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Narayan & Ors. vs Manager, Royal Sundaram Alliance Insurance Co. Ltd. & Anr.

Civil Appeal · 2022 INSC 999Decided 22 Sept 2022
Civil Appeal No. 6855 of 2022
Hemant Gupta · Sudhanshu Dhulia

Background

On 30 March 2010, a young man named Kiran was riding a two-wheeler from Sholapur to Pandharpur, Maharashtra, when a Heavy Goods Vehicle crashed into him, killing him on the spot. His parents and younger brother filed a compensation claim before the Motor Accident Claims Tribunal against the vehicle's insurer. The Tribunal awarded compensation, which the High Court of Karnataka (Kalaburagi Bench) later increased on appeal by revising the deceased's assumed income and the applicable multiplier. The claimants then appealed further to the Supreme Court, seeking a still-higher award.

Decision Breakdown

The Supreme Court found that both the Tribunal and the High Court had erred in not granting "future prospects" to the claimants, a component mandated by the Court's earlier decision in National Insurance Company v. Pranay Sethi (2017). Applying a 40% addition for future prospects (appropriate given the deceased's age), the Court allowed the appeal and recalculated the total compensation payable to Rs. 37,80,000/-, along with 7.5% interest (correcting the 6% rate earlier fixed by the High Court, which the Court held should have been 7.5%).

Lesson Learnt

In fatal motor accident claims involving a young deceased, courts must factor in "future prospects", the likely rise in the deceased's income over time, when calculating compensation, as settled by binding Supreme Court precedent; families should not accept an award that omits this component without checking whether it was properly applied.

Official source (sci.gov.in)View Judgment (PDF)

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