In Motor Accident Claims, personal expense deduction for a bachelor must be 50% of assessed income.

The appellant Insurance Company challenged the judgment and award dated 27.01.2025 passed by the Motor Accident Claims Tribunal (Special), Rajkot in MACP No. 1001/2018.

The Tribunal had awarded Rs. 18,46,000/- with 9% interest to the parents of a 23-year-old bachelor deceased in a motor accident.

The Insurance Company did not challenge negligence or the base income of Rs. 8,500/- but contested the quantum, specifically the Tribunal's deduction of 1/3 for personal expenses instead of 1/2, given the deceased’s status as a bachelor.

Whether the learned Tribunal erred in deducting 1/3 instead of 1/2 of the income towards personal expenses for a deceased bachelor.

Whether the compensation awarded under conventional heads (loss of estate, consortium, and funeral expenses) required modification in accordance with prevailing legal precedents.

The Court applied the principles established in Sarla Verma v. Delhi Transport Corporation [(2009) 6 SC 3104] and Amrit Bhanu Shali v. National Insurance Co. Ltd. [(2012) 11 SCC 738], which mandate a 50% (1/2) deduction for personal expenses when the deceased is a bachelor.

For future prospects, it followed National Insurance Co. Ltd. v. Pranay Sethi [(2017) 16 SCC 680], allowing a 40% addition for a deceased aged below 40.

It further applied Pranay Sethi and Magma General Insurance Co. Ltd. v. Nanu Ram [(2018) 18 SCC 130] to standardize awards under conventional heads and parental consortium.

The Court found the Tribunal’s 1/3 deduction for personal expenses legally unsustainable because the deceased was a bachelor, necessitating a 1/2 deduction per Sarla Verma.

Starting with the undisputed income of Rs. 8,500/-, the Court added 40% for future prospects (Rs. 11,900/- total) and then deducted 50% for personal expenses, resulting in a monthly dependency of Rs. 5,950/-.

Using the multiplier of 18 (for age 23), the loss of dependency was recalculated to Rs. 12,85,200/-.

Additionally, the Court adjusted the conventional heads to align with current standards: Rs. 18,150/- each for loss of estate and funeral expenses, and Rs. 96,800/- for parental consortium (Rs. 48,400/- per parent).

The Court ordered the Insurance Company to deposit the revised amount with 9% interest from the date of the claim petition.

If the original amount had already been deposited, the Tribunal was directed to refund the excess (Rs. 4,27,700/-) to the Insurance Company and disburse the modified amount to the claimants.