FIXING OF HIGHEST SLAB FOR ARRIVING OF ANNUAL INCOME FOR A PERSON IN MOTOR ACCIDENTS CLAIMS TRIBUNAL

FIXING OF HIGHEST SLAB FOR ARRIVING OF ANNUAL INCOME FOR A PERSON IN MOTOR ACCIDENTS CLAIMS TRIBUNAL

When a person dies in a motor vehicle accident, his legal heirs, or when a person sustains injury in a motor vehicle accident, can claim compensation in motor vehicles claims tribunal. They can claim compensation against the insurance company in which the vehicle in question has been insured at the time of accident. The court enquires, and award compensation.

Fixing of highest slab for arriving of annual income for a person in motor accidents claims tribunal. It is clearly discussed in Chinnathamani Vs Amman granites, Harur town & taluk, Dharmapuri dt (DB) 2019(2) TNMAC 293.

Annual income – fixation of – structured formula in second schedule, introduced in year 1994, fixing highest slab at Rs.40,000/ pa – second schedule not amended depending upon cost of living as required by section 163 A(3) – central government though failed to amend the same, tribunal bound to consider cost of living for fixing compensation by applying consumer price index announced by central government from time to time – consumer price index is a statistical estimate and annual percentage change in consumer price index used as a measure of inflation – consumer price index can be used as a measure of inflation – consumer price index can be used to determine income of a person based on income mentioned in second schedule – section 48 of income tax act defines cost inflation index as what is notified by central government every year as 75% of consumer price index for urban non salaried employees for immediate preceding previous year – If consumer price index is 100 last year, cost inflation index will be fixed for current year as 75 – cost inflation index issued by central board of direct taxes (CBDT) for years 1981-82 to 2018-19 which is 75% of consumer price index of previous year taken into account – high court accordingly evolved formula to determine early income – For illustration, income for year 2017-2018 can be determined as under

Income as mentioned in second schedule (Rs.40,000	Cost inflation index for the year 2017-2018 (1158)	100/75	Rs.2,38,455/
	Cost inflation index for the year 1994-1995 (259)

Rs.2,38,455 arrived at under said formula rounded off to Rs.2,40,000/. Therefore for the year 2017 – 18, a sum of Rs.40,000/pa as shown in second schedule for year 1994 – 1995 to be revised to Rs.2,40,000/pa. Motor vehicles act 1988 (59 of 1988), sections 163 A, 163 A(3)