Compensation for Road Accident Victims: Supreme Court Enhances Award for Parents

The case of Sureshchandra Bagmal Doshi & Anr. vs. The New India Assurance Company Limited & Ors. highlights the legal complexities surrounding compensation claims for road accident victims. This tragic case involved the untimely death of a young widow, who was the only daughter of a lawyer and a doctor. The Supreme Court examined the quantum of compensation granted to her parents and determined whether the High Court was correct in reducing the amount awarded by the Motor Accident Claims Tribunal (MACT).

The accident occurred on August 16, 1998, when the deceased was traveling in a vehicle that collided with a truck. The claimants—her parents—sought compensation based on her earning potential and future prospects.

Background of the Case

The deceased was a qualified B.E. (Civil) graduate and worked as an International Internal Sales Engineer with a monthly salary of Rs. 6,273. She had shown promising career growth, and the claim for compensation was based on her prospective income exceeding Rs. 25,000 per month.

Arguments by the Parties

Petitioners’ Arguments (Parents of the Deceased)

The appellants (parents) contended that:

• The deceased had excellent career prospects, and her income should have been assessed based on actual evidence rather than standard calculations.
• The Tribunal had correctly taken into account a 100% increase for future income rise, whereas the High Court reduced it to 50%.
• The deductions for personal expenses should not have been 50% but should have remained at one-third, as assessed by the Tribunal.
• The compensation under the conventional heads was inadequate and needed revision.

Respondents’ Arguments (Insurance Company)

The insurance company argued that:

• The future income rise should be capped at 50% in accordance with the guidelines laid down in Sarla Verma & Ors. v. Delhi Transport Corporation.
• Since the claimants were parents and not dependents like a spouse or children, the deduction for personal expenses should be 50% instead of one-third.
• The compensation granted by the Tribunal was excessive and needed to be reduced to align with legal precedents.

Supreme Court’s Analysis

The Supreme Court analyzed the case based on legal principles and past judgments, particularly referring to National Insurance Company Limited v. Pranay Sethi. The Court ruled:

• The Tribunal had rightly assessed the future income rise at 100%, considering the deceased’s career trajectory.
• There was sufficient documentary evidence proving that the deceased’s salary would have increased significantly over time.
• The High Court was correct in applying a 50% deduction for personal expenses, following established legal principles.
• The amounts awarded under the conventional heads needed revision in line with the Pranay Sethi judgment.

Key Observations by the Court

The Supreme Court stated:

“We are, thus, of the view that looking into the conspectus of the aforesaid facts and the legal position, the Tribunal was justified in giving a 100 per cent increase and taking the future prospects at Rs.12,000 per month.”

Final Judgment

The Supreme Court modified the compensation amount, restoring the Tribunal’s assessment for future income rise and revising the amounts under conventional heads. The judgment concluded:

“The amount under the conventional heads would be Rs.70,000, which as per the said judgment is capable of being enhanced @ 10 per cent in the span of every three years.”

Conclusion

This ruling is significant in determining fair compensation for accident victims based on their career prospects. The Court’s decision underscores the importance of assessing future income growth realistically and ensuring just compensation for the victim’s dependents.

Petitioner Name: Sureshchandra Bagmal Doshi & Anr..
Respondent Name: The New India Assurance Company Limited & Ors..
Judgment By: Justice J. Chelameswar, Justice Sanjay Kishan Kaul.
Place Of Incident: India.
Judgment Date: 18-04-2018.

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