SC Restores Tribunal Award in Motor Accident Case, Says Income Reduction Unjustified

The Supreme Court has disapproved the reduction of a deceased person’s salary in a motor accident compensation case and reaffirmed that children and parents of the deceased are also entitled to compensation under the head of loss of consortium.

A bench of Justices Sudhanshu Dhulia and K Vinod Chandran reinstated the award passed by the Motor Accident Claims Tribunal (MACT), which had granted a total compensation of ₹23,07,000 to the dependents of the deceased. The Tribunal had accepted the claimed monthly salary of ₹10,000, deducted one-third towards personal expenses, and added 40% of the income as future prospects, of which three-fourths was considered for the dependents.

The appellants, Hansa Devi, her three minor children, and the deceased’s parents were the legal heirs of a truck driver who died on May 8, 2014, after being hit by another truck while attempting to re-board his own vehicle. An FIR was registered, and the claimants approached the Tribunal seeking compensation for the death of the 28-year-old breadwinner.

The Tribunal had awarded ₹40,000 to the wife for loss of consortium, ₹25,000 each to the children, and ₹10,000 each to the parents under the same head. Additionally, ₹15,000 each was granted under funeral expenses and loss of estate.

However, the Insurance Company challenged the award before the High Court, which significantly reduced the compensation. The High Court recalculated the deceased’s income at ₹5,434 per month based on minimum wages and deducted one-third for personal expenses, applying a 40% increase for future prospects.

The final award was slashed to ₹12,34,105, and only ₹40,000 was granted for loss of consortium as a whole.

Setting aside the High Court’s order, the Supreme Court observed, “We find no reason to accede to the reduction of income as done by the High Court.” Citing Ramachandrappa v. Royal Sundaram Alliance Insurance Co. Ltd. (2011), the Court noted that even a coolie was held entitled to ₹4,500 per month in 2004.

Factoring in an annual increment of ₹500, it held that an unskilled labourer in 2014 would earn close to ₹10,000. Accordingly, it said, “The claim made before the Tribunal with respect to the driver of heavy vehicle getting ₹10,000 as wages per month must be necessarily accepted.”

On the issue of loss of consortium, the Court cited its judgment in New India Assurance Co. Ltd. v. Somwati and Ors (2020) to reiterate that “even the children and the parents are entitled to compensation for loss of consortium.”

While noting that no appeal had been filed by the claimants for enhancement, the Court held that the Tribunal’s award under this head must be maintained. It restored the original compensation of ₹23,07,000 along with applicable interest, directing that the amounts be disbursed within two months and equally apportioned among the wife, children, and parents of the deceased.

The bench added that if any of the minor children are yet to attain majority, “the amount shall be kept in a fixed deposit, the interest of which can be disbursed to the mother who is the guardian.”

Case Title: Hansa Devi & Ors Vs SBI General Insurance Company Limited & Anr.