Compensation under Section 163A must strictly follow the Second Schedule's structured formula without additional general damages.

On July 5, 2011, Rajnish (deceased), a paid driver for respondent Rajesh Kumar, died after his car rolled down a valley due to a mechanical defect.

The deceased’s wife and daughters (claimants) filed a petition under Section 163A of the Motor Vehicles Act, 1988, seeking compensation.

Although the petition was filed under the special "no-fault liability" provisions of Section 163A, the Motor Accidents Claims Tribunal-II, Shimla, awarded Rs. 7,58,600/- by applying principles governing Section 166 (fault-based liability).

The Insurance Company appealed against the award’s legal basis, while the claimants appealed for enhancement.

The Court applied Section 163A of the Motor Vehicles Act, 1988, which provides for compensation on a structured formula basis as per Schedule-II.

The court held that precedents like National Insurance Co. Ltd. v. Pranay Sethi and Sarla Verma v. DTC, which mandate "future prospects" and higher "conventional heads" under Section 166, do not apply to Section 163A claims.

Specific limits under Schedule-II (pre-amendment) were applied: 1/3rd deduction for personal expenses, and fixed caps for funeral expenses (Rs. 2,000), loss of consortium (Rs. 5,000), and loss of estate (Rs. 2,500).

The High Court reasoned that Section 163A is a distinct, beneficial scheme with no room for judicial expansion beyond the structured formula.

It found that the Tribunal incorrectly treated the matter as a Section 166 petition by awarding higher amounts for loss of consortium and funeral expenses inconsistent with Schedule-II.

The Court recalculated the dependency: using the deceased’s monthly income of Rs. 3,300, it deducted 1/3rd for personal expenses (Rs. 2,200/month) and applied a multiplier of 17 based on the deceased's age (31 years), totaling Rs. 4,48,800.

The court further restricted general damages to the statutory caps of Rs. 9,500 total, rejecting the Tribunal’s award of Rs. 1,25,000 for these heads as unsustainable.

The total compensation was reduced from Rs. 7,58,600 to Rs. 4,58,300 (comprising Rs. 4,48,800 for dependency and Rs. 9,500 for conventional heads) at 7.5% interest per annum with the Insurance Company's appeal partly allowed and the claimants' appeal dismissed.