Supreme Court Enhances Compensation in Motor Accident claim:

The bench of Justices Indu Malhotra and Sanjiv Khanna in Sunita Tokas & Anr. Versus New India Insurance Co. Ltd & Anr reiterated that age of deceased is material in deciding enhancement of compensation granted by Motor Accident Claims Tribunal, Patiala House Courts, New Delhi.

The son of the Appellants viz. Pradeep Tokas 21 years was a student who was a trained swimmer, and had won prizes in State level events. On 11.05.2004, he met accident with truck while sitting on a two wheeler. The truck was standing in the middle of the road without any indicator lights on. The two-wheeler dashed against the stationary truck, and both Pradeep Tokas and the driver died on the spot.

The Appellants filed the Claim petition before the MACT, Patiala House Courts, New Delhi claiming compensation on the death of their son. The MACT vide Award dated 25.05.2009 granted compensation of Rs. 14,87,140 along with interest @ 7% p.a. to the Appellant Claimants. The aggrieved by the aforesaid Award Appellants filed before the Delhi High Court for enhancement of compensation. The respondent- insurance company also filed a cross – appeal for reduction of compensation. The High Court reduced the amount of compensation awarded by the MACT to Rs. 9.25.000.

Aggrieved by the aforesaid judgment, the Appellant – claimants filed the present Civil Appeal for enhancement of the compensation awarded. Court relied on Amrit Bhanu Shali & Ors. V. National Insurance Co wherein the apex court had held that the selection of multiplier is based on the age of the deceased, and not on the basis of the age of dependents. There may be a number of dependents of the deceased,

LINK – K INSURANCE BROKER CO. (PVT). LTD

whose ages would vary. Therefore, the age of the dependents would have no nexus with the computation of compensation. In the present case, since the deceased was 21 years old, the Multiplier of 18 was applicable as per the table set out in the Sarala Verma case.

Court said the High Court has erred in reducing the notional income of the deceased from Rs. 16,246/- as awarded by the MACT to Rs. 7,500. The court held that the deceased was a trained swimmer who had won several State level competitions. His mother runs a Swimming / Gym Centre at Air Force Stations (Central School), Gurgaon. Therefore, the deceased certainly had the potential to earn a living by utilizing his skills.

Age of Deceased, not age of dependent, Material in computing insurance claim: SC

The Supreme Court has reiterated the insurance claim principle whereby the computation of claim amount is supposed to be done based on age of the deceased and not age of the dependents claiming the insurance.

A breach of justices Indu Malhotra and Sanjiv Khanna was hearing Joginder Singh c ICICI Lombard arising out of Himachal Pradesh High Court ruling in an insurance claim that the courts below failed to award compensation towards Future Prospects and Loss of Estate. Court accordingly granted compensation under these additional heads.

In a recent 2019 judgment in Royal Sundaram Alliance insurance Co. Ltd V Mandala “Yadagari Goud & Ors, the apex court has settled that the Multiplier has to be applied on the basis on the age of the deceased. Court quoted itself from Royal Sundaram. We are convinced that there is no need to once again take up this issue settled by the aforesaid judgements of three Judge Bench and also relying upon the Constitution Bench that it is the age of the deceased which has to be taken into account and not the age of the dependents. The erroneous multiplier of 11 to calculate claim amount was thus modified to a Multiplier of 18.

Court also held the “lump sum amount of Rs. 25,000 towards loss of love and affection as inaccurate computation since in 2017, the apex court in Magma General Insurance Co.Ltd V Nanu Ram & Ors had held that a sum of Rs. 40,000 is to be paid to each of the parent towards loss of consortium on the death of a child. The gross sum of the insurance amount thus stands enhanced by the Supreme Court.