Supreme Court Modifies Compensation in Fatal Bike Accident Case, Expands Consortium Rights

The Supreme Court of India recently delivered a significant judgment in Sri Malakappa & Ors. vs. The IFFCO Tokio General Insurance Company Limited & Anr., modifying the compensation awarded to the family of a deceased pillion rider in a motorcycle accident. The judgment provides important clarifications on calculating compensation and recognizing the rights of all dependents in motor accident claims.

The case involved the death of a woman in a motorcycle accident on February 22, 2015. The claimants – her husband and two children – had sought compensation before the Motor Accidents Claims Tribunal, which initially awarded ₹18,81,966. The insurance company appealed to the High Court, which made certain modifications to the award. The claimants then approached the Supreme Court seeking proper compensation.

The Supreme Court bench comprising Justices Sudhanshu Dhulia and K. Vinod Chandran made several important observations while recalculating the compensation. Regarding income assessment, the Court noted: “The High Court enhanced the income to ₹8,000/-; though there was no appeal by the claimants.” The Court maintained this figure as there was no appeal against it.

Read also: https://judgmentlibrary.com/supreme-court-enhances-compensation-in-fatal-accident-case-clarifies-insurance-liability/

On the crucial question of dependency, the Court disagreed with the lower courts’ finding that the husband wasn’t dependent, observing: “However, we are of the opinion that since there was no employment specified of the husband, it cannot be assumed that he would not have been at least partially dependent on the income of the deceased.” This led the Court to consider the family as comprising four members rather than three.

The judgment applied the principles established in Pranay Sethi and Somwati cases. On future prospects, the Court stated: “The future prospects of 50% as awarded by the Tribunal was deleted which is proper, but this has to be granted at the rate of 40%.” Regarding consortium, it expanded the compensation beyond just spousal loss, noting: “In New India Assurance Company vs. Somwati held that loss of consortium is not restricted to the wife alone but has to be awarded to the children and parents.”

The final compensation was calculated as: Loss of dependency (₹16,12,800), Loss of consortium (₹1,20,000 for spouse and children), Medical expenses (₹21,966), Transport and funeral expenses (₹15,000), and Loss of estate (₹15,000), totaling ₹17,84,766. The Court specifically excluded ‘loss of love and affection’ as this was covered under consortium.

This judgment is significant as it reaffirms the principle of ‘just compensation’ while providing clearer guidelines on calculating various heads of compensation in motor accident claims, particularly regarding dependency and consortium rights for all family members.

Read also: https://judgmentlibrary.com/supreme-court-directs-states-to-expedite-disbursement-of-unclaimed-accident-and-labor-compensation/

Petitioner Name: Sri Malakappa & Ors..
Respondent Name: The IFFCO Tokio General Insurance Company Limited & Anr..
Judgment By: Justice Sudhanshu Dhulia, Justice K. Vinod Chandran.
Place Of Incident: Not specified in judgment.
Judgment Date: 29-04-2025.
Result: allowed.

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