Supreme Court Increases Compensation in Fatal Motor Accident, Directs Insurer to Deposit Additional Rs.11.34 Lakh

A bench of Justices K. Vinod Chandran and N.V. Anjaria heard an appeal by seven claimants challenging the Allahabad High Court's award of compensation in a fatal motor accident case. The appellants sought enhancement of compensation awarded for the death of 33‑year‑old Sobran Singh, asserting errors in the assessment of income, multiplier, and non‑pecuniary heads.

The Court allowed the appeal in part and modified the award, holding that the claimants were entitled to substantially higher compensation. The Court found that the deceased's monthly income should be fixed at Rs. 8,000 (Rs. 6,000 from employment plus Rs. 2,000 from agricultural activity), applied a multiplier of 16 guided by precedents, and reduced the personal expenses deduction to one‑fifth. It held that both the Tribunal and the High Court "erred and misdirected themselves in respect of the award of amount of consortium" and fixed consortium at Rs. 40,000 per claimant. The Court directed respondent insurer to deposit the additional compensation of Rs. 11,34,820 with interest at 7% within eight weeks. The Court, in its reasoning, observed: “The deceased was in the age group of 30 to 35 years. As laid down in National Insurance Company Limited vs. Pranay Sethi & Others, it would be proper to apply multiplier of Rs. 16, as against 17 adopted by the Tribunal and 15 taken by the High Court. There are in all 7 dependants of the deceased which would require deduction of 1/5th amount towards personal expenses instead of 1/4th deduction applied by the Tribunal as well as the High Court. After adding 40% towards future prospects and applying other parameters as above, the annual income of the deceased could be placed at Rs. 60,480/- and multiplying the same by multiplier 16, the amount comes to Rs. 9,67,680/-. The expenses towards treatment could be awarded at Rs. 25,000/-.”

Background The dispute arose from a motor accident on 2 September 2009 near village Bhojla in which Sobran Singh, riding a motorcycle, was struck by a Gypsy allegedly driven in a rash and negligent manner. The deceased sustained grievous injuries, was treated at Jhansi Medical College and later shifted to Gwalior Hospital, where he died on 10 September 2009. The claim petition under Section 166 of the Motor Vehicles Act, 1988 was filed by the widow, four children, and parents, claiming Rs. 26,10,000/-. The Motor Accident Claims Tribunal accepted negligence, fixed the deceased's monthly income at Rs. 4,500, applied multiplier 17 and awarded total compensation of Rs. 7,28,500 with 6% interest. The Allahabad High Court allowed the first appeal to the extent of enhancing the award to Rs. 9,20,500 with 7% interest, adding 40% for future prospects but applying multiplier 15 and awarding Rs. 70,000 for non‑pecuniary heads.

On appeal, the Supreme Court reviewed the documentary evidence — including Khatauni entries and an employer certificate indicating a Rs. 6,000 salary — and accepted that a reasonable addition of Rs. 2,000 for agricultural earnings was permissible. Applying Pranay Sethi, the Court held multiplier 16 to be appropriate for the deceased's age and reduced the personal deduction to one‑fifth given seven dependants. The Court corrected non‑pecuniary awards, fixing spousal, parental and filial consortium at Rs. 40,000 each and increased treatment and funeral expenses to Rs. 25,000 and Rs. 15,000 respectively. The Court computed the total compensation at Rs. 20,55,320 and directed the insurer to deposit the additional Rs. 11,34,820 with interest at 7% from the date of filing of the claim petition till payment. It ordered disbursement of the additional amount in the same proportions as the Tribunal: 75% to the widow and children (claimants Nos.1–5) in equal shares and 25% to the parents (claimants Nos.6–7) in equal shares, with the loss of consortium paid at Rs. 40,000 to each claimant. Payment was directed to be made directly to verified bank accounts of claimants after verification. The appeal was allowed and the High Court judgment was modified accordingly.

Case Details: Case No.: CIVIL APPEAL NO. 5224 OF 2024 Case Title: RANI @ RAJ KUMARI AND OTHERS v. KAMLAKAT GUPTA AND OTHERS Appearances: For the Petitioner(s): Ms. Sweta Rani, Advocate For the Respondent(s): Mr. Manjeet Chawla, Advocate (for Respondent No.1)