SC order over compensation in road accidents

SC order over compensation in road accidents

While calculating compensation in road accident cases, a 30 per cent increase would necessarily be computed in the total income of the victim even though he/ she is self-employed or working in unorganised sector, the Supreme Court has held.

A Bench of Justices G S Singhvi and S J Mukhopadhaya said that the rise in the cost of living affected everyone across the board without making any distinction between rich and poor. In a significant verdict, the Bench further explained the Sarla Verma’s case in which the apex court had held that where the deceased was self-employed or worked on a fixed salary (without provision for annual increments, etc.), the courts would usually take only the actual income at the time of death in arriving at the compensation and a departure from this rule, should be made in exception circumstances only.

“We find it extremely difficult to fathom any rationale for the observation made in the judgment in Sarla Verma’s case.

In our view, it will be naïve 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 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,” Justice Singhvi, , said.

Although, the wages of those employed in unorganised sectors has not registered a corresponding increase, but it cannot be denied that there has been an incremental enhancement in the income of those who are self-employed and even those engaged on daily/montly/seasonal basis, the court added.

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