Supreme Court: No Straight Jacket Formula For Adopting Income In Case Of Children Involved In Motor Vehicle Accidents

The Supreme Court has held that there is no straight jacket formula as to the income to be adopted in the case of children when they suffer injuries or succumb to death, in a motor vehicle accident, for computing compensation.

The Court was considering an appeal wherein the Parents were aggrieved by the judgment of the Madurai Bench of the Madras High Court whereby it reduced the compensation awarded for the death of their son in a motor accident.

The Bench of Justice K. Vinod Chandran and Justice N.V. Anjaria observed, "There is no straight jacket formula as to the income to be adopted in the case of children when they suffer injuries or succumb to death, in a motor vehicle accident. In fact, the Tribunal had considered a Division Bench decision which adopted the income of Rs.5,000/- per month for a 9-year old. The High Court does not give any reasoning to deviate from the said monthly income adopted by a Division Bench and merely adopts the income as per Schedule II....."

The Appellant was represented by Advocate-on-Record M.P. Parthiban while the Respondent was represented by Additional Advocate General Balaji Subramaniam.

Facts of the Case

A 10-year old boy, while cycling to School, was hit by a bus of the Respondent-Corporation. The Appeal was only on the quantum and there was no dispute raised by the Corporation as to the negligence found on their driver. The Tribunal awarded an amount of ₹8,55,000/- reckoning the income of the child at ₹5,000/- per month and determining the compensation for loss of dependency adopting the multiplier of 18 and deducting 2/3rd for personal expenses. An amount of ₹1,00,000/- was granted for the loss of love and affection along with funeral expenses of ₹25,000 and ₹5,000/- each for transportation and loss of dress, ornaments and cycle. The High Court reduced the income by ₹2,70,000/-, finding that ₹30,000/- per year as per the Schedule II of the Motor Vehicles Act, 1981 was to be adopted as the income and the multiplier applicable is only 15, considering the age of the mother. While the amount for loss of love and affection was confirmed, funeral expenses was reduced to ₹15,000/- and the amounts granted for transportation and damage to clothes and cycle were deleted. A further amount of ₹15,000/- was granted as loss of estate, thus reducing the total award amounts to ₹5,80,000/-.

Reasoning By Court

The Court observed that there is no straight jacket formula as to the income to be adopted in the case of children when they suffer injuries or succumb to death, in a motor vehicle accident.

Noting that in the present case, a claim under Section 166 of the Motor Vehicles Act, 19881 was preferred and there was negligence found on the driver of the offending vehicle, the Court opined that the monthly income of ₹5,000/- as adopted for the child by the Tribunal is perfectly in order.

"There is no question of any deduction for personal expenses and hence even if the multiplier adopted is 15, considering the mother’s age of 36, the total compensation for loss of dependency would be Rs.7,50,000/-, Rs.30,000 more than that awarded by the Tribunal", the Court observed.

Insofar as the loss of love and affection was concerned, the Court cited its Constitution Bench ruling in Pranay Sethi which permits only ₹40,000/- each and agreed that funeral expenses as rightly reduced by the High Court has to be ₹15,000/.

"We find no rationale for the High Court to have deleted the transportation expenses and loss of dress, ornaments and cycle. As rightly awarded by the High Court, loss of estate has to be compensated with Rs.15000/-. Hence, even if just compensation of Rs.80,000 is fixed as loss of filial consortium as applicable to both the parents and the funeral expenses is reduced to Rs.15,000/-, the total compensation would be Rs.8,70,000/-", the Court observed.

It restored the order of the Tribunal, noting that there is no Appeal by Claimants on quantum. The Court thus directed that the Claimants be paid the amounts as awarded by the Tribunal after deducting the amounts already paid or deposited, within a period of one month.

The Appeal was accordingly disposed of.

Cause Title: Thangavel & Ors. vs. The Managing Director, Tamil Nadu State Transport Corporation Limited

Appearances:

Appellant- Advocate-on-Record M.P. Parthiban, Advocate Priyaranjani Nagamuthu, Advocate Ankur Prakash, Advocate Priyanka Singh, Advocate Bilal Mansoor, Advocate Shreyas Kaushal, Advocate S. Geyolin Selvam, Advocate Alagiri K, Advocate Shivansh Sharma

Respondent- Additional Advocate General Balaji Subramaniam, Advocate-on-Record G. Indira, Advocate Gandeepan, Advocate Amrita Kumari, Advocate Anjali Singh, Advocate Raniba Pangnila, Advocate Akash Kundu

Click here to read/ download Order