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Motor Accident Compensation LawSupreme Court of India

T. Rajamoni (D) Thr. LRs. v. The Manager, Oriental Insurance Co. Ltd.

Civil Appeal · 2025 INSC 107Decided 24 Jan 2025
C.A. Nos.-000999-001000 of 2025 (arising from SLP (C) Nos. 20702-03 of 2021)
Justice K.V. Viswanathan · Justice S.V.N. Bhatti

Background

A mason working as a pedestrian was hit from behind by a rashly driven autorickshaw in 2011, suffering serious head injuries including skull fractures that left him with a claimed 70% disability. A Motor Accidents Claims Tribunal awarded him about Rs. 21.35 lakh in compensation, using a standard "multiplier" method to calculate his future loss of income. The insurer appealed, and the Madras High Court (Madurai Bench) cut this down sharply to about Rs. 6.69 lakh, rejecting the multiplier method and instead awarding a flat Rs. 3,000 per percentage of disability: a decision the claimant also challenged. The claimant passed away while the case was pending, and his legal heirs continued the appeal.

Decision Breakdown

The Supreme Court agreed that a simple multiplier was not appropriate on these facts, but found the High Court's flat Rs. 3,000-per-percentage figure had no real justification and undervalued the loss suffered by a working mason with serious head injuries and lasting disability. Taking into account his actual earning capacity, age, and the medical evidence of his condition (including that the treating doctor's evidence went unchallenged), the Court fixed a lump-sum figure of Rs. 7.5 lakh for loss of income and future earnings, bringing the total compensation to Rs. 12,09,017, with 7.5% interest from the date of the claim.

Lesson Learnt

Compensation for loss of earning capacity in an accident case must be tied to the real-world impact of the injury on a person's ability to work. Courts should not mechanically apply either a rigid multiplier or an arbitrary flat rate without reasoned justification.

T. Rajamoni (D) Thr. LRs. v. The Manager, Oriental Insurance Co. Ltd. – Legal Case Shots | LegalAware