Determination Of Compensation Under Different Heads Crucial While Computing Award For Motor Accidents: SC [Read Judgment]

The Supreme Court in Sandhya Rani Debbarma & Ors. Vs. The National Insurance Company Ltd. & Anr, has observed that determining the compensation under different heads such as loss of estate, funeral expenses, loss of consortium etc. is crucial while computing award of compensation due to dependants of the deceased in motor accidents.

In the instant case, the husband of the appellant Sadhya Rani died in an accident in Baramur in 2003, following which she filed a suit before the Agartala Motor Accident Claims Tribunal seeking a compensation of Rs 33.45 lakh.

The Tribunal in 2005, by way of judgment, said Rs 32,52,700 be given to the deceased’s family.

The National Insurance Company challenged the Tribunal verdict in Gauhati High Court, which modified the award and reduced it to Rs 20.40 lakh in 2006.

An apex court Bench comprising Justice V Gopala Gowda and Justice Adarsh Kumar Goel said it disagreed with the view adopted by the Gauhati High Court, which had modified the Tribunal award to Rs 20.40 lakh, which is only the annual loss of dependency.

The High Court, while reducing the amount of compensation, had observed as follows: "For the reasons and discussions aforementioned, this writ petition has merit and the same is allowed modifying the award to Rs 20,40,000/- only. As this amount would fetch perpetually more than Rs 10,000/- per month by way of interest @ 6% per annum without consuming the principal sum during the period of dependency, no further award on any other count is called for……”

Observing that the High Court ignored settled principles in awarding compensation, the apex court Bench said: “What is more shocking is the logic applied by the High Court in modifying the award to Rs 20, 40,000/-, which is only the annual loss of dependency, thereby, completely missing the next crucial step in determining the award of compensation due to the dependants of the deceased under the other different heads such as loss of estate, funeral expenses, loss of consortium etc. It is difficult for this court to understand what is the legal principle on which the learned single judge has relied on to arrive at the conclusion that no further award under any other head is called for, when the same has been the well settled position of law by this court.”

Referring to the three-judge Bench decision in the case of Rajesh & Ors. vs. Rajbir & Ors. and Kalpanaraj & Ors. vs. Tamil Nadu State Transport Corporation and Municipal Corporation of Delhi, Delhi vs. Uphaar Tragedy Victims’ Association & Ors, the court held that Rs 27,51,120 is payable by the insurance company to the claimant at the rate of 9 per cent per annum.

Read the Judgment here.