Chhattisgarh HC Raises Cyclist’s Family’s Compensation To ₹18.76 Lakh, Directs Insurer To Pay First With Right To Recover From Owner-Driver

Sampat Lal died in a collision between his bicycle and a motorcycle on 19 October 2023. His wife and two sons claimed compensation, alleging that he earned ₹15,000–₹20,000 per month from masonry and agricultural work.

The Motor Accident Claims Tribunal assessed his monthly income at ₹7,410, awarded ₹13,94,880 with interest, and exonerated the insurer for breach of the driving-licence condition. The claimants appealed under Section 173 of the Motor Vehicles Act, 1988, seeking enhanced compensation and a pay-and-recover direction against the insurer.

Section 173 of the Motor Vehicles Act, 1988 provides for an appeal against an award of the Claims Tribunal.

In assessing compensation for a fatal motor accident, the Court relied on National Insurance Co. Ltd. v. Pranay Sethi, Sarla Verma v. Delhi Transport Corporation and Magma General Insurance Co. Ltd. v. Nanu Ram, applying the principles governing future prospects, personal-expense deductions, multiplier selection and conventional heads.

The Court also relied on Rama Bai v. Amit Minerals in directing the insurer to pay the compensation in the first instance, with liberty to recover it from the owner and driver where the policy condition concerning the driving licence had been breached.

The claimants produced no cogent evidence establishing the asserted masonry and agricultural income. Given the accident date, the Court considered it appropriate to assess income at the Chhattisgarh minimum wage for unskilled labour—₹10,100 per month.

It upheld the Tribunal’s application of 40% future prospects, a one-third deduction for personal expenses and a multiplier of 15, but revised the conventional-head awards, including consortium, loss of estate and funeral expenses.

Although the Tribunal had found a driving-licence policy breach, the Court applied the pay-and-recover approach and placed the initial payment obligation on the insurer.

The insurer was directed to pay the compensation in the first instance, with liberty to recover it from the owner and driver in accordance with law; the remaining terms of the Tribunal’s award were left undisturbed.