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Smt. Shantaben & Ors. v. National Power Transport & Anr.

Civil Appeal · 2019 INSC 323Decided 6 Mar 2019
Civil Appeal No. 2523 of 2019
Justice Abhay Manohar Sapre · Justice Dinesh Maheshwari

Background

The victim, a 23-year-old man running a flour mill, died in 1987 after being struck from behind by a bus. His widow, parents, and sisters claimed compensation before the Motor Accidents Claims Tribunal, which assessed his income conservatively and awarded Rs. 3,00,000. The Gujarat High Court dismissed the claimants' appeal for enhancement, finding the Tribunal's income estimate already generous. The Supreme Court later granted limited leave specifically to examine whether future prospects had been properly added to the compensation, in light of its Constitution Bench ruling in National Insurance Co. Ltd. v. Pranay Sethi.

Decision Breakdown

The Court held that both the Tribunal and the High Court had approached the assessment of compensation in an overly uncertain and restrictive manner. Applying the Pranay Sethi principles, since the deceased was self-employed and 23 years old, the Court added 40% of his established income towards future prospects, adjusted the multiplier to 18 and the deduction for personal expenses to one-fourth (given four dependents), and recalculated the loss of dependency. This resulted in an additional Rs. 1,20,240 being awarded on top of the original amount, apportioned between the widow (50%) and the two sisters (25% each), with directions on the interest payable if not deposited within 30 days.

Lesson Learnt

When a victim of a fatal accident was young and self-employed, compensation calculations must include an addition for "future prospects", the income increase they would likely have seen over their career, and courts applying outdated or overly conservative formulas can have their awards corrected on appeal using standardized Supreme Court guidelines.

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

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