SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

2025 Supreme(P&H) 357

PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH
ALKA SARIN, J.
New India Assurance Company Limited – Appellant
Versus
Mangi Devi And Others – Respondent
FAO-542-2018 (O&M)
Decided on : 05-05-2025

Advocates Appeared:
For the Appellant :Mr. R.C. Gupta, Advocate
For the Respondent:Mr. Sumit Gupta, Advocate

The court concluded that minimum wage standards guide but must not constrain just compensation in motor vehicle accidents, allowing for comprehensive income assessments.

Headnote:(A) Motor Vehicles Act, 1988 - Just compensation - Assessment of income - Tribunal applied Deputy Commissioner rates instead of minimum wage rates; Supreme Court emphasizes that minimum wage can serve as a yardstick, but the court must ensure the compensation is just and reasonable. (Paras 5, 11, 12, 18)

(B) Future Prospects - Court modified future prospects addition from 50% to 40% as per law laid down. (Para 14)

(C) Loss of Consortium - Reworked compensation for emotional loss awarded; claimants' entitlement adjusted for higher compensation based on Supreme Court precedents. (Paras 12, 18)

Facts of the case:
Insurance Company contested the compensation amount awarded post-accident, primarily focusing on the assessment criteria employed by the Tribunal, arguing for a reduction based on minimum wage standards.

Findings of Court:
The assessment of loss must align with equitable principles per statutory guidelines to remedy financial shortcomings faced by the aggrieved family post-accident.

Issues: The court addressed the validity of compensation criteria and the applicability of specific deduction percentages concerning the dependents of the deceased.

Ratio Decidendi: The decision underscored that minimum wages serve as a guide, but actual income should reflect a broader assessment, accommodating future earnings and familial impacts.

Result: Appeal partly allowed; compensation reworked.

Table of Content
1. review of compensation awarded and basis of assessment. (Para 1 , 2 , 3 , 4)
2. minimum wages serve as a yardstick but should not limit compensation. (Para 8 , 12)
3. legal framework guiding dependency and prospective income evaluation. (Para 10 , 11 , 13)
4. final adjustments to compensation based on legal precedents. (Para 14 , 15)

JUDGMENT :

Alka Sarin, J. (Oral)

1. The present appeal has been preferred by the appellant-Insurance Company aggrieved by the quantum of compensation awarded vide the impugned award dated 06.09.2017 passed by the Motor Accident Claims Tribunal, Karnal (hereinafter referred to as 'Tribunal').

2. Since the factum of the accident is not in dispute and only the quantum is being challenged, the facts are not being reproduced herein for the sake of brevity.

3. In the present case the Tribunal had awarded the following compensation :

Sr. No.

Heads

Calculation

1.

Monthly Income

Rs. 10,520/-

2.

Deduction 1/5th

Rs. 8,416/- [Rs. 10,520-2,104]

3.

Annual Income

Rs. 1,00,992/- [Rs. 8,416 x 12]

4.

Multiplier '15'

Rs. 15,14,880/- [Rs. 1,00,992 x 15]

5.

Future prospects @ 50%

Rs. 7,57,440/- [Rs. 4,208 x 12 x 15]

6.

Funeral and conveyance expenses

Rs. 25,000/-

7.

Loss of love and affection

Rs. 1,00,000/-

8.

Loss of consortium

Rs. 1,00,000/-

Total Compensation

Rs. 24,97,320/-

Interest

9% per annum

4. Learned counsel for the appellant-Insurance Company would contend that in the present case the Tribunal has applied Deputy Commissioner rates instead of minimum wages and, hence, the income of the deceased as assessed is on the higher side. It is further the contention of the learned counsel for the appellant-Insurance Company that as per the law laid down by the Hon'ble Supreme Court in the case of National Insurance Company Ltd. vs. Pranay Sethi & Ors. [(2017) 16 SCC 680], an addition of 40% ought to have been made towards future prospects instead of 50%. The learned counsel for the appellant-Insurance Company further states that he does not challenge the multiplier as the deceased was 36 years of age and the Tribunal has rightly applied the multiplier of '15'. It is further the contention of the learned counsel for the appellant-Insurance Company that in the present case the father of the deceased is not dependent since there is no evidence on the record to show that he was dependent on the deceased and, hence, 1/4th deduction ought to have been applied instead of 1/5th.

5. Per contra, the learned counsel for respondent Nos.1 to 7/claimants has contended that this is a case where the amount of compensation would have to be reworked inasmuch as the amounts awarded under the conventional heads and under the head 'loss of consortium' are not as per the law laid down by the Hon'ble Supreme Court in the cases Pranay Sethi (supra), Magma General Insurance Company Limited vs. Nanu Ram alias Chuhru Ram & Ors. [(2018) 18 SCC 130] and N. Jayasree & Ors. vs. Cholamandalam M.S General Insurance Company Ltd. [2021(4) RCR (Civil) 642]. It is further the contention of the learned counsel that while assessing the income of the deceased, the Deputy Commissioner rates have rightly been applied by the Tribunal. It is further the contention of the learned counsel that the deceased was 36 years of age at the time of the accident and has left behind four minor children aged 3 to 11 years, his wife aged 32 years and his parents, and they have their whole lives ahead of them. The learned counsel for respondent Nos.1 to 7/claimants has further contended that even though no cross-objection or appeal has been preferred by the respondent Nos.1 to 7/claimants, however, as per the provisions of Order 41 Rule 33 of the Code of Civil Procedure, 1908, the Court has power to pass an order notwithstanding that an appeal or cross-objection has not been filed by the claimants/respondents especially in view of the fact that the Motor Vehicles Act, 1988 is a beneficial piece of legislation. In support of his contentions, he has relied upon the judgment of the Hon'ble Supreme C

Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top