Self employed,unorganised entitled to higher compensation: SC

“In our view,it will be naive to say that the wages or total emoluments/income of a person who is self-employed or who is employed on a fixed salary without provision for annual increment etc. would remain the same throughout his life.

The rise in the cost of living affects everyone across the board. It does not make any distinction between rich and poor,Justice Singhvi,writing the judgement,said.

The apex court passed the ruling while enhancing the compensation amount by Rs 1.40 lakh to a woman Santosh Devi whose husband was killed in a road accident in Punjab in 1995.

The Motor Accident Claims Tribunal,Gurdaspur(MACT) had pegged the compensation at 1,32,000/- with interest at the rate of 12 per cent per annum from the date of application,which was upheld by the Punjab and Haryana High Court,following which Devi had appealed in the apex court.

Both the lower courts had relied upon an earlier judgement of the apex court in the Sarla Verma case (2009) to state that the family was not entitled to a higher compensation as the deceased was self-employed. The two courts had also held that the two sons of the deceased cannot be treated as dependent as they were majors.

Rejecting the argument,the apex court said,”Although the legal jurisprudence developed in the country in the last five decades is somewhat precedent-centric,the judgements which have bearing on socio-economic conditions of the citizens and issues relating to compensation payable to the victims of motor accidents,those who are deprived of their land and similar matters needs to be frequently revisited keeping in view the fast changing societal values,the effect of globalisation on the economy of the nation and their impact on the life of the people.”

The bench rejected the reasoning that unlike others employed in government or private sectors there would not be the anticipated 30 per cent increase in the salaries of the self-employed or unorganised labour.

“As a matter of fact,the effect of rise in prices,which directly impacts the cost of living,is minimal on the rich and maximum on those who are self-employed or who get fixed income/emoluments. They are the worst affected people.

“Therefore,they put extra efforts to generate additional income necessary for sustaining their families.

“Rather,it would be reasonable to say that a person who is self-employed or is engaged on fixed wages will also get 30 per cent increase in his total income over a period of time and if he/she becomes victim of accident,then the same formula deserves to be applied for calculating the amount of compensation,” the bench said.

The apex court found fault with the MACT for taking the view that the two sons of the appellant Sulakhan Singh and Surjit Singh cannot be treated as dependants of the deceased because their age was 26 years and 23 years respectively.

“The Tribunal’s observation that the two sons of the appellant cannot be treated as dependants on their father because they were not minor is neither here nor there.

“In the cross-examination of the appellant,no question was put to her about the source of sustenance of her two sons.

“Therefore,there was no reason for the Tribunal to assume that the sons who had become major can no longer be regarded dependant on the deceased,” the apex court said.

The bench also had a dig at the Tribunal and the high court for taking a view that the deceased would have spent 1/3rd of his income on himself if he was alive and hence the compensation should be fixed on that basis.

“It seems that the Presiding Officer of the Tribunal and the learned judge of the High Court were totally oblivious of the hard realities of the life.

“It will be impossible for a person whose monthly income is Rs.1,500/- to spend 1/3rd on himself leaving 2/3rd for the family consisting of five persons.

“Ordinarily,such a person would,at best,spend 1/10th of his income on himself or use that amount as personal expenses and leave the rest for his family.

“Thus,the total amount payable to the claimants will be Rs 3,19,840/-. The enhanced amount of compensation i.e. Rs. 1,42,340/- (Rs.3,19,840 – Rs. 1,77,500) shall carry interest of 7 per cent from the date of application till realisation,” the bench said.