Claimants need not file a cross-appeal: Allahabad High Court enhances motor accident compensation to ensure “just compensation” despite insurer’s appeal

On 16 November 2017, Sabhajeet Tadmali was struck by Scorpio vehicle No. UP32EK7689 while walking near Bariyawan crossing, Ambedkar Nagar. He sustained serious injuries and died during treatment.

His legal representatives filed M.A.C.P. No. 21 of 2018 claiming ₹49,70,000, asserting that the deceased was aged about 50 years and was engaged as a licensed seller/extractor of ‘tadi’.

The owner and driver did not appear and were proceeded against ex parte.

The Motor Accident Claims Tribunal held that the accident occurred due to the rash and negligent driving of the vehicle, that the driver possessed a valid licence, and that the vehicle was insured with the appellant.

It awarded ₹7,20,000 with interest at 7% per annum.

The Insurance Company appealed under Section 173 of the Motor Vehicles Act, 1988, challenging the award, particularly on liability and quantum.

During the appeal, the claimants orally sought enhancement on the grounds that the income and conventional compensation had been assessed inadequately.

1. Whether the Insurance Company could avoid liability on the ground that the vehicle had allegedly been stolen and was not in the possession or control of the registered owner or charge-sheeted driver at the time of the accident.

2. Whether the discrepancy between the driver’s name in the police record and the driving-licence record affected the finding regarding the validity or identity of the driver.

3. Whether the deceased’s age, for determining the multiplier, was to be treated as falling within the 46–50 age bracket or the 51–55 age bracket.

4. Whether the compensation awarded by the Tribunal constituted “just compensation” under the Motor Vehicles Act, 1988.

5. Whether the High Court could enhance compensation in an appeal filed by the Insurance Company, despite the claimants not filing a separate appeal or cross-objection seeking enhancement.

Section 168 of the Motor Vehicles Act, 1988 requires the Claims Tribunal—and, in appeal, the High Court—to determine and award compensation that is just, fair and reasonable.

Section 169 permits the Tribunal to follow a summary procedure and exercise powers akin to those of a civil court, while Section 173 provides for an appeal against the award.

Order XLI Rule 33 CPC confers wide discretionary powers on an appellate court to pass any decree or order necessary to do complete justice, even in favour of a respondent who has not filed an appeal or cross-objection.

Applying Sarla Verma v. DTC, the multiplier is determined by the deceased’s completed age; the multiplier is 13 for ages 46–50 and 11 for ages 51–55.

The Court relied on Shashikala v. Gangalakshmamma and subsequent decisions to hold that completed age should be considered and, where the exact age is uncertain, the lower completed age may be adopted.

Under Pranay Sethi, future prospects and conventional amounts are to be awarded according to settled principles, with a 10% increase in conventional heads every three years.

Magma General Insurance Co. Ltd. v. Nanu Ram and New India Assurance Co. Ltd. v. Somwati establish entitlement to separate spousal and parental consortium and that loss of love and affection is not a separate head.

The Court further relied on Chandra v. Mukesh Kumar Yadav for assessing notional income with minimum wages as a relevant yardstick, though not an absolute rule.

The Court further relied on Surekha v. Santosh, Ranjana Prakash v. Divisional Manager, and relevant Allahabad High Court decisions regarding enhancement of “just compensation” in an insurer’s appeal.

The Court rejected the Insurance Company’s theft argument because no FIR, complaint by the owner, or cogent evidence established that the vehicle had been stolen before the accident.

The difference between “Mohd. Imran” in the police record and “Imran Khan” in the driving licence was treated as immaterial, particularly because the licence verification material connected the licence with the same person; the omission of the common prefix “Mohd.” did not establish a different driver.

Regarding age, the family register showed the year of birth as 1967, while the Aadhaar card was not treated as conclusive proof of date of birth. Since the deceased was above 50 but below 51 years on the accident date, the Court adopted 50 years as his completed age and retained the multiplier of 13.

On quantum, the Court found the Tribunal’s monthly income of ₹5,000 inadequate. Considering the deceased’s work as an authorised ‘tadi’ extractor and the applicable minimum wage notification, it fixed the monthly income at ₹7,400.46.

It applied 25% future prospects, deducted one-third towards personal expenses, and calculated the loss of dependency using multiplier 13.

The Court also held that, because the Insurance Company had placed the quantum of compensation before the appellate court, the absence of a claimant’s cross-appeal did not prevent the High Court from correcting an inadequate award in order to comply with Section 168 and the principle of just compensation.

Exercising its appellate powers, the Court enhanced the compensation from ₹7,20,000 to ₹11,43,565, comprising ₹9,62,065 towards loss of dependency, ₹18,150 towards funeral expenses, ₹18,150 towards loss of estate, and ₹48,400 each towards spousal consortium for the wife and parental consortium for each of the two children.

Interest remained payable at 7% per annum, with adjustment of any amount already paid.

The award dated 9 January 2024 was modified accordingly, and the appeal was disposed of.