Motor Vehicles Act, 1988 – Sections 166 and 168 – “Just compensation” – Determination – Foundational principles reiterated.
Compensation under Sections 166 and 168 is intended to place dependants of a deceased victim in a position approximating the financial status they would have enjoyed had the deceased lived his natural span. It is neither a windfall nor a bonanza. Determination is based on fairness, reasonableness and accepted legal standards, keeping in view imponderables and contingencies. Award must be “just” – not arbitrary, not niggardly. (Paras 12–14)
Income assessment – Documentary proof – Salary certificate and employer’s testimony – Income cannot be reduced on conjecture.
Where salary certificate (Exhibit P-14) and affidavit of employer established that deceased was earning ₹10,000 per month as a driver, and such evidence was not impeached by insurer, it was impermissible to assess income at a lower figure. Determination of income must rest on proved material and not assumptions divorced from evidence. Monthly income fixed at ₹10,000. (Paras 16)
Future prospects – Fixed salary employee below 40 years – Mandatory addition – Constitution Bench binding – Error of High Court.
Victim aged 37 years and on fixed monthly salary. In view of Constitution Bench decision in National Insurance Co. Ltd. v. Pranay Sethi (2017) 16 SCC 680, addition of 40% towards future prospects is mandatory. Grant of future prospects is not discretionary but structured by binding precedent under Article 141. High Court’s omission to add future prospects constituted manifest error of law. (Paras 17–20)
Loss of dependency – Re-computation – Application of multiplier method.
Monthly income ₹10,000 + 40% future prospects = ₹14,000. After deduction of 1/4th towards personal expenses, contribution assessed at ₹10,500 per month. Applying multiplier of 15 (age 37 years), loss of dependency computed at ₹18,90,000 (₹10,500 × 12 × 15). (Para 20)
Conventional heads – Loss of love and affection – Not a separate head – Harmonisation of Pranay Sethi, Magma General Insurance and Satinder Kaur.
Though Rajesh v. Rajbir Singh recognised “loss of love and affection” as a distinct head, Constitution Bench in Pranay Sethi confined compensation to loss of estate, loss of consortium and funeral expenses. Subsequent decisions in Magma General Insurance Co. Ltd. v. Nanu Ram and United India Insurance Co. Ltd. v. Satinder Kaur clarified that consortium is a compendious concept encompassing spousal, parental and filial consortium. Loss of love and affection stands subsumed within consortium and cannot be awarded separately. No separate award under that head permissible. (Paras 22–29)
Consortium – Scope – Spousal, parental and filial consortium – Award structured.
Consortium includes spousal consortium, parental consortium to children, and filial consortium to parents. In present case, ₹50,000 awarded as spousal consortium; ₹40,000 each to two minor children as parental consortium (₹80,000); and ₹40,000 as filial consortium to mother (father having died). (Paras 26, 30)
Interest – Enhancement – Long pendency.
Considering that accident occurred in 2011 and dependants were litigating for 15 years, interest enhanced to 9% per annum from date of claim petition till realisation. (Paras 32)
Result – Compensation enhanced.
Total compensation determined at ₹20,80,000 with interest @ 9% per annum from date of claim petition till realisation. Insurer directed to pay balance within twelve weeks. (Paras 30–33)
RATIO DECIDENDI
In a claim under Sections 166 and 168 of the Motor Vehicles Act, once the income of the deceased is established through unimpeached documentary evidence, courts cannot reduce it on conjecture. Where the deceased was below 40 years of age and on fixed salary, addition of 40% towards future prospects is mandatory in terms of the Constitution Bench decision in Pranay Sethi. Determination of loss of dependency must follow the structured multiplier method laid down in Sarla Verma and Pranay Sethi.
Compensation under conventional heads is confined to loss of estate, loss of consortium and funeral expenses. “Loss of love and affection” is not an independent head of compensation and stands subsumed within consortium, which includes spousal, parental and filial consortium, as clarified in Magma General Insurance and Satinder Kaur. (Paras 16–20, 22–29)
