Motor accident compensation must account for future prospects and consortium payable to each dependent.

On 17 September 2020, deceased Rajendra Thakor was walking near Mahuda–Khatrej Chowkdi Road, opposite Neelkanth Honda Motors, when Tempo No. GJ-27-TT-2079, allegedly driven at excessive speed and negligently, struck him from behind. He sustained serious injuries, was taken to hospital, and died during treatment.

His legal representatives filed Motor Accident Claim Petition No. 229 of 2021 before the Motor Accident Claims Tribunal, Nadiad, claiming ₹20,00,000 as compensation. The Tribunal awarded ₹15,19,400 with interest at 7.5% per annum from the date of the claim petition until realization.

Aggrieved by the allegedly inadequate compensation, the claimants preferred the present appeal under Section 173 of the Motor Vehicles Act, 1988.

Whether the Tribunal had correctly assessed the deceased’s income, future prospects, dependency loss, and other heads of compensation under the principles of just and fair compensation?

Whether the claimants were entitled to enhancement of compensation by applying the principles laid down in National Insurance Co. Ltd. v. Pranay Sethi and United India Insurance Co. Ltd. v. Satinder Kaur @ Satwinder Kaur?

What enhanced compensation and consequential directions should be granted to the claimants?

The Court applied Section 173 of the Motor Vehicles Act, 1988, governing appeals against awards of Motor Accident Claims Tribunals.

It reiterated that the Motor Vehicles Act is a beneficial legislation and that compensation must be “just,” fair, reasonable, equitable, and based on a realistic and holistic assessment of the loss suffered.

Relying on National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, the Court applied the principles concerning future prospects and conventional heads of compensation, including loss of estate and funeral expenses.

It further relied on United India Insurance Co. Ltd. v. Satinder Kaur @ Satwinder Kaur, (2021) 11 SCC 780, for awarding consortium to each eligible dependent.

The multiplier method and deduction towards the deceased’s personal expenses were applied in computing the loss of dependency.

The Court found that the Tribunal had not properly assessed the deceased’s monthly income and accordingly recalculated the loss of dependency.

Taking the monthly income at ₹9,087, adding 40% towards future prospects, deducting one-fourth towards personal expenses, and applying a multiplier of 16, it assessed the future dependency loss at ₹18,31,968.

It also revised the amounts under consortium, funeral expenses, and loss of estate in accordance with the applicable Supreme Court precedents and the principle of just compensation.

On this basis, the Court determined the total compensation at ₹20,41,468 and deducted the ₹15,19,400 already awarded by the Tribunal, resulting in an enhancement of ₹5,22,068.

The total compensation payable to the claimants was enhanced to ₹20,41,468, carrying interest at 7.5% per annum from the date of filing of the claim petition until realization.

Since the Tribunal had already awarded ₹15,19,400, the Insurance Company was directed to deposit the enhanced amount of ₹5,22,068 before the concerned Tribunal within eight weeks of receiving the order.

The Tribunal was directed to disburse the entire awarded amount, including accrued interest and amounts held in deposit, after verification and compliance with the applicable procedure, subject to deduction of court fees, if payable.