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Rojalini Nayak and Ors. vs. Ajit Sahoo and Ors.

Not available · 2024 INSC 584Decided 7 Aug 2024
Not available
Justice C.T. Ravikumar · Justice Sanjay Karol

Background

The husband of the claimant-appellant, a "Khalasi" (helper) working on an ambulance, died when the ambulance collided with a truck in Odisha in 2010. His widow, mother, and two sons sought compensation. The Motor Accident Claims Tribunal dismissed the claim entirely, finding no rash or negligent driving by the truck driver. On appeal, the High Court of Orissa held the truck's insurers partly liable and awarded compensation of about Rs.2,05,000 (after adjusting an amount already paid by the ambulance owner), applying a 25% addition for future prospects and deducting one-third of the income for personal expenses. The family appealed to the Supreme Court seeking a higher, correctly computed amount.

Decision Breakdown

The Supreme Court held that the High Court had used incorrect formulas under the binding Constitution Bench precedent in National Insurance Co. Ltd. v. Pranay Sethi. Since the deceased had four dependents (not three), the deduction for personal expenses should have been one-fourth of his income, not one-third. Since the deceased held a permanent job and was aged between 40-50 years, the addition for future prospects should have been 30% (not 25%) of his actual salary. The conventional heads of compensation (loss of consortium, loss of estate, funeral expenses) were also recalculated using the Pranay Sethi formula with periodic 10% enhancements, raising the loss of consortium component substantially. Applying the corrected figures, the Court raised the final compensation payable (after adjusting the amount already received) to Rs.3,81,900, along with interest at 7.5% per annum, and modified the High Court's judgment accordingly.

Lesson Learnt

Motor accident compensation for dependents of a deceased breadwinner must be calculated strictly using the standardised formulas laid down by the Supreme Court in Pranay Sethi (correct deduction fraction based on actual number of dependents, correct future-prospects percentage based on age and job permanency, and periodically enhanced conventional heads). Courts below cannot apply arbitrary or outdated percentages.

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

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