Supreme Court: Motor accident claim tribunal can not grant compensation under the head of pain and suffering by family members of the claimant

 It is perceptible that the High Court has deleted the amount awarded under the head of pain and suffering by family members of the claimant and the amount granted towards loss of marital life. There is no iota of evidence with regard to loss of marital life, hence, we do not find any error in the said deletion. As far as grant of compensation on the score of pain and suffering suffered by the family members of claimant is concerned, the same is not permissible and, accordingly, we hold that that has been correctly deleted. {Para 30}

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 7603 of 2012.

Decided On: 19.10.2012

K. Suresh Vs. New India Assurance Company Ltd. and Ors.

Hon'ble Judges/Coram:

K.S. Panicker Radhakrishnan and Dipak Misra, JJ.

Author: Dipak Misra, J.

Citation:  MANU/SC/0908/2012, (2012) 12 SCC 274.

Read full Judgment here: Click here. 

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Supreme Court: Motor accident claim tribunal can not grant compensation to claimant for his inability to participate in public functions

 The High Court has deleted an amount of Rs. 3,00,000/- and a sum of Rs. 2,00,000/- towards mental agony and inability on the part of the claimant to participate in public functions respectively. We have already determined Rs. 2,00,000/- under the heading of pain and suffering already suffered and to be suffered and Rs. 2,50,000/- under the heading of permanent disability and hence, no different sum need be awarded under the heading of mental agony. As far as participation in public functions is concerned, there is no evidence in that regard and, therefore, we are disposed to think that the finding of the High Court on that score is totally justified and does not call for any interference. {Para 31}

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 7603 of 2012.

Decided On: 19.10.2012

K. Suresh Vs. New India Assurance Company Ltd. and Ors.

Hon'ble Judges/Coram:

K.S. Panicker Radhakrishnan and Dipak Misra, JJ.

Author: Dipak Misra, J.

Citation:  MANU/SC/0908/2012, (2012) 12 SCC 274.

Read full Judgment here: Click here. 

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Supreme court: While computing compensation, the approach of the Motor accident claim Tribunal should be broad-based

It is noteworthy to state that an adjudicating authority, while determining quantum of compensation, has to keep in view the sufferings of the injured person which would include his inability to lead a full life, his incapacity to enjoy the normal amenities which he would have enjoyed but for the injuries and his ability to earn as much as he used to earn or could have earned. Hence, while computing compensation the approach of the tribunal or a court has to be broad based. Needless to say, it would involve some guesswork as there cannot be any mathematical exactitude or a precise formula to determine the quantum of compensation. In determination of compensation the fundamental criterion of "just compensation" should be inhered. {Para 10}

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 7603 of 2012.

Decided On: 19.10.2012

K. Suresh Vs. New India Assurance Company Ltd. and Ors.

Hon'ble Judges/Coram:

K.S. Panicker Radhakrishnan and Dipak Misra, JJ.

Author: Dipak Misra, J.

Citation:  MANU/SC/0908/2012, (2012) 12 SCC 274.

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Supreme Court : Motor accident claim tribunal can not allow deductions from the amount of compensation on account of insurance, pensionary benefits, gratuity or grant of employment to a kin of the deceased

 The law is well settled that deductions cannot be allowed from the amount of compensation either on account of insurance, or on account of pensionary benefits or gratuity or grant of employment to a kin of the deceased. The main reason is that all these amounts are earned by the deceased on account of contractual relations entered into by him with others. It cannot be said that these amounts accrued to the dependents or the legal heirs of the deceased on account of his death in a motor vehicle accident. The claimants/dependents are entitled to 'just compensation' under the Motor Vehicles Act as a result of the death of the deceased in a motor vehicle accident. Therefore, the natural corollary is that the advantage which accrues to the estate of the deceased or to his dependents as a result of some contract or act which the deceased performed in his life time cannot be said to be the outcome or result of the death of the deceased even though these amounts may go into the hands of the dependents only after his death. {Para 12}

13. As far as any amount paid under any insurance policy is concerned whatever is added to the estate of the deceased or his dependents is not because of the death of the deceased but because of the contract entered into between the deceased and the insurance company from where he took out the policy. The deceased paid premium on such life insurance and this amount would have accrued to the estate of the deceased either on maturity of the policy or on his death, whatever be the manner of his death. These amounts are paid because the deceased has wisely invested his savings. Similar would be the position in case of other investments like bank deposits, share, debentures etc.. The tort-feasor cannot take advantage of the foresight and wise financial investments made by the deceased.

14. As far as the amounts of pension and gratuity are concerned, these are paid on account of the service rendered by the deceased to his employer. It is now an established principle of service jurisprudence that pension and gratuity are the property of the deceased. They are more in the nature of deferred wages. The deceased employee works throughout his life expecting that on his retirement he will get substantial amount as pension and gratuity. These amounts are also payable on death, whatever be the cause of death. Therefore, applying the same principles, the said amount cannot be deducted.

15. As held by the House of Lords in Perry v. Cleaver MANU/UKHL/0008/1969 : 1969 ACJ 363 the insurance amount is the fruit of premium paid in the past, pension is the fruit of services already rendered and the wrong doer should not be given benefit of the same by deducting it from the damages assessed.

 IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 10588-89 of 2018.

Decided On: 12.10.2018

Sebastiani Lakra and Ors. Vs. National Insurance Company Ltd. and Ors.

Hon'ble Judges/Coram:

Madan B. Lokur, S. Abdul Nazeer and Deepak Gupta, JJ.

Author: Deepak Gupta, J.

Citation:  MANU/SC/1162/2018,(2019) 17 SCC 465.

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Supreme Court: What deductions are not permissible in calculation of total income of deceased in case of Motor accident?

 a. Computation of Income

8. In the case of National Insurance Co. Ltd. v. Indira Srivastava and Ors.   MANU/SC/8201/2007 : AIR 2008 SC 845, S.B. Sinha J, has observed that "The term 'income' has different connotations for different purposes. A court of law, having regard to the change in societal conditions must consider the question not only having regard to pay packet the employee carries home at the end of the month but also other perks which are beneficial to the members of the entire family. Loss caused to the family on a death of a near and dear one can hardly be compensated on monitory terms." His Lordship also stated that if some facilities were being provided whereby the entire family stood to benefit, the same must be held to be relevant for the purpose of computation of total income on the basis of which the amount of compensation payable for the death of the kith and kin of the applicants was required to be determined. This Court held that superannuation benefits, contributions towards gratuity, insurance of medical policy for self and family and education scholarship were beneficial to the members of the family. This Court clarified that by opining that 'just compensation' must be determined having regard to the facts and circumstances of each case. The basis for considering the entire pay packet is what the dependents have lost in view of death of the deceased. It is in the nature of compensation for future loss towards the family income" and that "the amounts, therefore, which were required to be paid to the deceased by his employer by way of perks, should be included for computation of his monthly income as that would have been added to his monthly income by way of contribution to the family as contradistinguished to the ones which were for his benefit. We may, however, hasten to add that from the said amount of income, the statutory amount of tax payable thereupon must be deducted."

9. In Raghuvir Singh Matolya and Ors. v. Hari Singh Malviya and Ors.   MANU/SC/0853/2009 : (2009) 15 SCC 363, this Court has observed that dearness allowance and house rent allowance should be included for computation of income of the deceased.

11. Based on the aforementioned judgments, we are of the view that deductions made by the Tribunal on account of HRA, CCA and medical allowance are done on an incorrect basis and should have been taken into consideration in calculation of the income of the deceased. Further, deduction towards EPF and GIS should also not have been made in calculating the income of the deceased.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 1440 of 2011.

Decided On: 07.02.2011

Sunil Sharma and Ors. Vs. Bachitar Singh and Ors.

Hon'ble Judges/Coram:

G.S. Singhvi and A.K. Ganguly, JJ.

Author: A.K. Ganguly, J.

Citation:  MANU/SC/0413/2011,(2011) 11 SCC 425.

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Supreme court judgment laying down notional income in case of child death in motor accident as Rs 30,000/- or Rs 25000/-

 In view of the foregoing decisions, it is apparent that in the cases of child death, the notional income of Rs. 15,000/- as specified in the IInd Schedule of M.V. Act has been enhanced on account of devaluation of money and value of rupee coming down from the date on which the IInd Schedule of M.V. Act was introduced and the said notional income was treated as Rs. 30,000/- in the case of Kishan Gopal (supra) and Rs. 25,000/- in Kurvan Ansari (supra) in age group of 10 and 7 years respectively. {Para 12}

13. Thus applying the ratio of the said judgments, looking to the age of the child in the present case i.e. 12 years, the principles laid down in the case of Kishan Gopal (supra) are aptly applicable to the facts of the present case. As per the ocular statement of the mother of the deceased, it is clear that deceased was a brilliant student and studying in a private school. Therefore, accepting the notional earning Rs. 30,000/- including future prospect and applying the multiplier of 15 in view of the decision of this Court in Sarla Verma (supra), the loss of dependency comes to Rs. 4,50,000/- and if we add Rs. 50,000/- in conventional heads, then the total sum of compensation comes to Rs. 5,00,000/-.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 7255 of 2022 

Decided On: 13.10.2022

Meena Devi Vs. Nunu Chand Mahto and Ors.

Hon'ble Judges/Coram:

Sanjiv Khanna and J.K. Maheshwari, JJ.

Author: J.K. Maheshwari, J.

Citation: MANU/SC/1320/2022,(2023) 1 SCC 204.

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Supreme Court: Basic principles for determining just compensation under motor vehicles Act

While determining compensation under the Act, Section 168 of the Act makes it imperative to grant compensation that appears to be just. The Act being a social welfare legislation operates through economic conception in the form of compensation, which renders way to corrective justice.3 Compensation acts as a fulcrum to bring equality between the wrongdoer and the victim, whenever the equality gets disturbed by the wrongdoer's harm to the victim. It also endeavors to make good the human suffering to the extent possible and to also save families which have lost their breadwinners from being pushed to vagrancy. Adequate compensation is considered to be fair and equitable compensation. Courts shoulder the responsibility of deciding adequate compensation on a case-to-case basis. However, it is imperative for the courts to grant such compensation which has nexus to the actual loss. {Para 16}

17. This Court, in the case of Sarla Verma and Ors. v. DTC and Ors. MANU/SC/0606/2009 : (2009) 6 SCC 121, laid down an objective formula for calculating just compensation. According to the dictum, the three factors that need to be established are: (a) age of the deceased; (b) income of the deceased; and (c) the number of dependents.

18. Further, the issues that are to be determined by the Tribunal to arrive at the loss of dependency are: "(i) additions/deductions to be made for arriving at the income; (ii) the deduction to be made towards the personal living expenses of the deceased; and (iii) the multiplier to be applied with reference to the age of the deceased." The purpose of standardising these determinants was to bring uniformity to the decisions and settle claims without delay.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 7593 of 2022 

Decided On: 17.10.2022

Manusha Sreekumar and Ors. Vs. The United India Insurance Co. Ltd.

Hon'ble Judges/Coram:

Surya Kant and Aniruddha Bose, JJ.

Author: Surya Kant, J.

Citation: MANU/SC/1352/2022.

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Whether shockingly inadequate compensation granted in motor accident claim petition can be upheld?

In Managing Director, Metropolitan Transport V. Ramarao MANU/TN/1420/2013 : (2013)5MLJ 715, learned Single Judge of the Madras High Court, after detailed consideration of the legal provisions as well as the precedents has held that it is the duty of the appeal court to award just compensation irrespective of whether or not the same may have been claimed by the claimants or not. In Ningamma and anr. v. United India Insurance Company Limited - MANU/SC/0802/2009 : (2009) 13 SCC 710, the Hon'ble Supreme Court at paragraph 34 has held that section 166 of the MV Act deals with "just compensation" and even if in the pleadings no specific claim was made, a party should not be deprived from getting "just compensation" in case the claimant is able to make out a case under any provision of law. Needless to say, the M.V. Act is beneficial and welfare legislation. In fact, the court is duty bound and entitled to award "just compensation" irrespective of the fact whether any plea was raised in respect of the claimant or not. Accordingly, even the third point of determination is liable to be decided against the appellants and in favour of the claimants.

25. In this case, the deceased Kailashchandra was an ex serviceman who had served the Indian Army for almost two decades prior to his unfortunate demise in the road accident. As noted earlier, the compensation amount awarded by the MACT was shockingly inadequate and therefore, cannot be styled as 'just compensation'. Kailashchandra's widow, lost her husband, at a relatively young age and yet, the MACT awarded only Rs. 5,000/- towards loss of consortium. The two children Dinesh and Sangita, lost their father, at a age when they required him the most and yet the MACT has awarded no compensation whatsoever towards loss of love and affection. Kailashchandra's mother was also awarded no compensation whatsoever for loss of love and affection. There was no award made towards loss of estate or towards funeral expenses. Upon due consideration of the material on record compensation of Rs. 9,75,000/-, together with interest thereon at the rate of 8% per annum has been determined.

IN THE HIGH COURT OF BOMBAY

First Appeal No. 103 of 2017 and Civil Application No. 2363 of 1996

Decided On: 15.03.2017

 The State of Maharashtra and Ors. Vs. Kamaladevi Kailashchandra Kaushal and Ors.

Hon'ble Judges/Coram:

M.S. Sonak, J.

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Supreme Court: Procedure to be followed by court for deposit of compensation amount in fixed deposit in motor accident claim petition

In a case of compensation for death it is appropriate that the Tribunals do keep in mind the principles enunciated by this Court in Union Carbide Corporation v. Union of India MANU/SC/0058/1992 : AIR1992SC248 in the matter of appropriate investments to safeguard the feed from being frittered away by the beneficiaries owing to ignorance, illiteracy and susceptibility to exploitation. In that case approving the judgment of the Gujarat High Court in Muljibhai Ajarambhai Harijan v. United India Insurance Co. Ltd. MANU/GJ/0141/1982 : (1982)1GLR756, this Court offered the following guidelines:--

(i) The Claims Tribunal should, in the case of minors, invariably order the amount of compensation awarded to the minor be invested in long term fixed deposits at least till the date of the minor attaining majority. The expenses incurred by the guardian or next friend may, however, be allowed to be withdrawn:

(ii) In the case of illiterate claimants also the Claims Tribunal should follow the procedure set out in (i) above, but if lump sum payment is required for effecting purchases of any movable or immovable property such as, agricultural implements, rickshaw, etc., to earn a living, the Tribunal may consider such a request after making sure that the amount is actually spent for the purpose and the demand is not a ruse to withdraw money;

(iii) In the case of semi-literate persons the Tribunal should ordinarily resort to the procedure set out at (i) above unless it is satisfied, for reasons to be stated in writing, that the whole or part of the amount is required for expanding and existing business or for purchasing some property as mentioned in (ii) above for earning his livelihood, in which case the Tribunal will ensure that the amount is invested for the purpose for which it is demanded and paid;

(iv) In the case of literate persons also the Tribunal may resort to the procedure indicated in (i) above, subject to the relaxation set out in (ii) and (iii) above, if having regard to the age, fiscal background and strata of society to which the claimant belongs and such other considerations, the Tribunal in the larger interest of the claimant and with a view to ensuring the safety of the compensation awarded to him thinks it necessary to do order;

(v) In the case of windows the Claims Tribunal should invariably follow the procedure set out in (i) above;

(vi) In personal injury cases if further treatment is necessary the Claims Tribunal on being satisfied about the same, which shall be recorded in writing, permit withdrawal of such amount as is necessary for incurring the expenses for such treatment;

(vii) In all cases in which investment in long term fixed deposits is made it should be on condition that the Bank will not permit any loan or advance on the fixed deposit and interest on the amount invested is paid monthly directly to the claimant or his guardian, as the case may be;

(viii) In all cases Tribunal should grant to the claimants liberty to apply for withdrawal in case of an emergency. To meet with such a contingency, if the amount awarded is substantial, the Claims Tribunal may invest it in more than one Fixed Deposit so that if need be one such F.D.R. can be liquidated."

30. Further, in Lilaben Udesing Gobel v. Oriental Insurance Co. Ltd. and Ors. MANU/SC/0420/1996 : [1996]3SCR450 the Court relied upon the said directions and further held that in Union Carbide Corporation's case (supra), this Court did not include the clause regarding literate persons' compensation and directed that it should be given the same treatment in case the Court found it necessary to do so to protect the compensation awarded to them. The Court further added one guideline as under:--

"We must add one further guideline to the effect that when the amount is invested in a fixed deposit, the bank should invariably be directed to affix a note on the fixed deposit receipt that no loan or advance should be granted on the strength of the said FDR without the express permission of the Court/Tribunal which ordered the deposit. This will eliminate the practice of taking loans which may be up to 80% of the amount invested and thereby defeating the very purpose of the order. We do hope that the Courts/Tribunal in the country will not succumb to the temptation of permitting huge withdrawals in the hope of disposing of the claim. We are sure that the Courts/Tribunals will realise their duty towards the victims of the accident so that a large part of the compensation amount is not lost to them. The very purpose of laying down the guidelines was to ensure the safety of the amount so that the claimants do not become victims of unscrupulous persons and unethical agreements or arrangements. We do hope our anxiety to protect the claimants from exploitation by such elements will be equally shared by the Courts Tribunals."

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 7989 of 2002

Decided On: 03.12.2002

Nagappa Vs. Gurudayal Singh and Ors.

Hon'ble Judges/Coram:

M.B. Shah, B.P. Singh and H.K. Sema, JJ.

Citation:  (2009) 13 SCC 710

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