Lump Sum Award Preferred Over Open-Ended Replenishment Clauses for Future Attendant Compensation in Motor Claims

The Respondent No. 1 (claimant), aged over 55, suffered extensive injuries in a motor vehicle accident, leaving him 100% disabled and requiring 24/7 assistance.

The MACT, Rohini, awarded compensation including attendant charges at ₹5,000 per month.

On appeal, the High Court of Delhi modified the award, directing the insurer to deposit ₹10,00,000 in a lien-marked account to be replenished perpetually to cover future attendant charges at notified minimum wage rates for the claimant's lifetime.

The Insurance Company challenged this "open-ended" replenishment model before the Supreme Court, seeking a quantified lump-sum settlement.

The Court emphasized the principle of "real-time assessment" of compensation, asserting that insurance must cover an injured party in real terms rather than as a mere formality.

The Court held that motor accident compensation must be determined individually based on the specific facts and ground realities of each case, rendering precedents merely persuasive.

The Court found the High Court’s replenishment order "too vague to be implemented" and "based on probabilities," noting that it created uncertainty for both parties regarding the future existence of the insurer and the total liability.

Applying the law to the facts, the Court observed that the claimant’s condition (inability to handle basic functions or take decisions) necessitates at least two attendants daily.

Given the claimant’s age (55+) and the current economic cost of hiring help (estimated at minimum ₹10,000 per month per attendant), the Court rejected the MACT’s ₹5,000 estimate as insufficient.

To ensure the claimant lives with "some dignity," the Court determined that a lump-sum quantification was necessary to resolve the uncertainty created by the High Court's directions.

The Court ordered the Appellant to pay this amount within six weeks, adjusting for sums already paid, and directed that ₹45,00,000 be placed in a fixed deposit with an auto-renewal facility, allowing for a withdrawal of ₹5,00,000 for immediate expenses and subsequent withdrawals from the corpus not exceeding ₹2,00,000 at reasonable intervals.