Case Title:- Tharunoju Eshwaramma & Ors. vs. K. Ram Reddy & Anr.
Citation:- SLP(Civil) – 8656/2023
Date:- 07.10.2025
Hon’ble Supreme Court Bench:- JUSTICE RAJESH BINDAL and JUSTICE MANMOHAN
The Hon’ble Supreme Court has referred to a larger Bench the question of how to assess compensation in motor accident cases where the deceased was employed in a foreign country, in view of divergent judicial precedents on whether income earned abroad should be moderated before applying standard deductions and multipliers.
- The present case involved Hari Shankar Brahma, a 27-year-old System Analyst in New Jersey, USA, who died in a road accident in 2009. He earned USD 47,050 per year (around ₹21 lakh) while working for Nihaki Systems Inc.
- The Motor Accident Claims Tribunal awarded ₹63 lakh compensation based on his full income, deducting 40% for personal expenses and applying a multiplier of 5. However, the Hon’ble Telangana High Court reduced his income to ₹7 lakh per year, saying he was a contractual worker, and then applied a 50% personal deduction and a multiplier of 17 to award ₹83.63 lakh. The deceased’s family appealed, arguing that the Hon’ble High Court wrongly applied a “double deduction” first by cutting his foreign income drastically and then deducting half for personal expenses.
- The Hon’ble Supreme Court noted that there are two opposing views in earlier judgments on how to treat income earned abroad.
- One set of rulings says foreign income should be accepted as it is, with only standard deductions under Pranay Sethi case. Another set (like Chanderi Devi and Deo Patodi) says foreign salaries should be reduced to match Indian living standards before calculating compensation.
- The Bench of Justice Rajesh Bindal and Justice Manmohan said this issue has “wide implications” since many Indians now work overseas, especially in the IT sector.
- The Hon’ble Court observed that there needs to be clarity on whether moderation of foreign income is fair, considering cost of living abroad, remittances sent to India, and whether the family lived in India or abroad.
- The matter will now go to the Chief Justice of India for setting up a larger Bench to decide how compensation should be calculated in such cases.
