Facts
On 04.10.2014, Ms. Santhamma (the deceased), a spinster and pensioner, was fatally struck by a scooter driven negligently by the first respondent
Source reference: p.3The Motor Accidents Claims Tribunal (MACT), Mavelikkara, awarded ₹6,89,400/-, treating all siblings as dependents and fixing notional income at ₹7,000/- while deducting only one-third for personal expenses
Source reference: p.4-5The insurance company appealed, contending that major siblings living separately are not "dependents" and that the deduction for a spinster should be one-half
Source reference: p.5Issues
1. Whether major siblings of a deceased individual are entitled to compensation under the head of "loss of dependency"
Source reference: p.4, para 52. Whether the Tribunal erred in fixing the notional income and the percentage of deduction for personal expenses for a deceased spinster/pensioner
Source reference: p.5, para 53. Whether the award of penal interest at 12% is legally sustainable
Source reference: p.10, para 13Law Applied
The court applied the principles of National Insurance Co. Ltd. v. Pranay Sethi [2017(4) KLT 662(SC)] regarding the addition of 10% future prospects and the mandatory 50% (one-half) deduction for personal expenses for spinsters/bachelors
Source reference: p.9-10It followed Sarla Verma v. Delhi Transport Corporation [2010(2) KLT 802(SC)] for the application of the multiplier "9" for the age group of 57 years
Source reference: p.10The Court applied National Insurance Co. Ltd. v. Keshav Bahadur [(2004) 2 SCC 370] to strike down the imposition of penal interest
Source reference: p.10-11Reasoning
The Court found that while four of the siblings were major, married, and living separately, the second claimant (a sister) was an unmarried spinster who resided with and was wholly supported by the deceased's pension
Source reference: p.8-9Regarding income, the Court rejected the Tribunal’s ₹7,000/- fixation, holding that the Treasury Passbook (Ext.A18) clearly proved a pension of ₹6,285/-, which must be the baseline
Source reference: p.7The Court also determined that the Tribunal lacked the authority to award a 12% penal interest rate for default, as such "interest on interest" or penal rates are not supported by precedent
Source reference: p.10-11Holding
The Court answered that only the non-married, residing sibling was entitled to dependency compensation
The appeal was allowed in part. The "loss of dependency" component (re-calculated at ₹3,73,329/-) is to be paid exclusively to the second claimant, while the remaining balance is to be shared among all claimants. The interest rate was maintained at 8%, but the 12% penal interest direction was set aside
Source reference: p.11Original Court PDF
THE NEW INDIA ASSURANCE COMPANY LIMITEDvsDEVAKI
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