Compensation in Motor Accident Cases: Supreme Court Increases Award for Victim’s Family

The Supreme Court of India, in a significant ruling, enhanced the compensation awarded to the family of a motor accident victim. The case involved the tragic death of Manoj Kumar Biswal, who lost his life in a road accident on May 9, 2013. His family, including his wife and two minor children, initially received Rs.12,90,064 from the Motor Accident Claims Tribunal (MACT). However, this amount was revised to Rs.22,60,000 after reconsideration by the Tribunal. The High Court of Orissa subsequently reduced the compensation to Rs.17,00,000. Dissatisfied with the reduction, the victim’s family appealed to the Supreme Court, which ruled in their favor, increasing the compensation to Rs.31,01,000.

Background of the Case

The deceased, Manoj Kumar Biswal, was working as a supervisor at M/s. Divine Construction and was earning Rs.15,000 per month. He was 33 years old at the time of his death. The accident occurred due to the rash and negligent driving of a truck, leading to his untimely demise.

Read also: https://judgmentlibrary.com/supreme-court-enhances-compensation-in-motor-accident-case/

The claim petition was initially filed before the MACT, which awarded compensation of Rs.12,90,064. Both the claimants and the insurer challenged the decision before the High Court. The High Court remanded the matter back to the Tribunal, which increased the compensation to Rs.22,60,000. However, upon an appeal by the insurer, the High Court arbitrarily reduced the amount to Rs.17,00,000 without assigning any specific reasons. The Supreme Court intervened, finding the High Court’s approach flawed and enhancing the compensation.

Arguments Presented by the Appellants

The legal representatives of the deceased, led by their counsel, argued the following points:

• The High Court unjustifiably reduced the compensation without providing any reasoning.
• The deceased was earning Rs.15,000 per month, and the Tribunal had correctly assessed this income.
• The courts had incorrectly applied a multiplier of ‘15’ instead of ‘16’ for computing compensation.
• No additional amount had been awarded for future prospects, contrary to the Supreme Court’s ruling in National Insurance Co. Ltd. v. Pranay Sethi.
• The compensation under conventional heads such as loss of estate and consortium was insufficient and needed revision.

Arguments by the Insurer

The insurer, who had appealed against the Tribunal’s award, defended the High Court’s decision, arguing that the compensation awarded was appropriate and needed no further enhancement.

Supreme Court’s Observations and Judgment

The Supreme Court, after reviewing the case, ruled that the High Court had arbitrarily reduced the compensation without any justification. It made the following observations:

• The income of the deceased was rightly assessed at Rs.15,000 per month.
• The deceased was 33 years old at the time of death, and as per legal precedents, a multiplier of ‘16’ was correctly applied.
• Following the ruling in Pranay Sethi, an addition of 40% for future prospects was warranted.
• Compensation under conventional heads, such as loss of estate and spousal consortium, needed enhancement.

The Court recalculated the compensation as follows:

• Annual salary: Rs.15,000 × 12 = Rs.1,80,000
• Applying multiplier ‘16’: Rs.1,80,000 × 16 = Rs.28,80,000
• Adding 40% future prospects: Rs.28,80,000 + Rs.11,52,000 = Rs.40,32,000
• Deduction of one-fourth for personal expenses: Rs.40,32,000 – Rs.10,08,000 = Rs.30,24,000
• Loss of estate and conventional expenses: Rs.16,500
• Funeral expenses: Rs.16,500
• Spousal consortium: Rs.44,000

The final amount payable was determined as Rs.31,01,000, with interest at 7.5% per annum from the date of claim petition till realization.

Directive for Speedy Compensation Resolution

The Supreme Court further noted the excessive delay in resolving motor accident claims due to appeals and judicial backlog. It suggested the formation of dedicated ‘Motor Vehicle Appellate Tribunals’ to expedite compensation cases, ensuring timely relief for victims’ families.

Read also: https://judgmentlibrary.com/road-accident-conviction-in-goa-supreme-courts-judgment-on-rash-driving/

Final Verdict

The Supreme Court directed the insurer to deposit Rs.14,01,000 (the additional amount over what the High Court had awarded) within eight weeks. The ruling serves as a significant precedent, reaffirming the principles laid down in Pranay Sethi and reinforcing the necessity of fair and just compensation for accident victims.

This judgment highlights the importance of structured compensation calculations and ensures that victims’ families receive rightful compensation without arbitrary reductions by appellate courts.

Petitioner Name: Rasmita Biswal & Ors..
Respondent Name: Divisional Manager, National Insurance Company Ltd. and Anr..
Judgment By: Justice S. Abdul Nazeer, Justice Krishna Murari.
Place Of Incident: Odisha.
Judgment Date: 08-12-2021.

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