Contributory negligence in motor accident claims must be deducted as a determined percentage, not a lump sum.

On 26 October 2020, Yashwant Kurre was returning from Bemetara in his Bolero vehicle when it collided with the offending vehicle bearing registration No. CG-08-L-2333, allegedly parked negligently on the main road near Atariya turn. He sustained grievous injuries and died during treatment.

His wife, two daughters, minor son and mother filed a claim petition under the Motor Vehicles Act, 1988, claiming ₹1 crore and asserting that the deceased, aged approximately 44 years, was engaged in business, agriculture, transport and related activities and earned about ₹1,30,000 per month.

The Claims Tribunal assessed his annual income at ₹5,00,000, applied a multiplier of 13, deducted one-fourth towards personal expenses, and assessed the total compensation at ₹62,00,000. It deducted ₹22,00,000 on account of the deceased’s contributory negligence and awarded ₹40,00,000 with interest at 6% per annum.

The claimants appealed under Section 173 of the Motor Vehicles Act seeking enhancement, principally challenging the lump-sum deduction for contributory negligence, the denial of proper future prospects, the multiplier, and the amounts under conventional heads.

Whether the compensation required enhancement by granting the appropriate addition towards future prospects and applying the correct multiplier for a deceased aged 44 years?

Whether the Tribunal erred in deducting a lump-sum amount of ₹22,00,000 towards contributory negligence instead of applying the relevant percentage?

Whether the amounts awarded under the conventional heads, including loss of estate, funeral expenses and consortium, required enhancement?

The Court exercised appellate jurisdiction under Section 173 of the Motor Vehicles Act, 1988.

For computation of loss of dependency, it applied National Insurance Co. Ltd. v. Pranay Sethi, which requires addition of future prospects and prescribes the appropriate multiplier based on the deceased’s age; for a deceased aged between 41 and 45 years, the applicable multiplier is 14.

It also relied on Sarla Verma v. Delhi Transport Corporation, governing deductions for personal and living expenses, and applied a one-fourth deduction where there are five dependants.

Magma General Insurance Co. Ltd. v. Nanu Ram was applied in relation to consortium payable to the spouse, children and other eligible claimants.

The Court accepted the previously determined contributory-negligence percentage of 35.48%, calculated from the Tribunal’s deduction of ₹22,00,000 from ₹62,00,000, as concluded in the coordinate Bench’s decision in MAC No. 105 of 2023.

The Court upheld the Tribunal’s assessment of the deceased’s annual income at ₹5,00,000, considering the income-tax return and the evidence that he was a businessman.

Since the deceased was 44 years old and self-employed/business-oriented, the Court added 25% towards future prospects, increasing the annual income to ₹6,25,000. After deducting one-fourth, or ₹1,56,250, towards personal expenses, the annual dependency was computed at ₹4,68,750. Applying the correct multiplier of 14 under Pranay Sethi, the loss of dependency came to ₹65,62,500.

The Court did not reassess contributory negligence because the coordinate Bench had already determined the applicable percentage in the insurer’s appeal. It therefore treated the Tribunal’s lump-sum deduction of ₹22,00,000 as representing 35.48% contributory negligence and applied that percentage to the revised compensation.

The Court further enhanced the conventional amounts to ₹16,500 for loss of estate, ₹16,500 for funeral expenses and ₹2,20,000 towards consortium for five claimants at ₹44,000 each.

The resulting compensation was ₹68,15,500 before deduction of contributory negligence and ₹43,97,361 thereafter.

The High Court enhanced the total compensation from ₹40,00,000 to ₹43,97,361, after applying 25% future prospects, the multiplier of 14, the one-fourth deduction for personal expenses, enhanced conventional heads and a 35.48% deduction for contributory negligence.

The claimants were accordingly granted an additional ₹3,97,361, carrying interest at 6% per annum from the date of filing of the claim application until realization.

The remaining terms of the Tribunal’s award were maintained, and the Registry was directed to communicate the enhanced amount to the claimants in Hindi, with assistance from paralegal workers where necessary.