For a 15-year-old deceased, compensation requires 40% future prospects and a multiplier of 15.

On 24 June 2016, Dilipbhai Nagjibhai, aged approximately 15 years, was travelling as a pillion rider on a motorcycle driven by his paternal uncle.

The motorcycle collided with a school bus owned by respondent No. 3-Trust and insured with the appellant-insurer, resulting in the deceased’s death at the spot.

His parents instituted a claim petition before the Motor Accident Claims Tribunal, Banaskantha at Palanpur, seeking compensation of ₹11,20,000.

The Tribunal partly allowed the claim and awarded ₹7,43,000 with interest at 9% per annum from the date of application, along with proportionate costs.

The insurer preferred the present appeal, challenging only the quantum of compensation.

It contended that the Tribunal had wrongly applied a 50% addition towards future prospects and a multiplier of 18.

1. Whether the Tribunal erred in adding 50% towards future prospects while computing the deceased’s loss of dependency, and whether the addition ought to have been 40%?

2. Whether the Tribunal applied an incorrect multiplier of 18, and whether the appropriate multiplier was 15 in the circumstances of the fatal accident claim?

3. Whether the total compensation awarded by the Tribunal required reduction and recomputation under the applicable principles governing motor accident compensation?

The Court applied the principle of “just compensation” under the Motor Vehicles Act, requiring the compensation to be reassessed where the Tribunal’s computation is legally unsustainable.

Relying on National Insurance Co. Ltd. v. Pranay Sethi, AIR 2017 SC 5157, the Court held that 40% of the established income was to be added towards future prospects and that the claimants were entitled to conventional sums for funeral expenses and loss of estate.

The Court applied a deduction of one-half of the income towards the deceased’s personal expenses and adopted a multiplier of 15.

Relying on Magma General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram & Ors., (2018) 18 SCC 130, it awarded consortium to the deceased’s parents at ₹48,400 each, totalling ₹96,800.

The Court found that the deceased’s monthly income of ₹4,000, as assessed by the Tribunal, was not under challenge.

Applying the principles in Pranay Sethi, it added 40% towards future prospects, resulting in a monthly prospective income of ₹5,600.

After deducting one-half towards personal expenses, the monthly contribution to the claimants was calculated at ₹2,800.

Applying the multiplier of 15, the loss of dependency was fixed at ₹5,04,000.

The Court further awarded ₹18,150 each for funeral expenses and loss of estate, and ₹96,800 towards parental consortium under Magma General Insurance.

The total compensation was therefore recalculated at ₹6,37,100, as against the Tribunal’s award of ₹7,43,000.

The Court reduced the compensation by ₹1,05,900 and modified the award to ₹6,37,100, with interest at the rate already granted by the Tribunal.

The impugned judgment and award was modified accordingly, with no order as to costs; the Records and Proceedings were directed to be returned to the Tribunal.