Supreme Court Enhances Compensation in Fatal Motor Accident, Fixes Award at Rs.13.82 Lakh with 7.5% Interest

A bench of Justices Sudhanshu Dhulia and Ahsanuddin Amanullah heard an appeal challenging the Punjab & Haryana High Court’s partial enhancement of compensation in a fatal motor accident claim. The issue related to the proper assessment of monthly income, multiplier, future prospects and heads of damages payable to dependants of a deceased housewife.

The Court allowed the appeal in part and increased the compensation payable to the claimants to Rs.13,82,500/-, directing payment with interest at 7.5% per annum from the date of filing of the claim until realization and providing for pro rata interest if interim payments had been made. The Court set aside the Impugned Order of the High Court and remade the computation after re-assessing monthly income, multiplier and future prospects. The Court, in its reasoning, observed: “We express our respectful agreement with Rajendra Singh (supra) and, accordingly, assess loss of future prospects at 25%, bearing in mind the dicta in Pranay Sethi (supra). In undertaking the exercise of computation of compensation, we have verily reminded ourselves that the Motor Vehicles Act, 1988 is a beneficial and welfare legislation and it is our duty to award ‘just compensation’ [refer Ningamma v United India Insurance Company Limited, (2009) 13 SCC 710].” The Court also noted that “we are inclined to grant her the benefit of multiplier of 14 taking her age as 45 years.”

Background The claim arose from a fatal accident on 07.02.2003 when a truck allegedly driven rashly by respondent No.1 crushed the deceased, Smt. Tarawati, who was going on foot to a bus stand. The appellants, her dependants, filed a motor accident claim seeking Rs.15,00,000/-. The MACT awarded Rs.4,31,680/-, applying a monthly income of Rs.5,100/-, multiplier 8 and various heads of damages. On first appeal the High Court enhanced the award to Rs.5,96,761/- and increased interest to 7.5%, computing monthly income at Rs.5,819/- and applying multiplier 9.

The petitioners challenged the High Court’s assessment of age, monthly income and other heads; they relied on precedents including Rajendra Singh v. National Insurance Co. Ltd. and National Insurance Co. Ltd. v. Pranay Sethi to contend that notional income of a housewife and future prospects were under-assessed. The insurer resisted, submitting that the High Court had applied correct principles and that “sympathies cannot override the applicable law.”

The Supreme Court examined evidence including the post-mortem age estimation and bank statements showing family pension, applied the Sarla Verma formula for computation of dependency and referred to Rajendra Singh and Pranay Sethi on notional income, multiplier and consortium. The Court treated the family pension (Rs.5,137/-) plus a notional homemaker income (Rs.2,500/-) as giving a monthly income rounded to Rs.7,000/-. It found sufficient basis to adopt multiplier 14 for the deceased aged about 45 years, assessed future prospects at 25%, increased funeral expenses to Rs.20,000/-, and awarded Rs.40,000/- per head (escalated to Rs.48,000/-) for loss of love and affection for five claimants, totaling Rs.2,40,000/-. The Court held that loss of care and guidance to minors had been factored under loss of love and affection and declined separate payment under that head. Ultimately, the Supreme Court quantified total compensation at Rs.13,82,500/-, retained interest at 7.5% per annum from the date of filing, directed payment within two months if not already paid and clarified pro rata interest adjustments for earlier interim payments. The Impugned Order was set aside and the appeal was allowed; no order as to costs was made.

Case Details: Case No.: 2025 INSC 366; Special Leave Petition (C) No.1114 of 2019 (Civil Appeal arising therefrom) Case Title: SUNITA & ORS. v. VINOD SINGH & ORS. Appearances: For the Petitioner(s): [Advocates not indicated in the judgment] For the Respondent(s): [Advocates not indicated in the judgment]