Court may modify motor accident compensation based on a mutually accepted settlement proposal.

The insurer appealed under Section 173 of the Motor Vehicles Act, 1988, against the judgment dated 25 June 2025 of the 1st Motor Accident Claims Tribunal, Kandhamal, Phulbani, in M.A.C. Case No.28 of 2024, which awarded Rs.90,00,117 to Respondent Nos.1 to 4 and directed the insurer to pay the amount.

The insurer principally challenged the quantum of compensation, contending that only one-fourth, rather than one-third, of the deceased’s income should be deducted towards personal and living expenses because the married daughter could not be treated as a legal dependent.

The Court noted that the insurer had not led evidence supporting a reduction in compensation.

During the hearing, the Court proposed compensation of Rs.83,00,000 with interest at 6% per annum; the claimants accepted the proposal, while the insurer left the matter to the Court’s discretion.

Whether the compensation awarded by the Tribunal should be reduced by applying a one-fourth deduction towards the deceased’s personal and living expenses, instead of a one-third deduction, on the ground that the married daughter was not a dependent.

Whether, in the circumstances of the case and with the parties’ positions regarding the Court’s proposal, the compensation should be modified to Rs.83,00,000 with interest at 6% per annum.

The appeal was governed by Section 173 of the Motor Vehicles Act, 1988, which permits an appeal against an award of a Motor Accident Claims Tribunal.

The Court relied on Taslim Parvin & Another v. Smt. Usha Devi & Another, 2018 (2) TAC 22 (SC), for the principle that, where the claimants accept a compensation proposal and the insurer does not dispute it but leaves the matter to the Court’s discretion, the Court may dispose of the appeal on that agreed or non-opposed basis in the interests of justice.

The Court also considered the evidentiary principle that a party seeking reduction of compensation must substantiate the relevant contention, noting the insurer’s failure to lead evidence on the proposed reduction.

Although the insurer challenged the deduction for personal and living expenses on the basis that the married daughter was not a dependent, it had not adduced evidence to establish grounds for reducing the award.

Rather than determine the dependency dispute afresh, the Court negotiated and proposed a modified compensation of Rs.83,00,000 with 6% annual interest. The claimants expressly accepted the proposal, and the insurer did not oppose it, leaving the matter to the Court’s discretion.

Applying the principle in Taslim Parvin, the Court held that the interests of justice would be served by modifying the award to the proposed amount.

The insurer was directed to pay the modified compensation within eight weeks.

Upon deposit, the amount was to be disbursed proportionately to the claimants in accordance with the Tribunal’s award; the statutory deposit and accrued interest were directed to be refunded to the insurer after deposit of the modified compensation.

The pending interlocutory application was disposed of, and court fee was directed to be realized from the claimant in accordance with law.