-to-arrive-at-compensation-114051600125_1.html

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