Legal Heirs Can Pursue Motor Accident Compensation Despite Victim’s Death from Unrelated Causes: SC

Dealing with a civil appeal filed by Dhannalal Alias Dhanraj (Dead) through legal representatives, court rejected a preliminary objection raised by the insurance company regarding the maintainability of the plea for enhancement of compensation to the victim, who had sustained injuries in a motor accident but subsequently died during the pendency of the proceedings. Maintaining that the answer was simple and clear, the bench held that the inserted provision was squarely applicable in the case at hand.

The insurance company had objected to the continuation of the appeal and its consideration by virtue of the substitution of the deceased claimant by his legal representatives. The insurer contended that since the claim was for compensation for personal injury, the continuation of the proceedings could not be permitted by the legal representatives, relying on Section 306 of the Indian Succession Act, 1925, and as interpreted by a full bench of the Madhya Pradesh High Court in Bhagwati Bai and Anr. v. Bablu and Mukund and Ors (2007), which was followed by a Single Judge of the Allahabad High Court in Saroj Sharma v. State of U.P (2014).

Having noted that the injured died in 2024, which was after the insertion of the amendment to Section 166, the bench said, "We also have a difference of opinion with the declaration of law in Bhagwati Bai which we need not dilate upon in the facts of this case where the inserted provision is squarely applicable''.

The claimant, employed as a 'mistry' in a shop, suffered 100 per cent disability. The tribunal had initially granted Rs 18,52,000 with 9% interest, determining the injured’s monthly income at Rs 8,000 as against the claim of Rs 10,000. However, upon remand on appeal, the tribunal subsequently reduced the monthly income to Rs 4,000.

"Considering the fact that the injured was engaged as a skilled worker, we are of the opinion that Rs 9,000 can be safely accepted as his monthly income at the time of the accident, which he was deprived of fully because of the 100% disability,'' the bench observed.

The bench noted that the tribunal and the High Court had adopted the multiplier of 14 for the 45-year-old claimant, which was in accordance with the judgment of a Constitution Bench of the apex court in National Insurance Company Ltd. v. Pranay Sethi and Others (2017).

"It is trite that what is awarded to an injured in a claim petition is just compensation and as held by this court it cannot lead to a windfall for the injured claimant or his legal heirs,'' the bench said.

Court pointed out that the fact remains that the injured lived only for 11 years. Probably, his life span had been reduced by the injuries that rendered him 100% disabled, ultimately resulting in his demise.

"The multiplier is applied on the assessment of the normal life span where an injured or deceased in a motor accident would have worked and earned to support himself and his family,'' the bench said.

The bench held that when the consideration in the present appeal was with respect to the loss occasioned to the estate of the injured, the injured having died, the multiplier adopted of 14 could not be applied, which would have to be reduced to 11, the actual life span. The victim, despite not being engaged in regular employment, was still entitled to 25% for future prospects, especially since his functional disability was 100%, rendering him totally disabled from carrying on any work or generating any income, the court added.

Court finally determined the total compensation as Rs 20,37,095 with interest at the rate of 9 per cent from the date of the filing of the claim petition till the payment.

Case Title: Dhannalal Alias Dhanraj (Dead) Thr LRs Vs Nasir Khan and Ors.

Judgment Date: September 26, 2025,

Bench: Justices K Vinod Chandran and N V Anjaria