Supreme Court increases motor accident award to over Rs. 14 lakh, directs deposit and fixed‑deposit arrangement for minors
A Bench of Justices Sudhanshu Dhulia and Aravind Kumar heard an appeal by the legal heirs of a deceased victim seeking enhancement of compensation awarded in a Motor Vehicles Act claim under Section 166. The appeal challenged the quantum fixed by the Punjab and Haryana High Court which had enhanced the tribunal award but declined the full relief sought by the claimants.
The Court allowed the appeal in part and enhanced the compensation, holding that the deceased’s true monthly income included allowances shown in the salary slip and that applicable principles in Sarla Verma and later authorities required inclusion of such perks for computation of “just compensation”. The Court accepted that the deceased was earning Rs. 6,500 per month, applied the statutory deduction of one‑third, added 50% future prospects and adopted a multiplier of 16. The Court, in its reasoning, observed: The Court also repeated that "Section 168 of the Act uses the word 'just compensation' which, in our opinion, should be assigned a broad meaning."
Background The deceased, aged about 35 years, died on 16 February 2009 when he was struck by a Santro car driven rashly on Sohna‑Gurgaon Road. The claimants — his wife and two minor children — filed a claim petition before the Motor Accident Claims Tribunal, Gurgaon, seeking Rs. 25 lakh. The Tribunal awarded Rs. 2,54,720 with interest at 7% per annum. On appeal the High Court accepted the Tribunal’s income determination in part but added 50% future prospects and applied multiplier 16 to award a total of Rs. 7,23,680 with interest.
The claimants challenged in this Court, contending that the Tribunal and High Court erred in excluding house rent allowance and other allowances shown in the salary certificate (Ex. P6) and in making inadequate awards under heads such as funeral, loss of estate and consortium; they relied on decisions including Pranay Sethi (Constitution Bench) and National Insurance Co. v. Indira Srivastava. The insurer supported the impugned order.
The Supreme Court analysed the documentary record and precedent. It held that where allowances formed part of salary and were regularly received and used for family support, they had to be included in monthly income for computing dependency, subject to statutory deductions. Applying these principles, the Court treated monthly salary as Rs. 6,500; deducted one‑third for personal expenses (leaving Rs. 4,333), added 50% future prospects (Rs. 2,167), reverting the effective monthly income to Rs. 6,500, and applied multiplier 16. The Court awarded Rs. 12,48,000 for loss of dependency; Rs. 48,400 to the wife for spousal consortium; Rs. 48,400 each to the two children for parental consortium; and Rs. 18,150 each for loss of estate and funeral expenses. The aggregate compensation amounted to Rs. 14,29,500.
The Court directed the respondents to deposit Rs. 14,29,500 with interest at 7% per annum from the date of filing of the petition until deposit, excluding the period of delay condoned, within eight weeks. It ordered distribution in the ratio 50:25:25 (wife:child1:child2). The award to the wife, with proportionate interest, was to be released to her; amounts due to the minors were to be kept in fixed deposits in a nationalised bank in the wife’s name, with periodic interest payable to the wife for the minors’ benefit and capital released to the minors on proper identification. The Court declined interest for the delayed prosecution period as previously ordered, and disposed the appeal accordingly.
Case Details: Case No.: 2025 INSC 938 (Diary No. 47285 of 2018) Case Title: Kavita Devi and Others v. Sunil Kumar and Another Appearances: For the Petitioner(s): Mr. Fuzail Ahmad Ayyubi, Advocate For the Respondent(s): Ms. Suman Bagga, Advocate (for the Insurance Company)