The Supreme Court on Tuesday issued guidelines on considering the future prospects of a person killed in a road accident while deciding on compensation to be paid to dependents under the Motor Vehicles Act, Live Law reported.

The five-member Constitution Bench comprised Chief Justice Dipak Misra and Justices AK Sikri, AM Khanwilkar, DY Chandrachud and Ashok Bhushan. The judges were hearing a batch of petitions to better understand what the addition, with regard to future prospects, must be when the accident victim was self-employed or was paid a fixed salary without provision for annual increment.

The Supreme Court said that Section 168 of the Act deals with “just compensation”. Though the compensation can never be perfect, it must be fair, the court said. “The conception of just compensation has to be viewed through the prism of fairness, reasonableness and non-violation of the principle of equitability,” the judges said.

Irrespective of whether the accident victim is salaried or not, they should benefit from “future prospects”, the court said. Fixing the standard, the court said that if the accident victim had a permanent job and is below 40 years of age, 50% of the actual salary would be added as future prospects to determine the income. If the victim was between 40 and 50 years, it would be 30%, and the addition should be 15% if the deceased was between 50 and 60 years of age, the judges said.

Similarly, if the victim was self-employed or on a fixed salary and below 40 years of age, 40% of the established income would be added as future prospects. If they were between 40 and 50 years of age, the addition would be of 25%, and it would be 10% if the victim was between 50 and 60 years of age, the court ruled.

“In a case of death, the legal heirs of the claimants cannot expect a windfall,” the court added. “Simultaneously, the compensation granted cannot be an apology for compensation. It cannot be a pittance.”

Regarding the fixation of future prospects, the court said that not adding any amount with regard to future prospects of income for the purpose of determining a multiplicand would be unjust. “The determination of income while computing compensation has to include future prospects so that the method will come within the ambit and sweep of just compensation as postulated under Section 168 of the Act.”