While reiterating that the compensation under the Motor Vehicles Act is concerned with providing stability and continuity in peoples' lives, the Supreme Court has awarded enhanced compensation of over Rs 35 lakh in a motor accident case.

The appeals before the Apex Court were directed against the Judgment passed by the Karnataka High Court challenging the award passed by the Senior Civil Judge & Motor Accidents Claim Tribunal whereby the High Court partly allowed the appeal filed by the Insurance Company and reduced the compensation of Rs 25,49,000 to Rs 20,61,320.

The Division Bench comprising Justice Sudhanshu Dhulia and Justice Ahsanuddin Amanullah stated, “ In K Ramya v National Insurance Co. Ltd., 2022 SCC OnLine SC 1338, after taking note of, inter alia, Ningamma v United India Insurance Co. Ltd., (2009) 13 SCC 710, the Court held that the ‘… Motor Vehicles Act of 1988 is a beneficial and welfare legislation that seeks to provide compensation as per the contemporaneous position of an individual which is essentially forward-looking. Unlike tortious liability, which is chiefly concerned with making up for the past and reinstating a claimant to his original position, the compensation under the Act is concerned with providing stability and continuity in peoples’ lives in the future. …’”

Advocate Ashwin V. Kotemath represented the Appellants while Advocate Sunder Lal Gupta represented the Respondent.

Arguments

It was the case of the appellant that the deceased was aged about 32 years and half an had an old father, mother, wife, three minor daughters and one minor son at the time of the accident and an income of Rs 40,000 per month. The family of the deceased owned irrigated land on which various varieties of crops and fruits were being cultivated from which a yearly income of Rs 6 lakh was raised and the saving was Rs 3 lakhs per year. It was submitted that the sudden death of the deceased left the dependants without proper support as he was the main force behind the family’s agriculture, milk-vending and hiring/driving businesses.

The Respondent-Insurance Company submitted that the deceased was one of the two sons of the loan holder and thus the income had to be divided among the three, as such Rs.8,000 per month was a reasonable and correct assessment of the deceased’s earning by the High Court.

Reasoning

The Bench was of the view that both the MACT as also the High Court had not correctly approached the issue. There was evidence before the MACT with regard to the loan being advanced of Rs.4,20,000 and that of PW6, who purchased the banana crops from the deceased, stating that the latest transaction amounted to more than Rs.5 lakh within a few months and the same could not be controverted by the respondent-Insurance Company. There was a tractor in the name of the family and also evidence of PW3 to the effect that the deceased used to supply milk. The same was also reflected in the passbook of the Milk Producer’s Cooperative Society showing payments being made to the mother of the deceased of Rs.6,000 per month. As per the Bench, given such aspects, the MACT and the High Court erred in assessing the income on the lower side.

Noting that the deceased had a major role in the businesses, the Bench said, “The fact that the father and the mother of the deceased were also claimants before the MACT and the mother having passed away during the interregnum itself shows that they were advanced in age and thus, the deceased, but obviously, would be presumed to have carried out the major responsibility as is done in such joint family, especially since the businesses of agriculturist, hiring/driving and milk-vending are of a physical and strenuous nature, which cannot be seriously undertaken ordinarily for long periods of time by elder persons.”

The Bench thus held that it could be assumed that the deceased had a monthly income of Rs.15,000 per month instead of Rs.8,000 fixed by the High Court.

Thus, partly allowing the appeal, the Bench awarded enhanced compensation of Rs 35,66,600.

Cause Title: Shivaleela Vs The Divisional Manager (Neutral Citation:2025 INSC 35)

Appearance:

Appellant: Advocates Ashwin V. Kotemath, M.R. Hiremathad, AOR Harisha S.R.

Respondent: Advocate Sunder Lal Gupta, AOR Sanjeev Kumar, Advocates Asutosh Sharma, Rajesh Ranjan Prasad, Gunjan Sharma, Mohit Kumar Gupta, Sanjeev Kumar Aggarwal, Rajani Shahi, Bhagwan Jee Thakur, Subhash Ghosh

Click here to read/download Judgment









Supreme CourtJustice Sudhanshu DhuliaJustice Ahsanuddin Amaah

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.