1. Motor vehicle accident resulting in death — Claim for compensation under Section 166, Motor Vehicles Act — Appeal for enhancement of compensation. (Para 3 , 4 )
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2025 Supreme(SC) 1160
SUPREME COURT OF INDIA
Sudhanshu Dhulia, Aravind Kumar, JJ.
Kavita Devi and others – Appellants
Versus
Sunil Kumar and another – Respondents
Civil Appeal No(s) 10227 of 2025 (@ Special Leave Petition (Civil) No(s). of 2025 (@ Diary No(S). 47285 of 2018)
Decided On : 06-08-2025
Advocates appeared:
For the Petitioner(s): Mr. Fuzail Ahmad Ayyubi, AOR
For the Respondent(s): Ms. Summan Bagga, Adv. Ms. Manjeet Chawla, AOR Ms. Usha Pant Kukreti, Adv. Ms. Kiran Bala Agarwal, Adv.
For the Petitioner(s): Mr. Fuzail Ahmad Ayyubi, AOR
For the Respondent(s): Ms. Summan Bagga, Adv. Ms. Manjeet Chawla, AOR Ms. Usha Pant Kukreti, Adv. Ms. Kiran Bala Agarwal, Adv.
IMPORTANT POINT
Death in motor accident – In case of allowances which are included in component of salary of deceased, Tribunal has to take into consideration these allowances as they were used for supporting family.
Headnote:
Motor Vehicles Act, 1988 – Sections 168 and 173 – Death in motor accident – Compensation of Rs. 7,23,680/- with 7% interest awarded by High Court – Claim for more compensation – For the purpose of computation, actual income of deceased has to be taken into consideration – In case of allowances which are included in component of salary of deceased, Tribunal has to take into consideration these allowances as they were used for supporting family – Claimants have to show that these allowances were regularly received and used for family’s benefit – While determining whether allowances form a part of salary or not, Tribunal by looking into facts of each case and by considering extent of dependency of claimants on salary of deceased including allowances, have to determine whether these allowances should be excluded from determination of income of deceased – In view of changing economic situation of family after death of deceased, income which deceased was earning at the time of accident was Rs. 6,500/- per month and same ought to have been taken into consideration – Considering age of deceased i.e. 35 years, 50% future prospects must be added to income – Appropriate multiplier to be adopted would be 16 and 1/3rd has to be deducted for personal expenses of deceased – Total compensation of Rs. 14,29,500/- alongwith 7 interest awarded. (Paras 16, 17, 18, 19, 20, 21 and 22)
Facts of the case:
Fatal accident. Tribunal vide its award dated: 12/04/2010 awarded compensation of Rs. 2,54,720/- with interest @ 7% p.a. Aggrieved by award of Tribunal, claimants filed an Appeal3 before High Court seeking enhancement of compensation and High Court by impugned order dated: 20/08/2013 enhanced compensation from Rs. 2,54,720/- to Rs. 7,23,680/- with interest @7% p.a. Claimants not being satisfied with award of High Court, have filed this Appeal seeking further enhancement of compensation.
Findings of Court:
Claimant No.1 shall be entitled to receive periodical interest from said fixed deposits, which shall be utilized for the benefit of Claimant Nos.2 and 3. Majority of the proceeds from fixed deposits shall be paid to Claimant Nos.2 and 3 on proper identification. Consequently, Appeal is allowed in part. Pending applications, if any are consigned to records.
Result : Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Dispute over inclusion of allowances in income, consideration of agricultural income, and adequacy of compensation under conventional heads. (Para 12 )
3. Income for compensation includes allowances and perks benefiting the family; compensation must be just and reasonable, reflecting actual economic loss. (Para 15 , 16 , 18 )
4. Actual income for compensation computation includes allowances and perks used for family support, subject to statutory tax deductions. (Para 16 )
5. Appeal allowed in part — Compensation enhanced — Directions for deposit and distribution of funds. (Para 21 , 22 )
6. Should allowances and perks be included when determining the income of the deceased for motor accident compensation?
Yes, the term income should be interpreted broadly to include perks and allowances that benefit the entire family, as these contribute to the family's upkeep and represent the actual economic loss. (Para 16 , 18 )
7. How is the loss of dependency calculated for a deceased person in a motor vehicle accident claim?
It is calculated by taking the actual monthly income including allowances, deducting a portion for personal expenses, adding future prospects based on age, and applying the appropriate multiplier. (Para 19 )
8. Are claimants entitled to separate awards for spousal and parental consortium?
Yes, the court awarded separate sums for spousal consortium to the spouse and parental consortium to the children, ensuring each dependent is compensated for the loss of their specific relationship. (Para 20 )
JUDGMENT :
ARAVIND KUMAR, J.
1. Heard
2. Leave Granted
3. Appellants being the Claimants in a petition filed under Motor Vehicle Accident Claim1[M.A.C.T. Case. No. 98 of 08.08.2009] under Section 166 of the Motor Vehicles Act (hereinafter referred to as the Act) are before this Court seeking enhancement of compensation. Claimants being the Wife and two children of the one Lokender Kumar (hereinafter referred to as the deceased) who expired on account of injuries sustained in a Motor Vehicle Accident filed a claim petition before the Motor Vehicle Accident Claims Tribunal2[Motor Vehicle Claims Tribunal, Gurgaon] (hereinafter referred to as the Tribunal) seeking compensation of Rs. 25,00,000/-. The Tribunal vide its award dated: 12/04/2010 awarded compensation of Rs. 2,54,720/- with interest @ 7% p.a. Aggrieved by the award of the Tribunal, the claimants filed an Appeal3[FAO No. 1518 of 2011 before the Punjab and Haryana High Court] before the High Court seeking enhancement of compensation and High Court by the impugned order dated: 20/08/2013 enhanced the compensation from Rs. 2,54,720/- to Rs. 7,23,680/- with interest @7% p.a. The claimants not being satisfied with the award of the High Court, have filed this Appeal seeking further enhancement of compensation.
BRIEF FACTS:
4. At around 7.00. a.m. on 16/02/2009 when the deceased was proceeding to his office located in Gurgaon and when he reached Angana Restaurant situated in Sohna-Gurgaon Road, a Santro car bearing registration No. HR-26-AN-3670 driven in a rash and negligent manner by Respondent No. 1 dashed against the deceased causing severe injuries, because of which the deceased succumbed at the spot.
5. At this juncture it is apposite to mention that this Court will only examine the issue related to enhancement of compensation and will not enter into the question of the cause of the accident, as both the Tribunal and the High Court have concurrently held that the accident has occurred because of the rash and negligence of the offending vehicle and there being no serious dispute on this finding.
AWARD OF THE TRIBUNAL AND HIGH COURT
6. Claimants pleaded in their claim petition that at the time of death deceased was aged 35 years and he was working in R.M. Manpower Services, Gurgaon, Haryana and receiving salary of Rs. 6500/- per month and he was also doing agricultural work and earning Rs. 5000/- per month, meaning thereby that at the time of incident the deceased was earning Rs. 11,500/- per month. The Claimants also examined PW4 - Inder Singh, Manager of M/S R.M Manpower Services, Kamla Palace, Jail Road, Gurgaon to prove the employment of the deceased in their firm and his income. PW4 stated that the deceased was working as an operator in their firm and he produced a salary slip before the Tribunal which was marked as Ex. P6 which indicated that deceased was earning Rs. 6,500/- per month including allowances. Though PW4 proved the salary slip, in his cross- examination, he said that the deceased was earning Rs. 3,665/- as basic pay.
7. The Tribunal, while determining the income of the deceased held that, in the Half-Yearly ESI Return (Form 6) for October 2008 to March 2009, wages paid to the deceased for 4.5 months total Rs. 28,832/-, averaging about Rs. 6,407/- per month was indicated. However, in Form 6A (for unexempted establishments) from March 2008 to February 2009, the deceased's wages from 12.08.2008 to 16.02.2009 (approx. 6 months) was stated as Rs. 21,938/-, i.e., around Rs. 3,665/- per month. There is a significant discrepancy between the income figures in Form 6 and Form 6A, which remains unexplained in the records. Because of this inconsistency and considering the fact that Rs. 6,500/- salary per month included in itself Rs. 1,100/- for the purposes of House Rent Allowance and Rs. 1,735/- for the purposes of unspecified allowances, the Tribunal held that the income of the deceased was Rs. 3,665/- per month excluding the allowances.
8. Further, considering the four-membe
