Kiran Raj

On January 2, 2025, the Supreme Court, adjudicating upon civil appeals arising from motor accident claims, upheld the enhanced compensation granted by the High Court to a claimant who had suffered the tragic loss of her parents and younger brother in a road accident. The appeals, filed by the insurance company seeking reduction and the claimant seeking further enhancement of the awarded compensation, were dismissed. The Court observed that the compensation awarded by the High Court was just and consistent with the principles established under the Motor Vehicles Act.

The matter pertained to a tragic incident on June 20, 2007, when a Tata van insured by the appellant-insurer, driven negligently, collided with an auto in which the deceased were traveling. The claimant, who was 14 years old at the time, lost her father, mother, and younger brother in the accident. Seeking compensation for their deaths, she filed claims before the Motor Vehicles Accident Tribunal, which awarded sums of ₹14,78,000, ₹13,33,936, and ₹2,45,000 for the death of her father, mother, and brother, respectively. The Tribunal found the driver of the offending vehicle negligent and imposed liability on the insurer to indemnify the vehicle owner.

The claimant, dissatisfied with the quantum awarded, appealed for enhancement. The High Court, upon review, enhanced the compensation for her father’s death to ₹30,58,000, for her mother to ₹16,34,000, and for her brother to ₹5,00,000. The insurer, contesting the enhancements for the parents, filed appeals, while the claimant filed cross-appeals for further enhancement.

The Supreme Court, after granting leave, examined the issues raised. The insurer argued that the High Court erred in not deducting one-third of the deceased parents' income toward personal expenses and that it had relied on assumptions for determining their income without proper evidence. Additionally, it contended that the amounts awarded under conventional heads exceeded the limits set by precedent.

The Court noted that the deduction for personal expenses is a well-settled principle in law, as articulated in Sarla Verma v. Delhi Transport Corporation. It observed that the High Court, while enhancing the compensation, did not deduct one-third of the income for personal expenses, contrary to the established norm. However, the Court held that rectifying this omission would result in a marginal reduction in compensation, which it deemed unnecessary given the circumstances of the case.

Addressing the argument regarding income determination, the Court acknowledged that the deceased parents were self-employed and that the income was assessed on a notional basis due to the absence of direct proof. The High Court had slightly enhanced the income figures fixed by the Tribunal, considering the nature of their occupation and the attending circumstances. The Court found no legal impropriety in the High Court’s approach, noting that such assessments necessarily involve hypothetical considerations, as highlighted in Sarla Verma and Pranay Sethi.

Regarding the amounts awarded under conventional heads, the appellant relied on the judgment in National Insurance Co. Ltd. v. Pranay Sethi, which prescribes a total of ₹70,000 under these heads, with specific allocations for loss of estate, loss of consortium, and funeral expenses. The Court observed that the High Court’s judgment predated the Pranay Sethi decision and thus could not be faulted for exceeding these limits.

In examining the claimant’s appeals for further enhancement, the Court found that the multiplier and other factors applied by the High Court were consistent with settled legal principles. It noted that the High Court had correctly accounted for the claimant's young age at the time of the accident and her significant loss of family support. However, it held that the enhancements sought would exceed the bounds of just compensation mandated under Section 168 of the Motor Vehicles Act.

The Court further stated: “In a family of four members, where three of them died, leaving the claimant alone at a young age, the plight and fate of the claimant, as considered by the Tribunal and the High Court, justify the quantum of compensation awarded. After reviewing all parameters, we find no reason to interfere with the High Court’s decision to grant enhanced compensation.”

The Court upheld the enhanced compensation awarded by the High Court and maintained the impugned judgment.

Case Title: New India Assurance Co. Ltd. v. Sonigra Juhi Uttamchand
Neutral Citation: 2025 INSC 15
Bench: Justice C.T. Ravikumar and Justice Sanjay Karol

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