In computing compensation for the death of a student, the court must re-fix notional income by considering future prospects, and the imposition of penal interest in accident claims is legally unsustainable.

JUDGMENT

This appeal is filed by claimants in O.P.(MV) No. 980 of 2017 on the files of the Motor Accidents Claims Tribunal, Palakkad, claiming enhancement of compensation. The respondents herein were the respondents before the tribunal.

2. According to the claimants, on 30.01.2017 at about 04.30 p.m., while the deceased was riding a motorcycle through Palakkad-Kongad public road, a lorry bearing Reg.No.TN-78-Z-9342 driven by the 2^nd respondent in a rash and negligent manner hit down the motorcycle. As a result, the deceased sustained serious injuries and succumbed to the injuries. The legal heirs of the deceased approached the tribunal claiming a total compensation of ₹41,62,000/- limited to ₹26,00,000/-.

3. The 1^st respondent/the owner and the 2^nd respondent/the driver of the offending vehicle remained ex- parte before the tribunal. The 3^rd respondent/insurer filed a written statement, admitting the policy but disputing the quantum of compensation claimed and denying negligence. Exts.A1 to A20 were marked. The tribunal, after analysing the pleadings and materials on record, awarded a total compensation of ₹16,43,000/- with interest @7.5% per annum against the third respondent insurer; and in default of payment as above, penal interest @ 9% per annum was also awarded. Dissatisfied with the quantum of compensation awarded by the tribunal, the claimants have come up in appeal.

4. Heard the learned counsel for the appellants and the learned Standing Counsel for the respondent insurance company.

5. The learned counsel for the appellants claims enhancement mainly under the following heads :-

Notional income :- The learned counsel for the claimants submitted that though the deceased was a I^st year B.Sc student, the tribunal had taken only an amount of ₹10,000/- as the monthly income of the deceased. The learned counsel further submitted that he was very good in studies and had good future prospects and the tribunal ought to have fixed more amount as the notional income. Considering the fact that the deceased was aged only 20 years and was a brilliant B.Sc student, I find it appropriate to re-fix the income as ₹13,000/-. Since the deceased was aged 20 years at the time of the death, by adding 40% future prospects as per National Insurance Co. Ltd. v. Pranay Sethi [2017(4) KLT 662(SC)], to the income now fixed, the amount will be ₹18,200/- for awarding compensation under the head loss of dependency.

Loss of dependency :- Since the notional income, after adding future prospects, is re-fixed at ₹18,200/-, following the judgments in Pranay Sethi (supra) and Sarla Verma v. Delhi Transport Corporation [2010(2) KLT 802(SC)], the compensation payable under the head loss of dependency is re-calculated thus as: (18200 x 12 x 18 x 1/2) ₹19,65,600/-. The tribunal has awarded an amount of ₹15,12,000/- under the head loss of dependency. Thus, there will be an additional amount of ₹4,53,600/- under the said head.

6. Though the appellants/claimants claimed enhancement of compensation under the other heads, on a perusal of the records available, I do not find any reason to interfere with the compensation awarded by the tribunal under other heads since it appears to be just and reasonable.

On a perusal of the impugned award, it is seen that the tribunal awarded penal interest at the rate of 9%, which is not legally sustainable in view of the judgment of the apex court in National Insurance Co. Ltd. v. Keshav Bahadur [2004 (2) SCC 370]. Accordingly, the direction of the tribunal awarding penal interest @ 9% per annum is hereby set as