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National Insurance Company Ltd. v. Chamundeswari

Civil Appeal · 2021 INSC 592Decided 1 Oct 2021
Civil Appeal No. 6151 of 2021
Justice R. Subhash Reddy · Justice Hrishikesh Roy

Background

A 35-year-old HR manager died in a road accident when a van ahead of his car suddenly turned right without signalling, causing a collision. His widow and minor son sought compensation from the insurer of the vehicles involved. The Motor Accident Claims Tribunal initially found both drivers partly at fault (75% the deceased, 25% the van driver) and awarded a modest sum, but the Madras High Court, on appeal by the family, held the van driver was solely responsible and substantially raised the compensation to over Rs. 1.85 crore based on the deceased's actual salary. The insurance company challenged this enhanced award before the Supreme Court.

Decision Breakdown

The Supreme Court upheld the High Court's finding that the accident was caused solely by the negligence of the van driver, relying on eyewitness testimony from the car's occupants, which it held should be given more weight than a contrary mention in the First Information Report. On the compensation amount, it found the High Court had correctly used the deceased's actual salary slip (Form-16) rather than the lower figure initially pleaded, and had properly applied the multiplier and future-prospects principles from the Court's own earlier rulings (Sarla Verma and Pranay Sethi). The insurer's appeal was accordingly dismissed, with the sum already deposited as a condition of interim relief to be released to the family with accrued interest and the balance paid within two months.

Lesson Learnt

In motor accident compensation cases, reliable eyewitness and documentary evidence (like proven salary records) presented at trial carries more weight than an initial, possibly inaccurate, account in a First Information Report, and courts will apply established formulas (multiplier plus future-prospects loading) to arrive at fair compensation.

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

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