Fatal accident compensation must reflect minimum-wage income, future prospects, and separate consortium for each claimant.

On 3 January 2017, Rambati Nag was travelling in Jeep No. CG-17/C-3701, driven and owned by respondent Pavan Kumar Nag, after attending an engagement ceremony. While returning, the jeep overturned on the public road between Gopawada and Gudra due to rash and negligent driving. Rambati sustained grievous injuries and subsequently died during treatment.

Her husband and three minor children filed a claim petition under Section 166 of the Motor Vehicles Act, 1988, claiming ₹17,68,000 as compensation. The Motor Accident Claims Tribunal, South Bastar, Dantewara, awarded ₹4,87,000 by its award dated 27 February 2019 in Claim Case No. 31/2018.

The claimants appealed under Section 173 of the Motor Vehicles Act, seeking enhancement. They contended that the deceased’s monthly income ought to have been assessed at ₹9,000, that future prospects had been omitted, and that the amounts awarded under conventional heads were inadequate.

The insurer defended the Tribunal’s assessment of monthly income at ₹3,000 for want of documentary proof.

The Court applied Sections 166 and 173 of the Motor Vehicles Act, 1988, governing claims for compensation arising from motor accidents and appeals against awards of the Claims Tribunal.

For computation of compensation, it relied on Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121, concerning deduction for personal expenses and selection of the multiplier; National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, concerning addition of future prospects and conventional heads; and Magma General Insurance Co. Ltd. v. Nanu Ram, (2018) 18 SCC 130, recognising separate entitlement to parental or spousal consortium for eligible claimants.

In the absence of documentary proof of income, the Court assessed income on the basis of the applicable Chhattisgarh minimum wages for an unskilled labourer.

The Court also applied the principle of “pay and recover” in view of the finding of breach of policy terms in connected cases arising from the same accident.

The Court found that the Tribunal’s assessment of ₹3,000 per month was inadequate in light of inflation and prevailing market conditions. Treating the deceased as an unskilled labourer, it fixed her monthly income at ₹6,206, resulting in an annual income of ₹74,472.

Since the deceased was aged 35 years, the Court added 40% towards future prospects, deducted one-fourth towards personal expenses because there were four dependants, and applied a multiplier of 16. The resulting loss of dependency was ₹12,51,136.

The Court further awarded ₹15,000 for loss of estate, ₹15,000 for funeral expenses, and ₹1,60,000 towards consortium at ₹40,000 for each of the four claimants, holding the Tribunal’s award of ₹10,000 for consortium and ₹30,000 jointly for loss of love and affection to be inadequate.

Although the Tribunal had not found a breach of policy, the insurer relied on the High Court’s decision in connected appeals arising from the same accident, where breach had been found and the pay-and-recover principle applied. As the claimants and the driver-owner did not oppose that request, the Court directed similar treatment in the present matter.

The appellants were held entitled to an additional ₹9,54,136, carrying interest at 6% per annum from the date of filing of the claim application until realization.

The insurer was directed to satisfy the award in accordance with the pay-and-recover principle, with liberty to recover the amount from the driver-owner, and the remaining terms of the Tribunal’s award were left undisturbed.