Motor Accident Compensation: Supreme Court Restores Full Award in Mohammed Siddique v. National Insurance

The case of Mohammed Siddique & Anr. v. National Insurance Company Ltd. & Ors. deals with a tragic motor accident that resulted in the death of a 23-year-old man. The case centers around the compensation awarded by the Motor Accident Claims Tribunal (MACT), which was later reduced by the High Court. The Supreme Court, in its judgment on January 8, 2020, set aside the High Court’s ruling and restored the original compensation awarded by the Tribunal.

The judgment highlights critical aspects of motor accident compensation, including the assessment of contributory negligence, the computation of income for compensation purposes, and the application of the correct multiplier in determining compensation.

Background of the Case

The deceased, a 23-year-old, was involved in a road accident on September 5, 2008, and succumbed to injuries two days later. At the time of the accident, he was riding as a pillion passenger on a motorcycle along with two others when a speeding car hit the motorcycle from behind.

The parents of the deceased filed a compensation claim before the Motor Accident Claims Tribunal (MACT), which awarded Rs. 11,66,800/- as compensation. The Insurance Company, however, challenged this award before the High Court, arguing that:

The deceased was also negligent since there were three persons on the motorcycle, violating traffic laws.
The deceased’s income was not sufficiently proved.
The Tribunal had applied an incorrect multiplier to calculate the compensation.

The High Court accepted these arguments and reduced the compensation to Rs. 4,14,000/-, applying a 10% deduction for contributory negligence, reducing the monthly income to minimum wage, and lowering the multiplier.

Arguments by the Appellants (Mohammed Siddique & Anr.)

The Tribunal correctly assessed the compensation based on the deceased’s employment and income, as testified by his employer.
The deceased was not at fault in the accident, as it was caused by the rash and negligent driving of the car.
The High Court’s reduction of the compensation was unjustified and not based on proper legal reasoning.

Arguments by the Respondent (National Insurance Company Ltd.)

The deceased contributed to the accident by riding as one of three people on a motorcycle, violating traffic laws.
The employer’s testimony regarding the deceased’s income was not backed by salary records or tax filings and could not be relied upon.
The Tribunal applied an excessive multiplier, which needed correction.

Supreme Court’s Judgment

The Supreme Court ruled in favor of the appellants, restoring the full compensation awarded by the Tribunal. The Court addressed three major points:

Contributory Negligence: The Court rejected the High Court’s finding that the deceased was guilty of contributory negligence. It stated that while carrying three people on a motorcycle is a violation of traffic rules, this alone does not establish that the deceased contributed to the accident. The car driver was solely responsible for the accident as the vehicle hit the motorcycle from behind.
Income Assessment: The Supreme Court held that the employer’s testimony was credible, and the High Court erred in disregarding it merely because salary vouchers or tax records were not produced. The Tribunal’s assessment of Rs. 9,600/- as monthly income was upheld.
Multiplier Application: The Supreme Court reaffirmed that the multiplier should be applied based on the deceased’s age. The High Court incorrectly applied a lower multiplier of 14, whereas the Tribunal had correctly used a multiplier of 18.

On these grounds, the Supreme Court set aside the High Court’s order and restored the Tribunal’s award.

Legal Precedents Cited

Sarla Verma v. Delhi Transport Corporation – Established the principle that the multiplier should be applied based on the deceased’s age.
Reshma Kumari v. Madan Mohan – Reinforced that loss of dependency should be calculated based on the deceased’s earnings.
Munna Lal Jain v. Vipin Kumar Sharma – Confirmed that contributory negligence must have a direct causal link to the accident.

Impact of the Judgment

This ruling provides clarity on the following aspects of motor accident compensation:

Contributory negligence cannot be assumed merely based on traffic violations unless it directly contributes to the accident.
Courts must give due weight to employer testimony when determining income for compensation, especially in cases involving informal employment.
The correct multiplier must be applied based on the deceased’s age rather than the claimants’ age.

The Supreme Court’s decision reaffirms the rights of accident victims’ families to fair compensation and prevents unjustified reductions by appellate courts.

Petitioner Name: Mohammed Siddique & Anr..
Respondent Name: National Insurance Company Ltd. & Ors..
Judgment By: Justice V. Ramasubramanian, Justice N.V. Ramana.
Place Of Incident: India.
Judgment Date: 08-01-2020.

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