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Synopsis

The Supreme Court recently increased the monthly income of a man for computing compensation under the Motor Vehicles Act, stating that with the father and mother also being claimants, besides the wife and young children, the deceased, an agriculturist would, but obviously, be presumed to have carried out the major responsibility, as is done in such a joint family. The court also noted that the businesses of an agriculturist, hiring or driving, and milk-vending are of a physical and strenuous nature, which cannot ordinarily be seriously undertaken for long periods by elder persons.

A bench of Justices Sudhanshu Dhulia and Ahsanuddin Amanullah said that bearing in mind the evidence in totality, it was clear that the deceased had a major role in the family businesses.

Going by the cumulative income from all three sources, it is difficult to accept that the income of the deceased was restricted to Rs 10,000 per month, as decided by the MACT, much less Rs 8,000 per month, as decided by the high court, the apex court held.

"Upon a conspectus of the material on record, especially apropos the deceased’s income with the MACT, it is clear that the fixation of monthly income ultimately as Rs 8,000 per month by the high court cannot be justified in any manner. At the same time, even the claim of the appellants of the income being Rs 40,000 per month is also not borne out," the bench said.

The court opined that it was reasonable assumed that the deceased had a monthly income of Rs 15,000 per month on an overall circumspection of the entire facts and circumstances of the case and the material on record.

Dealing with the appeal filed by Shivaleela and others, the court found that the compensation awarded by the Karnataka High Court under the other heads, being in conformity with the law laid down by the top court in the decisions in Smt. Sarla Verma vs Delhi Transport Corporation (2009) and National Insurance Company Ltd vs Pranay Sethi (2017), did not require any interference.

The bench cited K. Ramya vs National Insurance Co Ltd (2022) and Ningamma vs United India Insurance Co Ltd (2009), which stated 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 people’s lives in the future, it stressed.

Court modified the impugned order to the extent that the monthly income of the deceased would be taken as Rs 15,000 per month instead of Rs 8,000 per month. It also fixed the rate of interest at 7.5% per annum from the date of filing of the claim petition till realization, instead of 6% per annum.

The bench directed the insurance company to pay a total compensation of Rs 35,66,600 to the family of the deceased, K. H. M. Virupakshaiah, who met with an accident on May 5, 2012, unfortunately resulting in his death.

On the fateful date, the deceased was riding his Bajaj motorcycle along with a pillion rider near Itagi Village on the Harihar-Hospete road. When they reached near Talakallu Village Cross, they were hit by a Ford car, driven by respondent no. 2, in a rash and negligent manner at high speed.

The appellants filed a plea before the MACT, seeking compensation of Rs 77,15,000. The MACT, by judgment and order of January 10, 2014, awarded compensation of Rs 25,49,000 with 6% interest per annum from the date of filing of the claim petition till its realization.

The high court, by the impugned order, dismissed the appellants' appeal and partly allowed the plea of the respondent-insurance company. It reduced the compensation of Rs 25,49,000 to Rs 20,61,320. The appellants submitted that the deceased was aged about 32 years and had an old father, mother, wife, three minor daughters, and one minor son at the time of the accident. It was contended that the deceased owned 9 acres and 23 cents of irrigated land, on which various varieties of crops and fruits like banana, chiku, anjeer, and cotton were grown. The deceased was also engaged in milk-vending.

The appellants submitted that the sudden death of the deceased left the dependents without proper support, as he was the main force behind the family’s agriculture, milk-vending, and hiring/driving businesses. It was pointed out that the wife had to take care of the minor children and that the father was old. It was submitted that though it had come on record that there was another brother of the deceased, that could have only lessened the earning of the petitioner by one-third.

They said that initially, the MACT had taken the notional income as Rs 10,000 per month without looking into the documents produced by the bank manager, who admitted to advancing a loan of Rs 4,20,000 for agricultural purposes, and the deposition of the wholesale vendor, who used to buy the banana crops grown on the deceased’s field, along with a list of sales exhibited in the proceedings, showing that they varied from Rs 3,00,000 a year to almost more than Rs 5,00,000 in a period of only three months. Thus, it was submitted that the monthly income would be Rs 40,000, which had been drastically reduced by the MACT to Rs 10,000 without any justification.

The appellants further contended that the high court had caused further injustice by reducing the monthly income to Rs 8,000 without considering the relevant factors.

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 earnings by the high court. It was further submitted that the MACT had considered the evidence and that the high court had also taken note of it. It said that the high court had been more practical in assessing the income, which could not be faulted.

The apex court, however, assessed the monthly income as Rs 15,000 per month and enhanced the total compensation.

Case Title: Shivaleela And Others Vs The Divisional Manager, United India Insurance Co Ltd