SUPREME COURT OF INDIA
Sanjay Kishan Kaul, Abhay S. Oka, JJ.
Bebi Giri – Appellant
Versus
National Insurance Co. Limited – Respondent
Civil Appeal No. 6551 of 2022 (Arising Out of SLP(C) No. 8768 of 2018)
Decided On : 06-09-2022
Motor Vehicles Act - Compensation under Section 166 - National Insurance Company Ltd. v. Pranay Sethi & Ors, 2017(16)SCC680 - Sarla Verma (Smt) & Ors. v. Delhi Transport Corporation & Anr., 2009 (6) SCC 121
Fact of the Case:
The appellant, mother of the deceased, filed a claim petition under Section 166 of the Motor Vehicles Act, 1966 after the deceased succumbed to injuries sustained in a road accident. The Tribunal granted compensation, which was later appealed for enhancement before the High Court.
Finding of the Court:
The court found that the quantification of compensation made by the Tribunal was not consistent with the law laid down by the Constitution Bench in the case of National Insurance Company Ltd. v. Pranay Sethi & Ors, 2017(16)SCC680. The court adjusted the compensation based on the principles established in the aforementioned case and Sarla Verma (Smt) & Ors. v. Delhi Transport Corporation & Anr., 2009 (6) SCC 121.
Issues: Quantification of compensation under Section 166 of the Motor Vehicles Act, 1966 and the application of relevant legal principles for determining the compensation.
Ratio Decidendi: The court applied the principles established in National Insurance Company Ltd. v. Pranay Sethi & Ors, 2017(16)SCC680 and Sarla Verma (Smt) & Ors. v. Delhi Transport Corporation & Anr., 2009 (6) SCC 121 to adjust the compensation awarded by the Tribunal.
Final Decision: The appeal was partly allowed, and the respondent was ordered to pay the balance amount of compensation to the appellant with interest as awarded by the Tribunal within a period of three months from the date of the judgment.
ORDER
1. Leave granted.
2. Heard learned counsel appearing for the appellant and the learned counsel appearing for the respondent. The appellant is the mother of one Amit Giri ('the deceased'). On 22nd September 2011, when the deceased was travelling by auto rickshaw, a truck insured with the respondent -Insurer, gave a dash to the auto rickshaw. The deceased succumbed to the injuries sustained in the accident. Initially, a claim petition under Section 166 of the Motor Vehicles Act, 1966 was filed by the appellant and one Ashok, the father of the deceased, who died during the pendency of the claim petition.
3. The age of the deceased was about twenty-two years at the time of the accident. The Motor Accident Claims Tribunal (the Tribunal) proceeded on the basis that the income of the deceased was Rs.6,422/- per month being the minimum wages payable at the relevant time. The Tribunal granted total compensation of Rs.7,14,448/- with interest thereon at the rate of 9 per cent per annum. The appellant filed an appeal for enhancement before the High Court, which has been dismissed by the impugned judgment.
4. After having heard the learned counsel appearing for the appellant and the learned counsel appearing for the respondent, we find that the quantification of compensation made by the Tribunal is not consistent with the law laid down by the Constitution Bench in the case of National Insurance Company Ltd. v. Pranay Sethi & Ors, 2017(16)SCC680. The relevant conclusions of the Constitution Bench read thus:
'59.In view of the aforesaid analysis, we proceed to record our conclusions:
59.1.........
59.2.........
59.3 . While determining the income, an addition of 50% of actual salary to the income of the deceased towards future prospects, where the deceased had a permanent job and was below the age of 40 years, should be made. The addition should be 30%, if the age of the deceased was between 40 to 50 years. In case the deceased was between the age of 50 to 60 years, the addition should be 15%. Actual salary should be read as actual salary less tax.
59.4 . In case the deceased was self-employed or on a fixed salary, an addition of 40% of the established income should be the warrant where the deceased was below the age of 40 years. An addition of 25% where the deceased was between the age of 40 to 50 years and 10% where the deceased was between the age of 50 to 60 years should be regarded as the necessary method of computation. The established income means the income minus the tax component.
59.5 . For determination of the multiplicand, the deduction for personal and living expenses, the tribunals and the courts shall be guided by paras 30 to 32 of Sarla Verma which we have reproduced hereinbefore.
59.6 . The selection of multiplier shall be as indicated in the Table in Sarla Verma read with para 42 of that judgment.
59.7 . The age of the deceased should be the basis for applying the multiplier.
59.8 . Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs 15,000, Rs 40,000 and Rs 15,000 respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years.'
5. The Tribunal found that the appellant was selfemployed. In terms of the decision in the case of Pranay Sethi1, the High Court ought to have added 40 per cent on account of future prospects of increase in the income. The Tribunal ought to have applied multiplier of 18, as held in the case of Sarla Verma (Smt) & Ors. v. Delhi Transport Corporation & Anr., 2009 (6) SCC 121 The Tribunal awarded a sum of Rs.50,000/- towards loss of estate, a sum of Rs.1,00,000/- towards love and affection and a sum of Rs.25,000/- towards funeral expenses. The accident is of the year 2011. Therefore, the loss of estate and funeral expenses will have to be taken at Rs.15,000/- each. The appellant being the mother of the deceased, is not entitled to the amount payable on account of loss of consortium.
6. The monthly income will hav
National Insurance Company Ltd. v. Pranay Sethi & Ors
Sarla Verma (Smt) & Ors. v. Delhi Transport Corporation & Anr.
The calculation of compensation under the Motor Vehicles Act, 1988 is based on the deceased's actual income, future prospects, and multiplier as per relevant case laws.
Compensation calculations in motor accident claims must include allowances and future prospects, with appropriate multipliers based on the deceased's age.
Future income prospects must be considered in compensation calculations, and the appropriate multiplier should reflect the deceased's age and established legal guidelines.
The court established that compensation for a deceased must consider the age-based multiplier and future prospects, enhancing the total amount awarded.
There is no justification for the learned Tribunal to award interest from date of filing the evidence on affidavit.
The main legal point established in the judgment is the proper calculation of compensation under Section 166 of the Motor Vehicles Act, 1988, including the consideration of future prospects, personal....
Compensation for motor accident claims must reflect actual income and future prospects, applying appropriate multipliers as established in case law.
The main legal principle established in the judgment is the standardization of addition to income for future prospects and the need for uniformity and consistency in determining compensation in motor....
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