1. Motor vehicle accident resulting in death — Claim for compensation under Motor Vehicles Act — Dispute over income assessment and dependency. (Para 3 , 4 )
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2025 Supreme(SC) 1031
SUPREME COURT OF INDIA
Sanjay Karol and Prashant Kumar Mishra, JJ.
Sadhana Tomar & Others – Appellant
Versus
Ashok Kushwaha & Others – Respondents
Civil Appeal No. 3763 of 2025: arising from Special Leave Petition (Civil) No. 6986 of 2023 against the judgment dated 19.9.2022 passed by the High Court of Madhya Pradesh at Gwalior in Miscellaneous Appeal No. 5231 of 2018
Decided on : 24-01-2025
The court established that compensation for loss of dependency must consider the deceased's potential income and appropriate deductions based on the number of dependents, affirming a broader interpretation of legal representatives under the Motor Vehicles Act.
Headnote:
(1) Motor Vehicles Act, 1988 -- Ss. 166 and 168 -- assessment of income -- deceased aged 24 years -- was doing wholesale business of selling fruits -- vide Notification of 2016 under Minimum Wages Act, 1948, income for unskilled worker was fixed at Rs. 6,500/- p.m. -- annual income of deceased comes to Rs. 78,000/- -- multiplier of 18 correctly applied -- father and younger sister of deceased, both not financially independent, would fall under definition of legal representative -- deduction towards personal expenses of deceased should be 1/4th as number of dependent family members is five -- driver and owner of offending vehicle liable to pay compensation as driver did not possess effective driving licence -- insurance company to first pay compensation and then recover the same from them -- compensation enhanced. 2018 (1) JLJ 200 (SC), (2023) 1 SCC 204, (1987) 3 SCC 234 and (2022) 14 SCC 712 relied on. (2004) 3 SCC 297 referred to. [Paras 11 to 16
(2) Motor Vehicles Act, 1988 -- S. 166 -- legal representative -- is one who suffers on account of death of person due to motor vehicle accident -- need not necessarily be wife, husband, parent or child -- it is sufficient for claimant to establish his loss of dependency -- father and younger sister of deceased, both not financially independent, would fall under definition of legal representative. (1987) 3 SCC 234 and (2022) 14 SCC 712 relied on. [Paras 13 to 15
Legal Category Hierarchy
Table of Contents
2. Challenge to the determination of monthly income of the deceased and the proportion of deduction for personal expenses based on the number of dependents. (Para 6 , 8 )
3. Assessment of income based on minimum wage notifications for unskilled workers and wide interpretation of legal representatives to include non-financially independent parents and siblings. (Para 10 , 11 , 13 , 14 , 15 )
4. The term legal representative under the Motor Vehicles Act must be interpreted liberally to include any person suffering loss of dependency. (Para 14 , 15 )
5. Appeal allowed — Compensation amount increased — Insurance company directed to pay and recover from driver and owner. (Para 16 , 17 , 18 )
6. How should the income of a deceased person be determined when actual income is not proven?
In the absence of material evidence to prove actual income, the court may refer to minimum wage notifications for unskilled workers to ensure just and fair compensation for the loss of a potential earning member. (Para 10 , 11 )
7. Who qualifies as a legal representative for claiming compensation under the Motor Vehicles Act?
The term legal representative should be interpreted liberally and not confined to spouse, parents, or children; any person who establishes a loss of dependency due to the death is entitled to a remedy. (Para 13 , 14 , 15 )
8. How is the deduction for personal expenses determined in motor accident compensation claims?
The deduction from the annual income is based on the number of dependent family members; for instance, a deduction of 1/4 is applicable when there are five dependents. (Para 15 , 17 )
9. What is the liability of an insurance company when a driver lacks a valid driving license?
The insurance company is directed to first pay the compensation to the claimants and subsequently recover the amount from the driver and owner who are jointly and severally liable. (Para 7 , 16 )
ORDER
Time taken for Time taken for Time taken for
disposal of the claim disposal of the appeal disposal of the appeal
petition by MACT by the High Court in this Court
1 year 10 months 3 years 10 months 1 year 10 months
Leave Granted
2. The present appeal is directed against the judgment and order dated 19th September 2022, passed in Miscellaneous Appeal No.5231 of 2018 by the High Court of Madhya Pradesh at Gwalior, which, in turn, was preferred against the order dated 9th October 2018 in Claim Case No.680/2016 passed by Motor Accidents Claims Tribunal, Gwalior (M.P.).
3. The brief facts giving rise to this appeal are that : on 25th September 2016, the deceased, namely Dheeraj Singh Tomar, aged 24 years, was travelling in an Auto bearing registration No. MP 30-R-0582 (hereinafter referred to as the “offending vehicle”) along with other passengers. The driver of the offending vehicle was driving rashly and negligently, overturned the offending vehicle at Gohad Chauraha Road near Gautum Nagar, Bajrang Washing Centre at Gwalior, due to which the deceased died on the spot and the other passengers suffered injuries.
4. The Appellants (dependents of the deceased) filed a claim petition before the Tribunal seeking compensation of Rs.28,50,000/-, submitting therein that the deceased was earning up to Rs.35,000/- per month, by doing wholesale business of fruit selling to meet the daily expenses of the family.
5. The Tribunal by its Order dated 9th October 2018, observed that Respondent No.1 and 2 are jointly and severally liable to pay compensation as the driver, at the time of accident, was driving the vehicle without a valid and effective driving licence. The Tribunal awarded compensation to the tune of Rs.9,77,200/- along with simple interest @ 7% p.a. to appellant No.1 to 3 herein, by taking the notional income of the deceased as Rs.4,500/- per month and fixing the future prospects at 40 per cent. A deduction of 1/3rd amount for personal expenses was made, and Appellant Nos.4 and 5, i.e., his father and younger sister were not considered as dependents of the deceased.
6. Being aggrieved by the amount of compensation awarded, the claimant-appellants filed an appeal before the High Court. The main ground of challenge was that the Tribunal had incorrectly determined the monthly income of the deceased at Rs.4,500/- per month, whereas it should have been Rs.35,000/- per month; and also, that the Tribunal had deducted 1/3rd amount from the annual income of the deceased towards personal expenses, whereas since there are five claimant-appellants, the deduction for personal expenses ought to have been by 1/4th.
7. The High Court, vide its impugned judgment, affirmed the findings of the Tribunal in respect of the amount of compensation awarded and disposed of the same by holding that the insurance company to pay the amount of compensation to the claimants and, thereafter, recover the same from the driver and owner of the offending vehicle as they are jointly and severally liable to pay the compensation in accordance with the decision of this Court in National Insurance Co. Ltd. v. Swaran Singh & Ors. [(2004) 3 SCC 297].
8. Yet dissatisfied, the claimant-appellants are now before us. The points raised by the appellants are that the High Court incorrectly assessed the monthly income of the deceased at Rs.4,500/-, and the appropriate multiplier was also not applied.
9. We have heard the learned counsel for the parties.
10. We are unable to agree with the view taken by the Tribunal and the High Court on the monthly salary of the deceased. It is borne from the record that he was doing wholesale business of selling fruits. It is true that in the absence of any material on record, the claimantappellants were not able to prove the income of the deceased. However, it is imperative to note that the accident took away such a potential earning member of the family.
11. For this purpose, we advert to the Notifica
