“Amount Wholly Inadequate”: Supreme Court Enhances Compensation For Family Of Engineering Student Who Died In 2000 Road Accident
The Court held that the High Court had erred in denying prospects merely because the income of the deceased engineering student had been assessed notionally.
Justice S.V.N. Bhatti, Justice Vijay Bishnoi, Supreme Court
The Supreme Court has enhanced compensation awarded to the family of a 22-year-old mechanical engineering student who died in a road accident in 2000, holding that the compensation awarded by the High Court was still “on the lower side”.
The Court observed that the deceased was a meritorious engineering student with considerable academic promise and substantial prospects and that his notional income could not be equated with that of an unskilled worker.
The Court was hearing an appeal filed by the claimant seeking enhancement of compensation awarded in a motor accident claim arising out of the death of a third-year mechanical engineering student who succumbed to injuries sustained after a truck hit his motorcycle.
A Bench of Justice S.V.N. Bhatti and Justice Vijay Bishnoi observed: “While it is exceptionally difficult to quantify the potential of a young student, this amount seems wholly inadequate for the deceased, who was a bright Engineering student with promising prospects”.
Advocates Nitish Kant Sharma, Vijay Kaundal, Rajat Mittal, Subham Kumar and Priyanshu appeared for the petitioner, while Advocate Satyendra Kumar appeared for the respondent-insurance company.
Background
The accident occurred when the deceased, a 22-year-old third-year B.E. Mechanical Engineering student, was travelling on a motorcycle with his classmate towards college. According to the claim petition, a truck being driven rashly and negligently hit the motorcycle, causing severe injuries to the deceased, who later succumbed to the injuries during treatment.
The claimant, who was the mother of the deceased, filed a claim petition seeking compensation. Before the Tribunal, it was contended that the deceased was a bright engineering student pursuing his degree from G.L.A. Institute of Technology and Management and had also completed a diploma course in Plastic Mould Technology from the Central Institute of Plastic Engineering and Technology, Chennai. The claimant further relied on an AutoCAD certificate and claimed that the deceased was earning ₹4,000/- per month by imparting computer training.
The Tribunal, however, found no sufficient evidence to prove the alleged income from computer training and assessed the income of the deceased at ₹3,000/- per month. Applying a multiplier of 11, it awarded total compensation of ₹2,23,000/-.
In appeal, the Punjab and Haryana High Court enhanced the notional income to ₹6,000/- per month and applied a multiplier of 18, thereby enhancing the compensation to ₹13,44,000/-. However, the High Court declined to grant of prospects on the ground that the income assessed was notional.
Aggrieved thereby, the claimant approached the Supreme Court seeking further enhancement.
Court’s Observation
The Supreme Court observed that the objective of compensation under motor accident law is to ensure “just and reasonable compensation” to the dependents of the deceased and to provide meaningful succour for the pain, suffering and loss caused by death in a motor accident.
The Court noted that the Tribunal had assessed the income of the deceased at ₹3,000/- per month, which was enhanced to ₹6,000/- per month by the High Court. However, the Court held that such an assessment remained inadequate considering the deceased’s educational qualifications and prospects.
The Court referred to Navjot Singh v. Harpreet Singh (2020), wherein the Supreme Court had held that the notional income of an engineering student cannot be equated to the minimum wages payable to an unskilled worker.
The Court also relied upon Arvind Kumar Mishra v. New India Assurance Co. Ltd. (2010), where the Supreme Court recognised that an engineering graduate from a reputed institution would ordinarily have substantial future earning prospects even in the absence of concrete proof regarding employment.
After examining the educational qualifications of the deceased, the Court observed that apart from being a third-year mechanical engineering student, the deceased had completed a diploma course in Plastic Engineering and also possessed certification in AutoCAD. The Court held that although there was no cogent evidence regarding earnings from computer training, the academic record and qualifications of the deceased clearly established substantial prospects.
The Bench remarked: "While there is no cogent evidence on record to substantiate the claim that the deceased was earning ₹4,000/- per month by imparting computer training, there can be little dispute as to the fact that he was a meritorious student with considerable academic promise and substantial future prospects. Having regard to the aforesaid, we deem it appropriate to assess the monthly income of the deceased at ₹12,000/-, considering that the death occurred in the year 2000".
The Court further held that the High Court had wrongly denied prospects merely because the income had been assessed notionally. Referring to Sarla Verma v. Delhi Transport Corporation (2009) and National Insurance Co. Ltd. v. Pranay Sethi (2017), the Court observed: “This approach is contrary to the well-settled principles enunciated in Sarla Verma (supra), and affirmed in Pranay Sethi (supra).”
The Court accordingly added 40% future prospects to the assessed income and applied a deduction towards personal expenses as the deceased was unmarried. Applying the multiplier of 18, the Court computed the loss of dependency at ₹18,14,400/-.
The Court also found the compensation awarded under conventional heads to be inadequate. Relying upon Pranay Sethi (2017) and Magma General Insurance Co. Ltd. v. Nanu Ram (2018), the Court awarded ₹15,000/- towards loss of estate, ₹40,000/- towards filial consortium and ₹30,000/- towards funeral expenses.
The Court further held that both the Tribunal and the High Court erred in assessing compensation towards damage to the motorcycle at ₹18,000/- and accepted the surveyor’s assessment of ₹25,670/-.
Conclusion
The Supreme Court enhanced the total compensation payable to the claimant from ₹13,44,000/- to ₹19,25,070/-. The Court held that the claimant would be entitled to interest at the rate of 7.5% per annum from the date of filing of the claim petition till realization of the enhanced compensation.
The Court further directed that the respondents shall jointly and severally pay the enhanced compensation within eight weeks.
Cause Title: Mohinder Kaur (D) Through L.R. v. Brij Lal Arora & Ors. (Neutral Citation: 2026 INSC 477)