Kunjan Sadana & Anr. v. Mahesh Kumar & Ors.
Background
A 19-year-old bachelor, Yitesh Sadana alias Prince, died in a motor vehicle accident in 2007 caused by the negligent driving of a bus driver, leaving behind his widowed mother and minor brother as claimants. The Motor Accident Claims Tribunal initially awarded them Rs. 3,72,620, which the Delhi High Court later enhanced to Rs. 5,02,620 on appeal, but the claimants sought further enhancement before the Supreme Court, arguing the wrong multiplier had been used and future income prospects had been ignored.
Decision Breakdown
The Supreme Court held that the compensation calculation had two errors: first, the lower courts had failed to add 40% of the deceased's income towards "future prospects" as mandated for self-employed or fixed-salary persons under 40 years by the Constitution Bench ruling in National Insurance Co. Ltd. v. Pranay Sethi; and second, they had wrongly applied a multiplier of 15 based on the mother's age instead of the correct multiplier of 18 based on the deceased's own age of 19, following the three-judge bench ruling in Royal Sundaram Alliance Insurance Co. v. Mandala Yadagari Goud. Recalculating with the correct 40% future-prospects addition, 50% deduction for personal expenses (as the deceased was a bachelor), and multiplier of 18, the Court arrived at a total compensation of Rs. 6,62,448, an increase of Rs. 1,60,000 over what had already been awarded. The insurance company was directed to deposit this additional amount with 7% simple interest from the date of the claim petition within two months.
Lesson Learnt
In fatal motor accident claims, compensation must be calculated using the deceased's own age (not a dependent's age) to select the correct multiplier, and must include an addition for lost future income prospects where the victim was young and self-employed or on a fixed salary: claimants should check these specific components if a compensation award seems low.