The Punjab and Haryana High Court has held that courts must award compensation that is fair, equitable and reflective of the actual financial loss suffered by dependents in accident cases.The assertion came as the Bench enhanced by Rs 13.13 lakh the compensation payable to the family of a businessman, who died in a 2015 road accident. The direction came after the court concluded that the Motor Accident Claims Tribunal (MACT) had omitted future prospects and made an incorrect deduction towards personal expenses.Justice Deepak Gupta observed that Section 168 of the Motor Vehicles Act casts a statutory obligation on tribunals and appellate courts to award “just compensation”, which must be “fair, equitable and founded upon settled legal principles”.“The determination is neither intended to result in unjust enrichment of the claimants nor in an award which is so meagre as to defeat the beneficial object of the legislation, Justice Gupta asserted.The court added that the endeavour should be to ascertain, as nearly as possible, the actual pecuniary loss suffered by the dependents on account of the untimely death of the breadwinner by applying settled principles with uniformity and consistency.The observations came while allowing an appeal filed by the widow, two children and mother of the fatal accident victim. He was travelling from Mansa to Chandigarh, when the accident occurred on January 31, 2015. The matter was placed before Justice Gupta after they challenged only the quantum of compensation awarded by the MACT, Chandigarh. The Bench was told that the Tribunal had awarded Rs 38.35 lakh.Justice Gupta observed that the Tribunal’s findings on rash and negligent driving, as well as the finding that the offending vehicle was uninsured and that its driver and owner were jointly and severally liable, had attained finality because they were not challenged by them.Turning to the computation of compensation, the court found that the Tribunal had correctly assessed the victim’s annual income at Rs 3,97,500 on the basis of income-tax returns, but it erred in not adding future prospects.The court held that the victim was 45 years old and self-employed. As such, the claimants were entitled to a 25 per cent addition towards future prospects, taking the annual income to Rs 4,96,875.Justice Gupta also accepted the respondents’ contention that income tax had to be deducted before computing dependency, while observing that compensation under the Motor Vehicles Act was intended to compensate dependents for the actual pecuniary benefit lost due to the death of the earning member.“Compensation cannot, therefore, be calculated on that portion of the income which the deceased was under a statutory obligation to pay to the State by way of income tax,” the court said.After deducting the tax liability of Rs 24,687, the court held that the net annual income available for computing dependency was Rs 4,72,188. The High Court further held that the Tribunal had incorrectly deducted one-third of the income towards personal expenses despite the deceased leaving behind four dependents. Applying a one-fourth deduction, it recalculated the annual contribution to the family at Rs 3,54,141.The court also modified the compensation under conventional heads. “The compensation payable to the appellants-claimants is enhanced by Rs 13,13,000, over and above the amount already awarded by theTribunal. The enhanced amount shall carry interest at the rate of 7.5 per cent per annum from the date of filing of the claim petition till the date of actual realization”, Justice Gupta added.