Karnataka HC Raises Compensation For Widow And Sons Of Man Killed By Car To Rs 13.7 Lakh In Insurer’s Appeal

In brief

The question

Whether the Tribunal’s assessment of the deceased’s notional income at ₹12,000 per month should be modified, notwithstanding that the claimants had not appealed.

The court held

The appeal was disposed of and the Tribunal’s award modified: total compensation was increased to ₹13,70,044, with interest at 8% per annum from the date of the petition until realisation.

It also directed

The insurer was directed to deposit the enhanced compensation with interest within eight weeks; the remaining part of the Tribunal’s award was left undisturbed.

01Facts

The deceased, Sadananda Shetty, died after a car struck him while he was walking along the Karkala–Hebri State Highway on 21 March 2018. His wife and two children sought compensation under Section 166 of the Motor Vehicles Act, 1988.

pp. 3–7

The Tribunal assessed his notional monthly income at ₹12,000, applied 10% future prospects, deducted one-third for personal expenses and awarded ₹13,01,600 with interest at 8% per annum. The insurer appealed, challenging the income assessment and the interest rate; the claimants had not filed an appeal.

pp. 3–8

02Issues

i.Whether the Tribunal’s assessment of the deceased’s notional income at ₹12,000 per month should be modified, notwithstanding that the claimants had not appealed.

pp. 8–9

ii.Whether interest at 8% per annum was excessive and warranted reduction.

pp. 8, 10–12

03Law Applied

Under Section 166 of the Motor Vehicles Act, compensation for death is assessed by determining dependency loss, including appropriate future prospects, personal-expense deductions and multiplier, consistently with Sarla Verma and Others v. Delhi Transport Corporation and Another (2009) 6 SCC 121 and National Insurance Co. Ltd. v. Pranay Sethi (2017) 16 SCC 680.

pp. 9–10

The Court also relied on United India Insurance Co. Ltd. v. Sri Malyadri M. and the Division Bench decision in Smt. Divya V.M. v. Veerabhadrashetti K.C., which discussed the case-specific assessment of interest and the reasonableness of 9% interest in death and serious-injury cases.

pp. 7, 10–12

The Court stated that an appellate court may correct an apparent error in the award even where the claimants have not appealed.

p. 8

Provisions in the judgment · 2 · Linked ones open on LawLens

Motor Vehicles Act, 1988 Section 173 Section 166

04Reasoning

The Court found that the Tribunal had used a monthly notional income of ₹12,000, although the applicable figure for 2018 was ₹12,500.

p. 8

It therefore recalculated dependency using ₹12,500 monthly income, 10% future prospects, a one-third deduction for personal expenses, and a multiplier of 11, assessing loss of dependency at ₹12,10,044.

pp. 9–10

It also substituted consortium of ₹1,20,000 for the three dependants and adjusted the other conventional heads, bringing total compensation to ₹13,70,044.

p. 10

Although the cited decisions recognised that 9% interest may be appropriate, the Court found no ground to interfere with the Tribunal’s award of 8% interest.

pp. 10–12

05Holding

The appeal was disposed of and the Tribunal’s award modified: total compensation was increased to ₹13,70,044, with interest at 8% per annum from the date of the petition until realisation.

pp. 12–14

The insurer was directed to deposit the enhanced compensation with interest within eight weeks; the remaining part of the Tribunal’s award was left undisturbed.

pp. 12–14

LawLens.Karnataka High Court

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