Compensation for Child Road Accident Victim: Supreme Court Enhances Award

The Supreme Court of India recently delivered a significant judgment in the case of Kurvan Ansari alias Kurvan Ali & Anr. vs. Shyam Kishore Murmu & Anr. The case revolved around a tragic road accident that resulted in the death of a seven-year-old child and the subsequent compensation claim by the parents. The primary issue before the Court was whether the compensation granted by the lower courts was just and reasonable, considering inflation and the rising cost of living.

Background of the Case

The case arose from a road accident that took place on September 6, 2004, in which the deceased, a seven-year-old boy named Ibran Ali, was fatally injured after being hit by a motorcycle. The accident occurred while the child was standing outside his maternal grandparents’ house. The motorcycle was being driven by Sunil Gurum and was owned by respondent Shyam Kishore Murmu. The vehicle was insured with an insurance company (respondent no. 2).

Following the accident, the parents of the deceased filed a claim under Section 163-A of the Motor Vehicles Act, 1988, seeking compensation for their loss. The case was initially heard by the Motor Accidents Claims Tribunal (MACT), which ruled in favor of the claimants, awarding them compensation.

Arguments by the Petitioner

The petitioners, who were the parents of the deceased child, contended that:

The notional income of Rs.15,000 per annum considered by the Tribunal was outdated and insufficient.
The compensation should be enhanced in light of inflation and the increasing cost of living.
As per legal precedents, the compensation for the loss of a child should be just and fair, taking into account the future potential earnings the child could have had.
They relied on previous judgments such as Puttamma & Ors. vs. K.L. Narayana Reddy & Anr., R.K. Malik & Anr. vs. Kiran Pal & Ors., and Kishan Gopal & Anr. vs. Lala & Ors., which emphasized fair compensation in cases of child fatalities.

Arguments by the Respondent

The respondents, including the insurance company, countered that:

The compensation had been calculated as per Schedule II of the Motor Vehicles Act, 1988, which provided a notional income of Rs.15,000 per annum for non-earning individuals.
The Tribunal’s order was fair and in line with the statutory provisions.
They relied on the Supreme Court’s ruling in Rajendra Singh & Ors. vs. National Insurance Company Limited & Ors., where the Court upheld a similar calculation method.

Decision of the Supreme Court

The Supreme Court examined the case in detail and agreed with the petitioners that the notional income prescribed in Schedule II had not been revised since 1994, despite multiple directives from the Court. It recognized the need to adjust the notional income to reflect economic realities.

The Court observed:

“The Central Government was bestowed with the duty to amend Schedule-II in view of Section 163-A(3) of the Motor Vehicles Act, but it failed to do so. The notional income of Rs.15,000 per annum as prescribed in 1994 is outdated and does not reflect current economic conditions.”

Based on this, the Court revised the compensation as follows:

Increased the notional income of the deceased from Rs.15,000 to Rs.25,000 per annum.
Applied the multiplier of 15, as prescribed in Schedule II for non-earning persons.
Enhanced the total compensation to Rs.4,70,000, including:

Loss of Dependency: Rs.3,75,000
Filial Consortium: Rs.80,000 (Rs.40,000 each for both parents)
Funeral Expenses: Rs.15,000

The Court also ruled that the insurance company must pay the compensation amount to the claimants and could recover the sum from the motorcycle owner, as the driver did not possess a valid driving license at the time of the accident.

Impact of the Judgment

The judgment is significant because it:

Sets a precedent for revising notional income to account for inflation and economic changes.
Upholds the principle that compensation must be just and fair, rather than merely adhering to outdated statutory schedules.
Ensures that victims of motor accidents receive adequate financial relief, particularly in cases involving the death of a child.
Places responsibility on the insurance company to pay the compensation upfront while allowing it to recover the sum from the vehicle owner if required.

Conclusion

The Supreme Court’s decision in this case provides clarity and fairness in awarding compensation in cases of child fatalities due to motor accidents. By enhancing the notional income and ensuring fair compensation, the Court has taken a progressive approach that aligns with economic realities. This ruling will serve as a benchmark for future motor accident claims involving children and non-earning individuals.

Petitioner Name: Kurvan Ansari alias Kurvan Ali & Anr..
Respondent Name: Shyam Kishore Murmu & Anr..
Judgment By: Justice R. Subhash Reddy, Justice Hrishikesh Roy.
Place Of Incident: Jharkhand.
Judgment Date: 16-11-2021.

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