While reiterating that the Constitution Bench has recognised the principle that there would be incremental enhancement in the case of even self-employed individuals in the unorganised sector, the Surpeme Court allowed the appeals of the claimants in a case of motor accident and awarded enhanced compensation.

The Apex Court was considering an appeal challenging the reduction in the amount of compensation awarded to the claimants

Relying upon the judgment in National Insurance Co. Ltd. v. Pranay Sethi (2017), the Division Bench of Justice Sudhanshu Dhulia and Justice K. Vinod Chandran further stated, “the Constitution Bench recognized the principle that there would be incremental enhancement in the case of even self-employed individuals in the unorganized sector and also proposed an increase in the income of such persons, as future prospects. Applying the said logic, we are of the opinion that even if the deceased was working in an unspecified job like a coolie considering the increase of cost of living and economic advancements over the years, it can be safely assumed that even a coolie would be eligible for incremental enhancement of wages of least ₹500/- per month in every subsequent year.”

Advocate C.B. Gururaj represented the Appellants while AOR Prerna Mehta represented the Respondent.

Factual Background

The Motor Accidents Claims Tribunal awarded an amount of Rs 23,15,000 for the death of the husband of the first claimant, who left behind him five dependents: his wife, two minor children, and both his parents. The liability was cast on the Insurance Company which had insured the vehicle, rejecting their contention that the driver of the vehicle, the first respondent in the claim petition, did not have an effective license, and the license produced was fake.

The Insurance Company filed an appeal against the liability cast on them, and the claimants sought enhancement of compensation, in two different appeals, in which cross objections were filed by the registered owner of the offending vehicle. The High Court disposing of the appeals and the cross objections reduced the compensation for loss of income to Rs 7,92,540. Aggrieved thereby, the claimants approached the Apex Court.

Reasoning

The Bench noted that the High Court proceeded to compute the income at Rs 3,700 as applicable to an unskilled worker, looking at the minimum wages fixed by the State of Punjab for such workers. “It is not clear as to from which document or notification such income was taken by the Tribunal”, it said.

On the issue of income for an unskilled labourer, the Bench placed reliance upon the judgment in Ramachandrappa v. Royal Sundaram Alliance Insurance Co. Ltd. wherein the notional income of a coolie was fixed at Rs 4,500 per month in the year 2004. Notign that the accident occured in the year 2010, 6 years from 2004 in which year this court had fixed ₹4,500 as income per month for a coolie, the Bench said, “Hence it can be safely presumed that a coolie in the year 2010 would have earned an income of ₹7,500.”

As per the Bench, the deceased, though, was asserted to be 23 years of age in the claim petition, the postmortem report showed his age as 30 years, and hence the multiplier taken at 17 was perfectly in order. The loss of dependency was computed at Rs 16,06,500. Thus, allowing the appeals, the Bench enhanced the compensation to Rs 18,36,500. However, the Bench found no reason to interfere with the order of the Tribunal and the High Court, wherein the liability to pay the compensation though cast on the Insurance Company, they were given the authority to recover the same from the owner of the vehicle.

Cause Title: Amarveer Kaur and Ors. v. Reliance General Insurance Company Limited and Ors (Neutral Citation: 2025 INSC 589)

Appearance:

Appellant: Advocate C.B. Gururaj, AOR Prakash Ranjan Nayak, Advocate Animesh Dubey, AOR Vikas Verma, Advocates Sapna Verma, Shafik Ahmed, Anamay Mishra, Kavita Verma, Aakriti Yunas, Divya Goyal, Vikas Verma, AOR Aditya Singh, Advocates Kamal Kishor, Anubhav Singh

Respondent: AOR Prerna Mehta, Advocate C.B.Gururaj, AOR Prakash Ranjan Nayak, Advocates Animesh Dubey, Savita Devi, Savita Devi, AOR Shashank Singh, Advocates Gaurav Gupta, Ankita Kashyap

Click here to read/download Judgment


Justice Sudhanshu DhuliaJustice K. Vinod Chandran

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.