Supreme Court Enhances Compensation in Motor Accident Case Involving Air Hostess Trainee

The case of Joginder Singh & Another v. ICICI Lombard General Insurance Company revolves around a tragic motor accident that resulted in the death of a young air hostess trainee, Ambika Thakur. The Supreme Court was called upon to determine whether the compensation awarded by the Motor Accident Claims Tribunal (MACT) and the High Court was just and whether an enhancement was necessary.

The Court ruled in favor of the appellants, significantly increasing the compensation amount by applying the correct multiplier and adding future prospects to the deceased’s income. This judgment reaffirms the principles of fair compensation under the Motor Vehicles Act, 1988.

Background of the Case

The case originated from a fatal accident that took place on September 10, 2009. The sequence of events was as follows:

• Ambika Thakur, a 20-year-old air hostess trainee at Frankfinn Institute, Chandigarh, was traveling in a Verna car from Chandigarh to Bhatinda.
• The car collided with a Tata Ace vehicle (bearing Registration No. PB-03T-4804) that had suddenly stopped, causing a head-on collision.
• Ambika Thakur died on the spot due to the impact.
• The vehicle that caused the accident was insured with ICICI Lombard General Insurance Company.

Her parents (the appellants) filed a compensation claim before the Motor Accident Claims Tribunal (MACT), Shimla, demanding ₹25,00,000.

Compensation Awarded by MACT and High Court

The MACT, in its decision on July 15, 2014, awarded ₹10,40,000 along with 7.5% annual interest. The compensation was structured as follows:

• Notional income: ₹15,000 per month
• Deduction for personal expenses: 50% (as she was unmarried)
• Multiplier applied: 11 (based on the mother’s age)
• Loss of love and affection: ₹25,000
• Funeral expenses: ₹25,000

Dissatisfied with this amount, the appellants filed an appeal before the High Court of Himachal Pradesh, which upheld the MACT’s decision on May 22, 2015.

Arguments by the Appellants (Parents of the Deceased)

The appellants challenged the compensation awarded, arguing:

• The wrong multiplier was applied; instead of using the deceased’s age, the tribunal incorrectly considered the mother’s age.
• As per Sarla Verma v. Delhi Transport Corporation (2009), the correct multiplier for a 20-year-old should be 18.
• The courts failed to award compensation for future prospects, which should have been added to the deceased’s income.
• Loss of estate and consortium were either ignored or inadequately compensated.

Arguments by the Respondent (ICICI Lombard General Insurance)

The insurance company defended the compensation amount, arguing:

• The deduction of 50% from the deceased’s income was justified.
• As per New India Assurance Co. Ltd. v. Shanti Pathak (2007), the age of the dependent (mother) should determine the multiplier.
• Future prospects were speculative and should not be included.

Key Observations by the Supreme Court

The Supreme Court found errors in the lower courts’ approach and ruled:

• The multiplier should be based on the deceased’s age, not the parents’ age. As Ambika Thakur was 20, a multiplier of 18 should be applied.
• Future prospects must be included at 40% of the income, as mandated in National Insurance Co. Ltd. v. Pranay Sethi (2017).
• The courts failed to award an adequate amount for loss of estate and consortium.

Supreme Court’s Judgment

The Supreme Court recalculated the compensation and significantly increased the award:

• Income: ₹15,000 per month
• Future prospects: ₹6,000 per month (40% increase)
• Total monthly income: ₹10,500 (after 50% deduction for personal expenses)
• Multiplier applied: 18
• Loss of future income: ₹22,68,000 (₹10,500 × 12 × 18)
• Enhanced compensation: ₹12,78,000
• Loss of Consortium: ₹40,000 for each parent
• Loss of Estate: ₹15,000
• Total Enhanced Compensation: ₹13,48,000

The Court ordered the insurance company to pay the enhanced amount within one month, with an interest rate of 7.5% per annum from the date of filing the claim.

Implications of the Judgment

The ruling sets important legal precedents:

• Correct multiplier application: Courts must use the deceased’s age to determine compensation.
• Inclusion of future prospects: Compensation must consider potential career growth, as per Pranay Sethi.
• Fair assessment of losses: Compensation for consortium and loss of estate must be appropriately awarded.
• Insurance company obligations: Insurers must honor compensation claims fairly and promptly.

Conclusion

The Supreme Court’s decision in Joginder Singh & Another v. ICICI Lombard General Insurance Company ensures that victims’ families receive just compensation. By correcting the multiplier, including future prospects, and ensuring fair assessment of losses, this judgment strengthens the rights of claimants in motor accident cases.

This ruling will serve as an important precedent, ensuring that courts follow established principles in awarding compensation and preventing insurance companies from undervaluing claims.

Petitioner Name: Joginder Singh & Another.
Respondent Name: ICICI Lombard General Insurance Company.
Judgment By: Justice Indu Malhotra, Justice Sanjiv Khanna.
Place Of Incident: Chandigarh to Bhatinda.
Judgment Date: 14-08-2019.

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