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Motor Accident Compensation LawSupreme Court of India

Smt. Sunita Tokas & Anr. v. New India Insurance Co. Ltd. & Anr.

Civil Appeal · 2019 INSC 912Decided 16 Aug 2019
Civil Appeal No. 6339 of 2019
Justice Indu Malhotra · Justice Sanjiv Khanna

Background

The appellants' 21-year-old son, a trained competitive swimmer, died when the two-wheeler he was riding as a pillion passenger crashed at night into an unlit, stationary truck parked in the middle of a Delhi road. The Motor Accident Claims Tribunal awarded his parents about Rs 14.87 lakh in compensation; on cross-appeals by both sides, the Delhi High Court reduced this to about Rs 9.25 lakh, using a lower assumed income for the deceased and a multiplier based on his mother's age rather than his own.

Decision Breakdown

The Supreme Court held the High Court had erred on both points. Settled law (the Sarla Verma line of cases, affirmed by a Constitution Bench in Pranay Sethi) requires that the multiplier used to calculate loss of future income be based on the age of the deceased, not a surviving dependant: for a 21-year-old, the correct multiplier was 18, not 15. The Court also raised the assumed monthly income given the deceased's proven earning potential as a trained, prize-winning swimmer, and added the standard statutory addition for "future prospects" that the lower courts had failed to grant. Recalculating on this basis, the Court enhanced the total compensation to about Rs 20.64 lakh, roughly Rs 11.39 lakh more than the High Court had awarded, payable with interest.

Lesson Learnt

In a motor accident death claim, the multiplier used to work out loss of future income must be based on the deceased person's own age, not a surviving relative's age: a detail that can make a significant difference to the final compensation amount.

Smt. Sunita Tokas & Anr. v. New India Insurance Co. Ltd. & Anr. – Legal Case Shots | LegalAware