Interest on motor accident compensation is payable on the entire award, including future prospects.

Facts

Rashmi Lekha Katakiya Das died in a 2011 road accident when the Scorpio in which she was travelling collided with a truck parked on National Highway 37 without parking lights.

Source reference: paras. 3–6; pp. 2–5

Her sons filed a claim under Section 166 of the Motor Vehicles Act, 1988. The Motor Accident Claims Tribunal, Goalpara awarded them ₹44,85,670 with interest at 6% per annum. The insurer appealed, challenging, among other matters, the addition of 15% towards future prospects and interest on that component

Source reference: paras. 3–6, 9–11; pp. 2–5

Issues

1. Whether the Tribunal erred in adding 15% of the deceased’s income towards future prospects, given that she was 51 years old

Source reference: paras. 11, 14, 17–19; pp. 5–8

2. Whether interest could be awarded on the compensation attributed to future prospects

Source reference: paras. 10, 13, 17, 20; pp. 5–8

3. Whether the Tribunal’s 6% interest rate should be enhanced

Source reference: paras. 12, 15, 21–22; pp. 5–9

Law Applied

Section 173 of the Motor Vehicles Act, 1988 provides for an appeal against an award of a Claims Tribunal; the underlying claim was brought under Section 166

Source reference: paras. 2, 5; pp. 2–3

Under National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, where a deceased was aged between 50 and 60 years, 15% is added to actual salary towards future prospects

Source reference: paras. 14, 18–19; pp. 6–8

In Oriental Insurance Co. Ltd. v. Neeru @ Niharika, judgment dated 14 July 2025 in SLP (C) No. 11340 of 2020, the Supreme Court held that interest is payable on the entire awarded compensation, including the amount attributed to future prospects

Source reference: paras. 13, 20; pp. 6, 8

The Court also considered whether the Tribunal’s interest rate adequately secured just compensation in the circumstances of the case

Source reference: para. 21; p. 9

Reasoning

The deceased was 51 years old, placing her within the 50–60 age bracket specified in Pranay Sethi; the Tribunal therefore correctly added 15% towards future prospects

Source reference: paras. 18–19; p. 8

The insurer’s objection to interest on that component was foreclosed by Neeru @ Niharika, which requires interest to apply to the entire award

Source reference: para. 20; p. 8

However, given the accident occurred in 2011 and the compensation remained unpaid by the time of judgment in 2026, the Court considered the Tribunal’s 6% rate too low and found 9% appropriate to ensure just compensation

Source reference: para. 21; p. 9

Holding

The appeal was dismissed.

The Court directed that the compensation awarded by the Tribunal carry interest at 9% per annum, instead of 6%, from the date of filing of the claim application; the records were directed to be returned to the Tribunal

Source reference: paras. 22–24; pp. 9–10