Motor accident compensation must reflect applicable minimum wages, future prospects, and consortium for all eligible claimants.

On 11 January 2020, Somabhai Bababhai Rathod was travelling as a passenger in an autorickshaw when another autorickshaw, allegedly driven rashly and negligently on the wrong side of the road, collided with it. Somabhai sustained grievous injuries and died as a result.

His wife, daughter and mother filed a claim petition before the Motor Accident Claims Tribunal, Kheda at Kapadwanj.

The Tribunal partly allowed the claim and awarded ₹12,41,864 with interest at 7.5% per annum from the date of filing until realization.

The claimants appealed, challenging the quantum of compensation.

The insurer opposed enhancement, contending that the deceased’s income was unproved and that the Tribunal’s “pay and recover” direction had attained finality.

1. Whether the Tribunal correctly assessed the deceased’s monthly income for determining loss of dependency, or whether the applicable minimum wages ought to have been applied.

2. Whether the claimants were entitled to an addition towards future prospects and to enhanced compensation under the heads of loss of estate, funeral expenses and loss of consortium.

3. Whether the “pay and recover” direction and the exclusion of interest for the 531-day delay in filing the appeal were required to be maintained.

The Court applied the principles governing computation of motor accident compensation under the Motor Vehicles Act, including assessment of notional income by reference to prevailing minimum wages where actual income is not proved, addition of future prospects, deduction for personal expenses, and application of the multiplier appropriate to the deceased’s age.

Relying on National Insurance Co. Ltd. v. Pranay Sethi, 2017 (16) SCC 680, the Court applied a 40% addition for future prospects for a deceased aged about 35 years and enhanced the conventional sums for funeral expenses and loss of estate.

Relying on Magma General Insurance Co. Ltd. v. Nanu Ram alias Chuhru Ram & Ors., (2018) 18 SCC 130, it awarded consortium to the wife, daughter and mother.

Since the Tribunal’s “pay and recover” direction was not challenged, it was treated as final and maintained.

Interest was denied on the enhanced amount for the 531-day delay pursuant to the order condoning delay.

The Court found that the deceased’s asserted income of ₹500 per day was not established by cogent evidence.

However, the Tribunal’s assessment of ₹6,500 per month was below the minimum wages applicable to a skilled worker in Gujarat at the time of the accident.

The Court therefore reassessed the monthly income at ₹8,720.

It added 40% for future prospects, producing a monthly income of ₹12,208; deducted one-third towards personal expenses because the deceased left three legal representatives; and applied a multiplier of 16 applicable to his age, arriving at a future loss of dependency of ₹15,62,688.

Applying Pranay Sethi, it enhanced funeral expenses and loss of estate to ₹18,150 each.

Applying Magma General Insurance, it awarded consortium to all three claimants at ₹48,400 each, totalling ₹1,45,200 as stated in the body of the judgment.

The tabular calculation, however, records consortium as ₹1,45,800 and the total compensation as ₹17,44,188; the Court consequently computed the enhancement as ₹5,02,324.

The existing pay-and-recover mechanism was preserved, and interest on the enhanced amount was allowed subject to exclusion of the 531-day appellate delay.

The Court directed payment of additional compensation of ₹5,02,324 over and above the original award of ₹12,41,864, with interest at 7.5% per annum from the date of filing of the claim petition, excluding interest for the 531-day delay in filing the appeal.

The insurers were directed to deposit the additional amount with interest within six weeks; they were required to satisfy the award initially, with liberty to recover it in accordance with the Tribunal’s existing directions.

The Tribunal was directed to disburse the amount after verification and deduction of any deficit court fee.

No order as to costs was made.