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Reliance General Insurance Company Ltd v. Shalu Sharma

Civil Appeal · 2018 INSC 94Decided 2 Feb 2018
Civil Appeal No. 000767 of 2018
Chief Justice Dipak Misra · Justice A.M. Khanwilkar · Dr. Justice D.Y. Chandrachud

Background

The deceased, Narinder Sharma, a 42-year-old self-employed businessman running a cable network business in Delhi, died in a motor accident in September 2013. The Motor Accident Claims Tribunal (MACT) awarded his dependents compensation of about Rs 30,26,810, adding 30% for "loss of future prospects." The insurer's appeal to the Delhi High Court challenged only this 30% future-prospects component, but the High Court upheld the Tribunal's award, so the insurer appealed further to the Supreme Court.

Decision Breakdown

The Supreme Court applied the Constitution Bench ruling in National Insurance Co. Ltd v. Pranay Sethi, which fixes future-prospects additions by age band: 40% addition if the deceased was below 40, 25% if between 40-50, and 10% if between 50-60. Since the deceased was 42, the Court held only a 25% addition (not 30%) was warranted. Recalculating on this basis, along with conventional heads (loss of estate, loss of consortium, funeral expenses) added per Pranay Sethi, the Court fixed total compensation at Rs 27,66,522 with 9% annual interest, and directed the insurer to deposit the balance within eight weeks, with no recovery if claimants had already withdrawn more.

Lesson Learnt

In motor accident compensation claims involving a self-employed deceased, courts must apply the fixed, age-based percentage slabs for "future prospects" laid down in Pranay Sethi, rather than an ad hoc percentage, ensuring consistency in how compensation is calculated across similar cases.

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

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