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Nutan Rani and Anr. v. Gurmail Singh and Ors.

Civil Appeal · 2018 INSC 621Decided 20 Jul 2018
Civil Appeal No. 6639 of 2018
Chief Justice Dipak Misra · Justice A.M. Khanwilkar · Dr. Justice D.Y. Chandrachud

Background

The appellants were the heirs of a 30-year-old commission agent who died after falling from a moving bus belonging to the Chandigarh Transport Undertaking in 1994. The Motor Accident Claims Tribunal found negligence not proved and awarded only Rs. 50,000 as no-fault liability. On appeal, the Punjab and Haryana High Court drew an adverse inference against the bus operator for not producing the driver and raised the compensation to Rs. 3,98,500, but reduced the interest rate from 12% to 6%. The heirs appealed to the Supreme Court seeking a higher amount.

Decision Breakdown

The Supreme Court held that the High Court had erred in not adding anything for "future prospects" when computing the deceased's income, applying the Constitution Bench ruling in National Insurance Co. Ltd. v. Pranay Sethi. It recalculated the compensation by adding 40% for future prospects (given the deceased's age of 30), deducting one-third for personal expenses, and applying a multiplier of 17, arriving at a total compensation of Rs. 6,41,200 (including loss of consortium, loss of estate, and funeral expenses), with 9% annual interest from the date of the claim petition. The appeal was allowed on these terms with no order as to costs.

Lesson Learnt

In fatal motor accident claims, courts must add a percentage for "future prospects" to a deceased's income before calculating compensation, per the Pranay Sethi formula: families should check that this component has been included when compensation is awarded.

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

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