Enhancement of compensation based on upward revision of notional income for a skilled deceased person.

On October 13, 2021, Raghubar Singh died in a motor accident when his motorcycle was struck by an offending Trailer (registration No. OR/14-R-3068) driven rashly by Respondent No. 1.

The deceased was 28 years old, a skilled mason, and survived by five dependents: his wife, two minor children (aged 1 year and 8 months), and his parents.

The Motor Accident Claims Tribunal (MACT), Surguja, awarded a total compensation of Rs. 15,69,400/- with 7% interest, assessing the deceased's monthly income at Rs. 7,000/-.

The Appellants (claimants) filed this appeal under Section 173 of the Motor Vehicles Act, 1988, seeking enhancement, contending that the income and non-pecuniary heads were erroneously undervalued.

1. Whether the monthly income assessed by the Tribunal was just and reasonable considering the nature of the deceased's work and the number of dependents.

2. Whether the compensation awarded under conventional heads (consortium, funeral expenses, etc.) required enhancement in line with Supreme Court precedents.

Section 173 of the Motor Vehicles Act, 1988.

Principles for calculating compensation established in Sarla Verma v. Delhi Transport Corporation (2009) regarding multipliers and deductions for personal expenses; National Insurance Co. Ltd. v. Pranay Sethi (2017) regarding the addition of 40% for future prospects for a deceased below 40 years; and Magma General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram (2018) regarding the entitlement of each dependent to parental, filial, and spousal consortium.

The Court found the Tribunal’s assessment of Rs. 7,000/- per month insufficient. Given the deceased's status as a skilled mason, the prevailing minimum wages, and the burden of supporting five dependents, the Court revised the monthly income to Rs. 11,000/-.

Applying the Pranay Sethi guidelines, the Court added 40% for future prospects, bringing the income to Rs. 1,84,800/- per annum. Following Sarla Verma, since there were 4-6 dependents, 1/4th of the income was deducted for personal expenses, and a multiplier of 17 was applied based on the deceased's age (28 years).

The Court further corrected the non-pecuniary damages by awarding Rs. 40,000/- each to the children and parents for loss of consortium, and Rs. 44,000/- to the wife for spousal consortium, alongside Rs. 33,000/- for funeral expenses and loss of estate.

The Court ordered an additional compensation of Rs. 10,23,800/- to be paid by the Respondent No. 3 (Insurance Company) with 6% interest per annum from the date of appeal (June 12, 2023). The Court issued specific directions for the disbursement and investment of the amount, including fixed deposits in nationalized banks for the minor children and the widow to ensure financial security.